SEA VCs are laggards, Singapore truly a startup hub: Google-Temasek report: Page 2 of 2

 
The hurdles
 

 
Beyond just the lack of funding, the South-East Asian startup ecosystem faces a slew of other challenges, according to the e-conomy SEA 2016 report.
 
One of them is the lack of talent, not just in terms of developers but also when it comes to management. A lot of startups are actually hiring people from China or the United States to fill C-level roles.
 
The payment infrastructure is another, with a majority of the region’s population being unbanked, or having no access to banking services.
 
“Payment is pretty important because 60-70% of the population in Indonesia, the Philippines and Vietnam is unbanked,” said Rohit.
 
“The only way to do e-commerce [in these countries] is with cash-on-delivery, which is highly inefficient and costly.
 
“You need players like AliPay to develop out here, outside the banking system, to bridge the gap,” he added.
 
The Internet infrastructure is also a key challenge, with South-East Asian countries recording slower Internet speeds than the global average.
 
“Outside of Singapore, every country in the region is immensely slower than the global average of 23Mbps,” said Rohit.
 
“Indonesia is at one-third of the global average, and the Philippines is even slower than that – in fact, it is slower than Pakistan and Myanmar in terms of Internet speeds.
 
“Clearly something needs to be done out there,” he added.
 
Then there is logistics infrastructure, not helped by the fact that some South-East Asian countries are archipelagos.
 
“Particularly in markets like Indonesia which is spread across thousands of islands, logistics is a particular challenge,” said Rohit.
 
“The logistics cost in Indonesia is one of the highest in Asia, and that needs to be addressed,” he added.
 
Finally, another big challenge is consumer trust, or the lack of it.
 
“Countries like Indonesia, Malaysia and the Philippines have some of the highest rates of online fraud in the world, and that does not engender consumer confidence in conducting online transactions,” said Rohit.
 
But while there are a number of challenges, the “pot of gold … is pretty big and we all need to get together and address this opportunity,” he added.
 
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