Monday, August 1, 2016
Thailand - Thailand's poised for technology growth but will start-ups come?
Golden sandy beaches. Great food. Martial arts. Technology?
Thailand hosted its largest ever tech conference over the weekend, a nod to the country's growing pool of entrepreneurs.
The Techsauce Summit was the first of its kind held over the weekend in Bangkok, drawing an estimated 3,000 people, including representatives from companies large and small, as well as venture capitalists. The major themes centered around financial technology, or fintech, and the country's buoyant e-commerce market.
"There is a very influential crowd here, a lot of amazing local leaders, and a lot internationally focused companies with global reach that can help connect the dots between Thailand, Southeast Asia and the globe," Ben King, country head of Google Thailand, told CNBC following his presentation entitled, "The Digital Opportunity in Thailand and Southeast Asia."
The conference was organized by Hubba, a co-working community in Thailand and Digital Ventures, a newly launched subsidiary of Siam Commercial Bank, one of Thailand's largest banks. In April, Digital Ventures said it plans to invest and support the nation's start-ups, with a particular interest in fintech.
"Four years ago, no one knew what a start-up was in Thailand and now here we have this major tech conference," Charle Charoenphan, co-founder of Techsauce.
"The government needs a new toy for economic growth and thinks start-ups might be the answer," he added.
Southeast Asia is the fastest growing internet region in the world, with nearly four million new internet users being added every month, according to a research report by Temasek and Google issued in May.
By 2025, its internet economy is expected to be a $200 billion opportunity, according to the report.
The large majority of start-ups are based in Singapore though, with the city-state housing nearly 80 percent of the start-ups in the region, according to some experts.
But entrepreneurs in Thailand are hoping to change that.
For one, Thailand's larger population makes it appealing. Thailand's nearly 70 million residents are far in excess of the population in Singapore, which has fewer than six million residents. Where Singapore has an edge is the ease of entry for foreign investment and high purchasing power.
Charoenphan, however, says Thailand should be of interest particularly to bootstrapped start-ups, given its relatively low cost of living. "With the money a start-up raises in Silicon Valley, a start-up that can normally stay there for six months, can stay here for three years," he predicted. "They extend their run rate by six to ten times just by moving."
Start-ups can even multiply their run rate several times by taking the two-hour flight from Singapore to Bangkok and shifting operations, he noted.
"When other people come, they realize we have a good start-up scene here," Charoenphan said. "They become really interested in actually investing or launching a start-up here."
Charoenphan thinks Thailand's biggest growth opportunities are in healthcare, travel and agriculture. Still, 40 percent of its population works in agriculture-related jobs. Other challenges persist as well.
The main hurdle for outsiders is the need to localize products, which is ultimately helping fuel homegrown start-ups, while prompting foreign companies to take on new views of their existing offerings.
"I think localization should come together to really drive the ecosystems," Google's King said. "We make sure when people get online, they have a great experience and we're making sure we're heavily localized in all of our products."
He notes a particular trend taking place among e-commerce operators in Thailand, where people are buying through chat apps, where consumers bargain directly with a seller, a term often referred to as "conversational commerce".