Southeast Asia bags big bucks Bezos . . .
Amazon founder and aspiring astronaut Jeff Bezos has taken his first step into Southeast Asia’s booming digital economy. Indonesia-based wholesale e-commerce platform Ula secured C$109 million in Series B funding from major venture capital firms on October 2. Bezos Expeditions, the firm managing the billionaire’s personal investments, also participated in the funding round, injecting an undisclosed amount into the Jakarta startup. Ula assists small, often family-run shops, in digitizing their supply chain and inventory management. Bezos Expedition’s plunge into the Southeast Asian digital economy is indeed timely, as it has experienced accelerated growth despite pandemic headwinds. Southeast Asia is the world’s 5th largest economy and home to approximately 24 (and growing) tech unicorns (privately held companies valued over US$1 billion). It is estimated that the region’s digital economy will be worth US$300 billion by 2025.
Leapfrogging into the digital future . . .
Newly founded by Singapore-based unicorn Grab, the Tech for Good Institute (TFGI), in collaboration with global consultancy Bain & Company (Bain), examined the growth and potential of the ‘platform economy’ in Singapore, Indonesia, Malaysia, Vietnam, Thailand, and the Philippines. TFGI and Bain specifically looked at Online-to-Offline (O2O) platforms, those digital services that facilitate transactions with both online and offline components, like an e-marketplace where online purchases are physically delivered to the consumer. TGFI and Bain’s recently published report estimates that more than 77 per cent of users aged over 14 in the six economies used at least one O2O platform. Also, one in five MSMEs is on at least one O2O platform. Eighty-five per cent of MSMEs on O2O platforms in the targeted countries tapped into new customer bases, and 50 per cent experienced revenue increases.
With great growth comes potential policy . . .
As witnessed in Southeast Asia, the digital economy and its innumerable platforms are rewriting the trade of goods and services, bringing new policy and regulatory challenges to boost trade and innovation while protecting consumers. The Digital Economy Partnership Agreement (DEPA), launched in 2020 by Singapore, Chile, and New Zealand, tackles emerging digital economy issues beyond those addressed in traditional trade agreements like the CPTPP. DEPA establishes and fosters common rules on digital trade, co-operation and interoperability between digital systems across borders. DEPA’s real value is fostering policy dialogue and cross-border co-operation in emerging areas like artificial intelligence and financial technology products. Recognizing its potential, South Korea began the process to join DEPA this week, and several economies have expressed an interest in doing the same. In February, Canada started exploratory discussions with DEPA partners for possible accession to the agreement.