Welcome back,
Another month, another Southeast Asia tech report. Google, Temasek and Bain are back with the ninth edition of their e-Conomy analysis which delves into the region’s digital development and, for the first now, areas like profitability. It’s another must-read for people working in and around SEA tech.
Elsewhere, there’s worrying reports of Chinese hackers infiltrating Singaporean telco Singtel, Apple has established an R&D unit in India, and the founders of Malaysia’s FashionValet are being probed for “suspicious account transactions” after the low price sale of their startup earlier this year.
I’m off to Devcon and other crypto events in Bangkok this week—it’s going to be a busy one. Have a great week!
Jon
Follow the Asia Tech Review LinkedIn page for updates on posts published here and interesting things that come our way. If you’re a news junkie, the ATR Telegram news feed has you covered with news as-it-happens or join the community chat here.
It’s that time of the year as Google, Bain and Temasek released the e-Conomy SEA 2024 Report, one of the longest running in-depth assessments of Southeast Asia’s tech and digital development.
The release is less than a month after VC firm Lightspeed published a detailed report that ‘reset’ expectations of tech and startups in Southeast Asia. The authors argued that the hype had taken over and that now, in a relatively bearish period, we can be more realistic about Southeast Asia’s potential, which remains bright but isn’t at the levels of China or India.
The first e-Conomy SEA report came in 2016 (you can read details here) and the authors have at times been criticised for painting a rosy picture as they have a vested interest in the region’s success. This year, they devoted time to analysing profitability from tech companies and startups as well as the growth of AI and development of e-commerce in newer areas like video.
Here are some highlights we picked out:
-
Strong Growth in Digital Economy: Southeast Asia’s digital economy reached $263 billion in GMV in 2024, with sectors like e-commerce surging 15% year-on-year, fueled significantly by video commerce.
-
Profitability Milestones Across Sectors: Key players achieved profitability by optimising commission rates and introducing new revenue streams like in-app ads. Profit across the region’s digital platforms grew 2.5 times in the past two years.
-
Growing Role in Global Gaming: Southeast Asia is emerging as a major hub for mobile gaming, now accounting for 12% of global downloads. This trend also supports the expansion of a strong creator ecosystem across the region.
-
Investor Optimism Despite Funding Challenges: Although private funding volume is down, investors remain optimistic about SEA’s potential, particularly in nascent sectors like AI, digital finance, and sustainability tech.
Interestingly, the inaugural report in 2016 forecast that Southeast Asia’s digital economy would reach $200B by 2025, so that milestone was broken by some margin already in 2024.
There’s worrying news of Chinese intelligence accessing critical communications data after reports claimed hackers aligned with the country breached Singapore-based telco Singtel over the summer.
Dubbed Volt Typhoon, there were reports of the group’s activities earlier this year and last year, which included infrastructure targets in the US but that graduated to deploying malware into Singitel’s in what is dubbed a ‘test run’ for an assault on US mobile operators.
Singtel said in a statement that no data was stolen nor were its services interrupted, but the fact that its network was breached is hugely concerning as it is not yet known what the attackers were able to glean. Similar attacks in the US enabled the group to capture call logs, encrypted text and some audio from thousands of individuals, including national security and policy advisors and politicians, according to reports.
The FBI is investigating whether China exploited US telecom networks to infect iPhones of senior staff in a presidential campaign, according to Rocky Cole, founder of mobile security firm iVerify. Cole told Forbes that iVerify’s software detected unusual activity on two iPhones but did not disclose the campaign.
The Wall Street Journal reported on the rise in importance of cyber security groups in China:
China’s intelligence agency, allegedly behind major U.S. cyberattacks, has gained power and visibility under Xi Jinping and Chen Yixin, whom Xi appointed two years ago to lead the Ministry of State Security (MSS). Since then, Western officials report a surge in Chinese espionage, with security agencies, private firms, and civilians collecting vast amounts of intelligence.
Chen has intensified the MSS’s role, cracking down on foreign firms, driving a social-media campaign against alleged U.S. subversion, and, according to American sources, overseeing sophisticated hacking operations like the recent attacks attributed to “Salt Typhoon.”
Chen describes this mission as vital in China’s strategic competition with the U.S., urging citizens to aid in counterespionage efforts, reviving Cold War-style vigilance against foreign spies.
Several US semiconductor tech firms are reportedly under scrutiny as the US considers new export restrictions on China link
The US ordered TSMC to stop shipping advanced AI chips to Chinese clients starting Monday, according to a source link
And TSMC has informed its graphics processor and AI accelerator clients in China that it will stop producing advanced chips for them link
Baidu is about to unveil AI-powered glasses to rival Meta’s Ray-Bans, which will feature built-in cameras and voice interactions powered by its Ernie model link
Autonomous driving technology developer DeepRoute.ai raised $100M link
Self-driving truck startup Autra.tech is scaling down operations amid a cash crunch and potential US sanctions link
ByteDance’s international revenue surged over 60% to around $17B in the first half of 2024, driven primarily by TikTok’s strong ad performance despite US ban threats—overall revenue, largely from Chinese apps like Douyin and Toutiao, rose more than 35% to $73B, that’s a slowdown from last year’s 40% growth link
Canada ordered TikTok’s business in the country to shut down due to national security issues but it won’t ban access to the app for consumers link
The UK has ordered a Chinese-owned holding company to sell its stake in Glasgow-based semiconductor firm Future Technology Devices International (FTDI) after a national security review link
Wang Huiwen, a co-founder of Meituan who stepped down last year, has returned to lead its AI initiatives as tech firms rush to adopt the rapidly evolving technology link
Temu faces potential fines for breaching EU consumer-protection laws, intensifying its regulatory troubles just a week after a separate EU investigation began over illegal sales practices. The European Commission and regulators from Belgium, Germany, and Ireland have ordered Temu to stop “problematic practices” that mislead consumers and breach the EU’s product safety rules. These include fake discounts and reviews, a “fortune wheel” game with undisclosed conditions, misleading information, and obscured customer contact details. link
Apple has established its first Indian subsidiary, Apple Operations India, focused on R&D, design, testing, and support for third-party manufacturers link
India’s financial crime agency recently raided offices of some Amazon and Flipkart sellers, investigating alleged foreign investment rule violations, according to government sources link
Truecaller, a Sweden-based app for avoiding spam calls which is popular in India, is another to be hit by a raid, this time round taxes link
Meanwhile, Truecaller co-founders Alan Mamedi and Nami Zarringhalam are stepping back from daily operations—product chief Rishit Jhunjhunwala will take the top job in January as the company aims to reach 1B users and overcome a difficult year that saw revenue decline in previous quarters, though Q3 saw revenue jump 15% to $42.3M link
Elsewhere, India’s antitrust body found that food delivery giants Zomato and Swiggy violated competition laws by favouring certain restaurants on their platforms—the investigation began in 2022 link
Wikipedia is under pressure as Indian regulators issued a notice challenging its editorial concern and complaints of bias link
Canva’s India business doubled over the last year, to become its fifth largest market and fueling the company’s overall $2.5B revenue run rate link
Indonesia’s sovereign wealth fund INA and Singapore’s Granite Asia (the fund formerly known as GGV) announced plans to jointly invest up to $1.2B in Indonesia’s tech sector and related businesses link
Malaysia continues to probe FashionValet, the e-commerce brand that was sold in a fire sale earlier this year and had received banking from the country’s sovereign wealth fund link
The Malaysian Anti-Corruption Commission (MACC) has identified several suspicious account transactions in an investigation concerning investment losses amounting to RM43.9 million sustained by Khazanah Nasional Berhad (Khazanah) and Permodalan Nasional Berhad (PNB) in FashionValet.
MACC chief commissioner, Tan Sri Azam Baki, said that these suspicious transactions have been detected from 2018 until last year, based on the investigation conducted so far.
“The investigation team has, so far, concluded that there are suspicious account transactions from a company linked to the founders of FashionValet and several other parties under investigation.
“We have also detected some dubious financial transactions, which began from 2018 to 2023,” he said when contacted this evening.
US tech companies have warned Vietnam that a draft law on data protection and restricting data transfers abroad could hinder the growth of social media platforms and data centres in the country link
Apple plans to invest nearly $10M in Indonesia to produce more goods locally, in response to the country’s ban on sales of its latest iPhone which focus on a lack of mandatory investment in the country link
Malaysia’s new data centres for tech giants like Google, Amazon, and Nvidia are transforming Johor state, creating thousands of jobs but raising concerns about power and water shortages, as well as potential spikes in real estate costs for locals link
Visa and Tencent have partnered to launch a pay-by-palm solution, starting in Singapore and expanding to other markets link
Coupang shares fell up to 8.9% in late trading Tuesday after retail net sales of $6.14 billion missed Wall Street’s $6.24 billion estimate. Despite double-digit sales growth for a seventh consecutive quarter, driven by new ventures like food delivery, net income declined, partly due to losses from its January acquisition of luxury retailer Farfetch. Net revenue rose 27% to $7.9 billion, exceeding analysts’ $7.8 billion estimate. link
Nvidia CEO Jenson Huang asked SK Hynix to bring forward supply of HBM4 chips by 6 months, SK’s chairman said link
South Korea has fined Meta 21.62B KRW ($15.67M) for collecting sensitive data from 980,000 South Korean Facebook users and sharing it with advertisers without proper consent link
Japan taps US chip startup Tenstorrent to help train new wave of engineers link
Chipmaker Kioxia, which is owned by a consortium led by Bain, filed for IPO with a target of December—the company shelved plans in October after it failed to find its valuation of $9.8B from investors. Now it is using a new rule that enables firms going public to engage with investors before Tokyo Stock Exchange approval which could help it reach that target valuation link
SpaceX asked Taiwanese suppliers to transfer manufacturing off the island, leading to some relocating portions of their supply chain, according to sources employed by and close to the equipment makers and corporate documents link
Apple, though, has asked Foxconn to produce servers in Taiwan rather than China as part of its AI push, though Nvidia demand could limit the supplier’s capacity, sources say link
Taiwan’s slow energy transition is straining its tech industry and impacting companies like TSMC—TSMC now expects to pay more for power in Taiwan than in any of its other locations, including the US, Japan, and soon Germany. “Basically, the price has doubled in the past few years,” CFO Wendell Huang told investors link
TSMC says its US investment plan remains unchanged after election of Donald Trump link
