Southeast Asiaholds great potential for growth in the technology ande-commercesectors. It has a comparatively young and tech-savvy demographic which is experiencing a digital transformation jumpstarted by theCOVID-19pandemic. Even5Gcommercialization is being pushed in most of the region’s key countries.
Overall, theUS,EUandJapanremain the key investors in Southeast Asia. But this might change with China’s renewed focus on the region. The country has been investing in Southeast Asia across sectors for more than a decade now, with infrastructure projects traditionally bagging more funds. However,China’sinfluence in the region has increased after the start of its trade tussle with the US. Critical sectors like electricity and telecommunications are now being backed by Chinese investors.
The region’s smartphone landscape went through some volatility after COVID-19. This is whenChinesesmartphone OEMs started pulling share fromSamsung. Their smartphone share in Southeast Asia has made up a majority for more than a year now. It has increased substantially over the last few quarters. In Q2 2021, mainChineseOEMs made up 75% of the total smartphone shipments.
E-commerce initiatives by Chinese players
Chinese investors have been increasing their stake in the region’se-commercecompanies for some time now. Since 2017, e-commerce has been the avenue of interest for Chinese investment due to its growth potential and near-absence of any geopolitical challenge forChina在该地区。JD.com,阿里巴巴和腾讯ong the first Chinese investors to pump capital intoe-commercein this region.
5G initiatives by Chinese players
Some countries in the region depend onChinesetechnology and know-how.Indonesiahas been dependent on Huawei’s 5G technology for more than a year now. ThePhilippinesdepends on Chinese telecom infrastructure know-how. InThailand, Huawei has an active investment in 5G infrastructure. ZTE is anotherChinese有一个活跃的的玩家role in digital connectivity in the region. These three countries will look to reduce their overall dependence on Chinese tech in the coming months. Currently, however, their goals are focused on5Gdevelopment from an economic standpoint. Some countries like Malaysia andVietnamhave given Chinese5Gassistance the cold shoulder.
5G represents a leap in technological growth and overall data sharing. This is an important factor for Southeast Asian countries to consider while partnering withChina. Also, such decisions have the potential to become national security issues.
Many major telecom operators inSoutheast Asiaare lagging in 5G as they still need to recuperate from heavy 4G investments. This is also an area where Chinese capital plays a big part. In contrast, majorChinesesmartphone OEMs are ready with5Gdevices.
Manufacturing
Since some of the region’s countries are globalmanufacturinghubs (especially Vietnam and Indonesia), Chinese players will look to diversify their own production facilities. As production capacities shift out ofChina, these OEMs will aim at buying a stake in the region from aproduction和组装的观点。没有geopolitical issues and growth potential of the region will serve as motivations for these players.
The Chinese influence is currently strong in the region but so are the investments from US behemoths likeMicrosoftandGoogle. Southeast Asia will continue to see an influx of funding in the coming years as this region is set to witness an improved economic climate, enhanced industrial system and increased maturity of consumers with respect to tech.