Day: November 11, 2020

Did you know the Chinese government wants to overcome its technological rivals and build a national AI industry worth over US$150 billion?

The country’s ambition is increasingly higher in the field of technology. According to The New York Times back in 2017, after AlphaGo defeated a popular South Korean teacher in the complicated strategy game Go and beat the best player in the world Ke Jie, the government of China began to see Artificial Intelligence (AI) as one of its main objectives. These two events opened the way to a new flow of funds and projects in this area.

Now, in addition to making it a national-level goal, China also plans to lead the sector internationally. Last year, the executive government established a development plan to turn the country into the world leader in AI by the year 2030. This would mean, on the one hand, overcoming its powerful rival the US, and, on the other, securing a large investment of money. Its objective is to build a national industry worth over US$150 billion and unseat its technological rivals.

Fast forward to 2020. It has been a challenging year, but it has not stopped China from investing in R&D to achieve this goal.

Beijing set a timetable to determine when the country is expected to become a world leader in cutting-edge technology. Li Meng, Vice Minister of Science and Technology, predicts that by the year 2020 China’s AI research technologies and facilities will equal those of other leading countries, reaching a production of US$22 billion. In 2030, “a breakthrough” is expected and China will finally become the “centre of global innovation”, with a production valued at US$147 billion.

The plan signals China’s desire to lead an area that is growing rapidly. With the intention of securing this first position, the government will invest to ensure that its companies, government, and military sector jump to the front of the field of artificial intelligence. To do so, they will support moonshot projects, used by Google to solve problems, startups, and academic research with the aim of increasing the success of AI development.

Also Read: Ethics and Artificial Intelligence: Is the technology only as good as the human behind it?

Andrew Ng, one of the leading AI experts and founder of the Google Brain project, has highly valued the commitment of the Chinese government, saying that “it would really help both the Chinese AI and the global AI”.

China wants to introduce AI in almost all areas of society, from agriculture and medicine to manufacturing. It also wants to work hand-in-hand with this growing industry to strengthen security and national surveillance. The Asian country plans to integrate AI into guided missiles, use it to track people in closed-circuit cameras, censor the internet, and even predict crimes.

This has led to alarms ringing in the US, which are already aware that Chinese investors have helped develop many American companies. Over the last few years, we have seen the fight of the US to ban deals with Chinese tech giants.

The current US election could change everything over the next coming months.

According to The New York Times, Chinese people and provinces are already betting millions of dollars for the development of robotics and AI in the form of direct incentives for the industry and subsidies to encourage local businesses. In addition to that, from this new plan, the government plans to attract private companies such as Baidu, which has run an AI research centre in Silicon Valley and already announced this year that it would open a new laboratory in China.

During COVID-19, we have seen how China has surfaced as a clear leader for AI applications in the healthcare industry as an example. China increased the incorporation of AI healthcare tools, not only in hospitals but also in everyday life.

We are not here to question whether AI will continue to grow at such a fast pace or not; we know this is a fact. But will China be number one?

With all the battles they have in their hands, will their speed slow down? Or will they prevail and do what many say it is impossible?

Also Read: Nektar.ai raises US$2.15M to build a sales collaboration platform for B2B firms

This unprecedented year has made this decade question the status quo of life, and the one thing we have learned is that technology and AI are a big asset to all.

Let’s embrace technology and follow the evolution of AI.

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99 Group, a Singapore-based property tech company, today announced it has acquired Singapore Real Estate Exchange (SRX) for an undisclosed sum.

As per a press statement, 99 Group will wholly acquire SRX with the transaction expected to be completed by Q2 2021. All of SRX’s employees will be retained and 99 Group will be transitioning and integrating the team in the coming weeks.

The leading property platform and real estate data provider in Singapore, SRX will join other platforms including 99.co and iproperty.sg in the 99 Group.

According to the company, with a widened pool of property listings and data tools, customers can look forward to more affordable and competitive property packages.

99 Group CEO Darius Cheung said: “SRX’s best-in-class data capabilities are a natural fit for our platform that increasingly emphasises the quality of listings and content so that users receive trustworthy information. The proprietary technology will also boost our ability to roll out game-changing innovations in the region.”

“Reliable property data is especially important as property hunting continues to shift online even though physical viewings are now allowed again, suggesting a lasting change in consumer behaviour. The real estate industry needs to digitalise accordingly to meet evolving consumer needs,” he added.

Also Read: Can SEA’s proptech come back to its pre-COVID-19 glory? Experts speak

SRX CEO Jason Barakat-Brown said: “We’re delighted to join forces with 99 Group to create the most compelling property platform in Singapore for home-seekers and professionals alike.”

“Our businesses and teams are highly complementary and, importantly, we share a common mission to deliver the best technology and real estate expertise to inform and empower our customers. We look forward to bringing further innovations to the market in Singapore and the region as part of the 99 Group family,” he added.

Established in 2009, SRX is a property platform and real estate data provider in Singapore. Utilising artificial intelligence, its algorithms claimed to be able to provide an instant and accurate estimate of a property’s value.

Previously, 99 Group has implemented a similar blueprint of acquiring Indonesia-based property tech startup UrbanIndo and merging with rumah123, with the goal to become the largest property tech platform in the archipelago.

Despite the economic uncertainty brought about by the pandemic, 99 Group said that it has continued to expand amid hastened digital transformation within the industry. The company announced in September that it will hire 100 additional tech staff over 12 months to grow its product and engineering teams.

It is currently running the Singapore Property Show, an online property bazaar with narrated tours of virtual show flats for 18 new launch developments. The company said that the event received more than 1 million engagements within two days of its launch and more than 85,000 live views of its webinars within the first two weekends.

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Southeast Asia’s tech investment landscape continues to flourish with an increase of 17 per cent in the number of deals between H1 of 2019 and 2020, as says the ‘e-Conomy SEA Report’, jointly conducted by Google, Temasek and Bain & Company.

The total deal value declined slightly from US$7.7 billion to US$6.3 billion, over the same period, attributable to the slowdown in big-ticket unicorn investments, reveals the study.

This has meant smaller, non-unicorn investments which continue to grow, made up more than half (53 per cent) of the total deal value, against 34 per cent the preceding year.

According to the study, titled ‘e-Conomy SEA 2020. At full velocity: Resilient and racing ahead’, the deal value in the fintech sector surged to US$835 million in H1 2020, from US$475 million in H1 2019. Overall, there was a 24 per cent increase in the number of deals during this period.

Funding for unicorns in mature sectors such as e-commerce, transport & food, travel and media decreased from US$5.1 billion in H1 2019 to US$3 billion H1 2020. Platforms are now refocusing on their core business and established strengths in order to prioritise a path to profitability.

The study further reveals that the COVID-19 pandemic has led to big shifts across the region, which included the coming of 40 million people online for the first time this year, bringing the total number of Internet users in the region to 400 million.

The region’s digital economy remains strong and resilient despite the headwinds. The adoption and usage of e-commerce, food delivery, and online media have surged.

Fintech solutions are set for a tailwind in the long run as consumers and small and medium-sized enterprises (SMEs) have become more receptive to online transactions.

Owing to the surge in digital adoption by customers and businesses, digital payments continue to see growth from US$600 billion in 2019 to US$620 billion in 2020 and is expected to reach US$1.2 trillion by 2025.

As per the findings of the report, the hardest-hit sector in the region is online travel. There are, however, signs of recovery in domestic tourism. Online travel is expected to bounce back to US$60 billion by 2025.

Also Read: Here are the 5 predictions for Southeast Asia’s travel industry trends post-COVID-19

Similarly, while lockdowns and restrictions have eased within the region, the continued work-from-home arrangements and reduced confidence in shared transportation will likely see muted resurgence through the first half of 2021.

The transport and food sector is expected to bounce back to US$42 billion in gross merchandise volume (GMV) by 2025.

The pandemic has also brought about growth in adoption of nascent sectors such as healthtech and edutech. Digital health apps were used four times more than before the pandemic while leading education apps were used three times more. This has prompted growing investment in these sectors.

Southeast Asia continues to make progress in overcoming the initial challenges of the internet economy by making internet access more affordable and strengthening consumers’ trust in digital services.

The average number of cash transactions declined from 48 per cent pre-COVID-19 to 37 per cent after the pandemic, ​while the exponential spike in e-commerce prompted numerous logistical improvements across the region.

However, talent constraints remain a pressing concern as companies look for skilled workers that can thrive in a fast-growing digital economy.

Also Read: How to bridge the tech talent gap in a post-pandemic world

Commenting on the report insights, ​Stephanie Davis, Vice President, Google Southeast Asia ​said, ​”COVID-19 has changed people’s daily lives in fundamental ways. The digital adoption that was projected to happen over several years has accelerated.”

“With its young, diverse and mobile-first population, and a host of innovative startups, Southeast Asia will continue to define the future of digital ecosystems,” she added.

Rohit Sipahimalani, Chief Investment Strategist and Head (Southeast Asia), Temasek remarked​, “The region’s internet economy will be the key driver of social progress in areas of interest to us and support more sustainable and inclusive growth.”

“While COVID-19 has been challenging for everyone, the changing behaviour of consumers has massively accelerated the digital adoption rate, even in a country like Singapore, where it was already very high,” he elaborated.

Aadarsh Baijal, Partner and Head of Digital Practice in Southeast Asia, Bain & Company, opined, “Despite significant challenges this year, the long-term outlook for Southeast Asia’s digital economy remains more robust than ever.”

“We expect that a number of factors, including dramatic growth of consumer adoption, greater trust in technology, and market forces creating significantly greater online supply, will give a permanent boost to the digital economy,” ​he explained.

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Bangkok-headquartered Thai Wah is a 73-year-old company that manufactures tapioca, vermicelli and rice noodle products.

The firm, which produces over 300,000 tonnes of tapioca and rice starch and glucose and noodles a year, claims to have the largest market share in Thailand and much of the rest of Southeast Asia.

In addition, it also exports its noodle and starch products to countries such as China, Japan, Taiwan and the US.

While digitalisation has always been on the radar of Thai Wah, it was not until the onset of COVID-19 the company gave serious attention to it. Now, as the pandemic has brought a huge shift in the user behaviour and how a business is run, Thai Wah has started leveraging digitalisation to improve efficiency and productivity.

In this interview with e27, Hataikan Kamolsirisakul, Head of Strategy and Innovation at Thai Wah, speaks about how technology is changing its business.

Excerpts:

In a media interview, your CEO Ho Ren Hua has talked about the importance of digitalisation. What motivated the firm to change in its thinking?

We are driven by our core purpose to serve our global customers and consumers better everyday. Our mission is to create innovation and sustainability from farm to shelf.

Also Read: How Thailand is making strides to mold Bangkok into a global startup destination

We have 13 operations in Asia and our business stretches across 30 countries in Asia, the US and Europe. Digital is the enabler to understanding our diverse customer base better, to innovate the right products and solutions and to deliver at the right time.

B2B business is about relationships and meaningful human interactions. Pre-COVID-19, our commercial and technical service teams would travel to meet customers in person in various countries such as Japan, Indonesia, the US, China.

Trade shows had been a key event which allowed us to meet new partners and customers and build trust. The pandemic halted all travel and the traditional ways of communications were at a standstill.

We moved fast as a company to accelerate our digital roadmap from two years to two months. At the internal level, all associates working from home were connected through digital communications platform, our commercial teams connected well with customers digitally.

We also upgraded our IT systems at all factories to allow our customers to conduct live factory audits. To reach new customers and partners across the globe, we launched our first digital B2B marketplace and participated in global virtual conferences.

What are the various solutions you have incorporated to your product/services? Can you walk us through each and every one of these?

As I said earlier, our mission is to create innovation and sustainability from farm to shelf.

Let’s start from the farm. We work with leading startups in the region to have eyes in the sky that accurately create geo map of our crops, identifies the status of crop health and predict yield with over 90 per cent accuracy. This technology allows us to deploy our agronomist to support farmers where and when needed.

In addition, to serve our farmers better, we also offer payments within 30 seconds to our farmers’ digital wallet.

On the production and logistics side, we aim to deliver value to our customers which translates to quality, transparency and speed. Tech solutions include engineering, processing and foodtech.

To serve our customers better, we look to tech to help us engage and understand our customers better. We collect data points from internal and third-party sources to our digital CRM system to analyse and zero in on which activities will make the most impact to each of our customer and consumer segments.

Also Read: Thailand’s plant-based meat startup battle intensifies as the annual Vegetarian Festival kicks in

Finally, for our associates, we deployed multiple solutions to our digital people platform to simplify the ways of work. The platform includes online classes for the Thai Wah Leadership Academy, Performance Management Systems and administrative functions to decrease the use of documents.

Do you have an in-house IT team to develop digital solutions?

Not a single person or company can do everything themselves if they want to make the right move and fast. We believe open innovation will help us develop the right solutions faster.

Over the past four years, we have collaborated with multiple partners within agtech, foodtech and supply chain space to pull together solutions that best fit our digital vision.

Do you see a definite trend among Thailand’s big companies to adopt technology and why? If yes, did the pandemic contribute to this change of mindset?

Since the launch of the Thailand 4.0 vision in 2016 that aims to drive growth through digital and technological innovation, Thai companies have embraced the policy as part of their strategies.

The areas of focus included moving from traditional farming to smart farming, traditional businesses to smart enterprises, and traditional services to high-value services.

The roadmap has, however, been long because even though solutions are available, its success still depends on people and culture.

COVID-19 accelerated the digital and tech transformation faster in the first month of the outbreak than any leader could have done in the last five years. It was mission imperative for companies to keep colleagues safe, secure operations and continue to serve customers.

Many companies moved fast to adopt technology that is readily available. COVID-19 did contribute to the mindset change although not instantaneous, but definitely much faster.

Do you think adopting digital solutions has become a ‘must have’ rather than a ‘nice to have’?

Companies must first start with their vision and then understand how technology and digital solutions can enable them to reach that goal.

Not every thing needs and can be digitalised or solved through technology. Many things still require the ‘human touch’ such as building trust.

As we embarked on our digital transformation journey four years ago, we started with looking at our end-to-end value chain, from farm to shelf and debated about where we see tech fitting in to benefit customers at each touch point.

Let’s take an example from the upstream at the farm. Sustainable source of our raw materials while improving the lives of our farmers is what we strive for.

We could keep doing so through tradition means of deploying our agronomist and sourcing teams to advise farmers everyday.

However, without proper data collection tech, we would be limited to a smaller group of farmers and the impact of what we could do would be smaller and slower.

Also Read: No animals were harmed in the making of this ‘meat’ burger

Tech however, does not solve everything. Building farmer relationship still needs a ‘human touch’. Tech simply enables us to make sure that each time our farm team meets our farmers, that human interactions is more beneficial because of the quality of information and insights we have collected digitally.

Many conglomerates around the world have launched corporate VC funds to make strategic investment in tech startups. Do you have plans to follow suit?

Over the last one to two years, we have partnered with corporates and startups to co develop solutions rather than directly investing for equity. We currently do not have plans to start a corporate venture capital but there is always a possibility down the road.

We do believe that the best ideas and solutions not only come from within but also from the outside. We will continue to work with global startups to source innovative tech solutions for our industry and use our regional operation to scale innovative and sustainable solutions.

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Image Credit: Thai Wah

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Indonesian fintech company LinkAja has received a strategic investment from Grab as part of its Series B round.

Grab led the round as a minority investor, with participation from Telkomsel, BRI Ventures and Mandiri Capital.

As per a press release, LinkAja has received a total commitment of up to approximately US$100 million for the new round.

The fintech firm will use the money to accelerate its growth. It also seeks to position itself as the leading fintech provider for the middle-class and micro, small and medium enterprises (MSMEs) in Indonesia.

Also Read: Indonesia’s state-owned lender BNI to set up a US$50M VC arm, to invest in LinkAja

The strategic investment from Grab allows both parties to collaborate on areas of market access and technology. Together, they hope to accelerate financial inclusion within the archipelago.

LinkAja is the flagship product of Finarya, an electronic money issuer and digital financial services provider and subsidiary of Telkomsel.

In June 2019, it also developed an e-wallet in collaboration with Indonesia’s state-owned enterprises.

Since then, LinkAja has rapidly developed its user and merchant base for e-payment services and built a fintech platform to enable digital financial services focused on Indonesia’s middle-class/aspirant and micro, small and medium enterprises (MSMEs) segments in the archipelago.

LinkAja claims it currently has more than 58 million registered users, and more than 80 per cent of users come from Indonesia’s tier 2 and 3 cities.

In April 2020, LinkAja launched sharia e-money in Indonesia that has received a Sharia Conformity certification license from the National Sharia Council of the Indonesian Ulema Council and Bank Indonesia. Within six months of launch, more than one million users had registered with the Sharia platform.

Grab launches tech centre

Additionally, Grab has announced the opening of its tech centre in Indonesia. The centre will also serve as its regional innovation hub dedicated to building technology solutions for MSMEs in Southeast Asia.

Also Read: Why digital lending services for MSMEs are the next big thing in SEA?

The centre is located at Gama Tower, with facilities spanning over nine floors and 12,000 sqm in total.

As a regional innovation hub for MSMEs, the centre will focus on researching, designing and testing tools and technology for the Indonesian MSME market first, which will then be exported to other emerging markets in Southeast Asia.

The launch of the tech centre supports the ‘Grab for Good’ goals announced last year, which includes digitalising five million traditional and small businesses by 2025.

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