Recently, Airwallex conducted a survey amongst over 250 Singapore-based SMEs about their international expansion plan and discovered the most popular destinations for these companies. While most of them would opt for their Southeast Asian (SEA) neighbours for their expansion, a great number are also looking beyond the region–with 21 per cent looking to expand to East Asia.
At the sideline of the 7th Elevator Pitch Competition (EPiC) by the Hong Kong Science and Technology Parks Corporation (HKSTP) in late April, e27 had an opportunity to speak to several startups that are participating in their programme. These fintech and proptech startups are using the event as a stepping stone either to enter the Chinese market or the international market–with Hong Kong as a stepping stone.
With its strategic location, reputation as an international finance hub, and support system for the startup community, there are some ways that these startups can use Hong Kong as a springboard for their expansion. We look at two companies with strong ties to SEA to understand how they are using it.
From SEA to HK
As one of the semifinalists of EPiC 2023 under the fintech category, Thailand-based Finema is using the event as an opportunity to support its international expansion plan.
“[Joining EPiC 2023] is a really good opportunity to do branding. It is an opportunity to find some local partners to expand our business into Hong Kong and China as the first step into China is Hong Kong. We got the chance to work with and to know more about how to step into Hong Kong through EPiC 2023 and HKSTP, with supporting information and everything,” says Chatchai Chanvej, Business Analyst & Business Development Lead at Finema.
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From its home in Bangkok, the startup builds a Decentralised Identity Platform to provide enterprises with holistic solutions. It builds digital ID cards as well as passwordless and multi-factor authentication.
“We have a product that is really beneficial for users who are going to step into Hong Kong. Or for businesses in Hong Kong who would like to expand to Southeast Asia,” he explains.
He also explains some use cases of their identity platforms that businesses and governments can use, for example, their ID card validation platform for travellers from SEA countries. In order to achieve this, Finema is working closely with local governments in the markets they operate in.
When asked whether there is any concern from the local government about safety and access to data, especially with Finema being a foreign company, Chanvej explains that it is important to have a local partner for Finema–to help build trust in the security of their platforms.
From Mainland China to SEA
For Leapstack, the goal of participating in EPiC 2023 is mainly to gain the attention of potential investors and incubator programmes. “I want to explore the opportunity to be under the eyes of investor and incubators and sees whether we have any chance to explore doing fundraising or business connections with other potential business partners,” explains Tung Can, CEO at Leapstack Vietnam.
The insurtech company was founded in 2015 in Mainland China. After nearly a decade in the market, handling mostly government projects and commercial insurance, Leapstack begins looking at the international expansion market.
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“We think that China is already a good market, but we need to expand internationally. So that’s why we decided to establish in Hong Kong. And then we changed the name to Leapstack International following our opening in Vietnam,” he explains. “We see the potential in Vietnam market with its population … there are a lot of elements that bring us to make a decision that we need to open Vietnam first.”
Vietnam is seen as an entryway to Southeast Asia before the company eventually expands to Asia Pacific.
“We had a lot of discussions; we think it might be the best opportunity to go through the international market through the Hong Kong gateway. We consider Hong Kong as a mature market with many opportunities, from business opportunities to government support,” says Tung Can.
“Over the past eight years, we’ve already built the know-how. That means we actually have the potentials to test all of our technology over the years. So, that’s why it’s enough for us to come out of China and expand the business and the technologies to other countries. But of course, different countries may have different types of medical treatment, clinical guidelines and market practices. So we not only utilise the current technology and systems we have in China, but we’ve foreseen that we need to adjust to every country.”
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