ASEAN needs a mutual digital market to promote 10 billion USD startups

Speaking at the ASEAN Business and Investment Summit (ASEAN BIS) 2023 taking place in Jakarta, Indonesia, CEO of Temasek Investment Fund, Mr. Dilhan Pillay Sandrasegara, noted that the Southeast Asian digital economy can be compared to India in terms of market size. The ASEAN digital economy holds great promise due to higher per capita income.

However, Mr. Sandrasegara pointed out that ASEAN currently constitutes a fragmented market, not only in terms of culture and language but also in terms of internet readiness and spending capabilities, creating challenges for a unified market. This lack of uniformity poses a relative challenge for ASEAN, as it sets barriers to integration.

After the rapid rise of tech unicorns in the region such as Sea, Grab, and GoTo, ASEAN has witnessed the emergence of new unicorns, startups valued at over $1 billion, along with decacorns, companies valued at over $10 billion.

According to Mr. Sandrasegara, the regional markets need to cooperate to enhance regulatory frameworks, thereby facilitating capital flows and organizational systems within the region. A unified digital market and a unified capital market would pave the way for the emergence of decacorns in the future.

To realize a single digital market, ASEAN countries need to develop digital infrastructure, services, and regulations across the bloc. The CEO of Temasek mentioned promising signs in this initiative, such as the increasing cross-border digital payments, particularly using QR codes, in some of ASEAN's major economies.

He also emphasized the importance of improving ASEAN's internet resilience and ensuring data privacy and security to accompany cross-border payments. Mr. Sandrasegara emphasized that enterprises play a critical role in this scenario

In July of this year, Temasek reported a net loss of $6 billion over 12 months (as of March 2023), primarily on paper due to the market downturn with a decrease in the valuations of technology, healthcare, and payment companies. Furthermore, factors like persistent inflation, increasing geopolitical tensions, and the Russia-Ukraine conflict have driven up costs and weighed on capital flows.

Participants in Southeast Asia's digital economy are still affected by macroeconomic headwinds, and most investors are cautious even though the long-term prospects for the digital economy in the region remain strong and positive.

According to Temasek's leadership, companies in the region are beginning to focus on sustainable business activities, concentrating on profitable business operations and limiting unsustainable incentives and subsidies. This is seen as a positive sign and a healthier development for the long-term health of Southeast Asia's digital econo