About Emerging Giants in Asia Pacific
A digital revolution is driving growth across Asia Pacific, transforming the way we live, work and do business. It is little surprise that this region is blazing the digital trail for the rest of the world:
- Demographically — Asia Pacific has a growing population, a growing workforce and a growing consumer class
- Digitally — It is home to a fast-growing population of digital natives
- Dynamically — A combination of better access to the internet, growing prosperity and improved education has created a new class of digital entrepreneurs who are uniquely positioned to identify and fill gaps in the regional market.
Asia Pacific has long been the engine of global prosperity driven by its network of industrial supply chains, but two shifts are now changing its growth-profile dramatically. First, Asian economies are becoming markets in their own right as their incomes rise. The second is that the ability to deliver products digitally has shifted the principal driver of regional growth from manufacturing to services.
The KPMG-HSBC Emerging Giants in Asia Pacific joint report takes an in-depth look at new economy businesses across the region that we believe will make a lasting impact on the global business landscape over the next decade. By analyzing economic and investment indicators in twelve key Asia Pacific markets and interviews with leading start-up founders and executives, we identify exemplary business models for future growth; as well as the conditions that will enable these markets to continue to thrive in today's constantly changing business environment.
Vietnam – One of Asia’s newest and most dynamic start-up scenes
Home to just 1,600 start-ups at the start of the COVID-19 pandemic, that total has jumped to more than 3,000 now – including the country’s four unicorns, according to start-up data platform Trancxn.
Driving the country’s digital economy is a large, young population willing to test and adopt new technology consumer services, supportive government policies, and a surge in overseas funding.
With such demand from the local market and support from the stakeholders, Vietnam’s tech entrepreneurship is thriving.
Local government’s focus on growth
The Vietnamese Government provides some support for new economy firms through its National Technology Innovation Fund, and as far back as 2017, it set up a FinTech Steering Committee to formulate and submit an annual action plan to the State Bank of Vietnam on the Building of a supportive ecosystem. Moreover, aside from ensuring that the country’s telecom infrastructure remains held by state-owned companies, and local firms (most of them private) control data services, the Government has largely allowed Vietnamese start-ups a free hand to chart their own path.
Vietnamese consumers are internet savvy and technologically adaptive. That means all Vietnamese companies now need to have a digital strategy to stay relevant. By year-end, Vietnam has two more unicorns. Strong funding is coming from Asia, especially Singapore, followed by South Korea, China, Hong Kong, and Japan. Nearly all of this money has gone to companies addressing the domestic market, local demand should stay strong for the next two or three years before there’s any need for consolidation, or for global or regional strategies.
Nguyen Trung Kien
Former Head of Private Enterprise (2022)
KPMG in Vietnam
Asia Pacific new economy businesses: Six key trends
Tap on the cards to read more...
Region-wide growth of
While China remains the leading ecosystem in Asia Pacific for new economy start-ups, India is catching up as a source of digital innovation, and Southeast Asia is establishing itself as a key market.
B2C now; B2B soon
B2C companies, such as e-commerce and payments, are attracting the majority of investment in emerging markets, but more attention is shifting to B2B in areas such as enterprise productivity, education, healthcare and clean-tech.
A rising middle class and digital-savvy Gen Z consumers are driving digital economies across the region; with aging populations spurring innovation in markets like Japan.
Localized business models
The region’s distinctive societies, economies and regulatory environments are all contributing to the rise of “hyperlocal” business models in Asia Pacific.
Robotics and automation are transforming factories, allowing companies in Asia Pacific to improve efficiency, traceability and transparency across their supply chains.
ESG on the rise
Increasing adoption of carbon emissions tracking, alternative and renewable energy and green finance solutions will create new opportunities for start-ups.
Despite all the recent factors that have impacted the global economy, Asia Pacific remains a growth-oriented region. Here are some key takeaways from our study of these new economy businesses.
- Seizing opportunities: The scale of the digital transformation now underway — and the availability of funding supporting that transformation — is expected to continue to support the growth of technology start-up ecosystems.
- Characteristics of Emerging Giants: While there is no specific formula to be an “Emerging Giant”, the companies we identified were standout players in a wide variety of disciplines, including one or more of the following — superior technology and/or technical knowledge, hyper localization, mastery of logistics, successful adaption of business models and a culture that attracts and retains talent.
- Partnerships and working with regulators: Collaboration is a win-win, with start-ups gaining access to market exposure and customers while corporates obtain innovative technology solutions that can help improve their business operations or access new markets.
- Tax and ESG considerations: As today’s Emerging Giants aspire to become tomorrow’s unicorns, formulating effective ESG and tax strategies will be a cornerstone for future growth.
- Support to scale up: Governments continue to be supportive of new economy expansion, with a wide range of measures and schemes to attract founders, investors, and talent.
- Daring to think big: It always starts with a seed of an idea, followed by thinking big, being disruptive and executing with full passion.