Vietnam (RedFOX Labs) — Southeast Asia’s Internet economy is on pace to reach $300 billion by 2025. Google’s 2019 ‘e-Conomy SEA’ report forecasts a 200% increase over the region’s $100 billion in online spending this year.
Residents of the SEA’s ‘Big Six’ countries — Indonesia, Malaysia, the Phillippines, Singapore, Thailand, and Vietnam — show no signs of curbing their appetite for mobile purchases.
Smartphones are Southeast Asian residents’ primary choice for accessing the Internet, with over 90% of the population using a phone as their sole connection method. In addition, ownership of multiple SIM cards floated the region’s mobile connectivity rate to an average of 133% in 2017.
Many factors are driving SEA’s staggering year-over-year growth. The population is young and continues to elevate its economic status. Mix-in declining prices for mobile Internet — with a healthy upswing in trusting digital payment options’ legitimacy — and the area is poised to hit its 2025 estimates.
Moreover, investments continue to flow into the region. According to Google’s report, the last four years alone saw SEA’s Internet-powered organizations attract over $37 billion in funding. The lion’s share of those funds went to unicorn companies, including Singapore’s Grab and Indonesia’s Go Jek.
However, underneath the record-setting financials lies a shaky foundation. As 360 million Southeast Asians use their smartphones to shop, order food, hail a ride, book travel, play games, apply for loans — and more — they fuel the region’s largest obstacle to sustained growth: a skilled workforce.
Filling the Gap
Leading Southeast Asia’s meteoric rise in online spending are Vietnam and Indonesia, with both countries achieving a 40% year-over-year growth rate. While consumer demand is at an all-time high, the supply of skilled tech workers struggles to keep pace.
A 40% YOY spike, while astonishing, sheds light on the enormous strain felt by organizations relying upon skilled workers to keep their operations afloat. When companies fail to maintain adequate staff, sales backslide, and bottom lines suffer.
Industry efforts to patch holes include hiring senior professionals from the ranks of retailers, global tech companies, and financial institutions. The idea is to leverage the experience of seasoned officers from the fields of finance and eCommerce.
One such C-level executive is Ben Fairbank, CEO and co-founder of Southeast Asia’s first blockchain venture builder, RedFOX Labs. Ben had this to say about the current situation:
“A shortage of skilled talent capable of running the businesses that consumers demand creates quite the dilemma. But we view the problem as an opportunity, which is why we chose Vietnam as the location for our venture builder.
Vietnam is rich in technical talent and responsible for an outsized portion of Southeast Asia’s explosive growth. Because Vietnam’s business talent has yet to match its technical counterpart, we saw the perfect opportunity to create businesses run by locals.”
Under RedFOX Labs’ D.B.O.T. — Design, Build, Operate, Transfer — business model, regional experts receive assistance with everything from sales, hiring, and go-to-market strategies. RedFOX identifies target markets, builds local-managed businesses within those markets, then helps refine each company before transferring control. In other words, RedFOX helps local talent build their ideal business — while retaining a portion of each venture’s equity.
An absence of readily available talent still lingers as one of SEA’s most persistent barriers to continued growth. By creating new talent in the region, RedFOX Labs is positioning itself as a significant player within Southeast Asia’s thriving Internet economy.