How will a post-COVID-19 look like?
There is no a clear answer to this question. But one thing is certain: this pandemic will force some behavioural changes — not just on the people but also industries. And those who effect the changes as soon as possible will come out successful.
Southeast Asia will be no different. The region, home to over 650 million people and startup unicorns like Grab, gojek and Tokopedia, will certainly be impacted severely.
But the silver lining is that its young population and budding startup and VC landscape, which will present a greater opportunity to fully realise the region’s potential.
Cathay Innovation — a VC firm operating across Europe, North America, China and Southeast Asia — published a detailed report on the impact of COVID-19 on the region.
As per this report, the current crisis presents an opportunity for the region to leapfrog many economic activities into the digital world as businesses will be required to run more efficiently after a big reset.
Also Read: Why Khailee Ng puts mental healthcare support as key to successful founders-investors relationship
The healthcare, education, retail, agriculture, and logistics sectors will specifically see a new wave of digitisation and local startups and tech companies will be well-positioned to participate in the reinvention of these industries.
“With mobile technologies and connectivity more prevalent, the population will have better access to information, financial services and education, which are fundamental for people to learn about, identify and seize economic opportunities,” Cathay Innovations’s Co-founder and CEO Denis Barrier in a blog post.
As per this report, the most transformation and opportunity will be visible in the following industries:
1. Healthcare
Apart from Singapore, most SEA countries suffer from an under-developed healthcare system, lacking the hospital beds and doctors to satisfy demand.
The digital health sector has attracted large amounts of investment, even before the pandemic, with APAC drawing over US$6.8 billion in investment in 2018 and SEA alone coming in at US$242 million in 2019 (according to Galen Growth Asia).
Telemedicine in particular has proved extremely valuable as a way to optimise consultation management while doctors are scarce.
For example, take a look at Indonesian mobile health tech platforms Alodokter, which has raised over US$45 million in funding, and Halodoc, with nearly $100 million from investors such as the Bill and Melinda Gates Foundation, serving around seven million patients per month with 80 per cent of patients residing outside the main city centres.
“Digital health and tele-medicine platforms are well-positioned to compensate for the deficiencies of SEA’s healthcare systems and will certainly grow further during the pandemic. While many different models will co-exist, we’ll likely see influence from the large Chinese digital health platforms like Alihealth, WeDoctor, Ping An Good Doctor, DXY and others,” Barrier shares.
Singapore will have a major role to play as the center of excellence for healthcare in the region. Healthcare and biomedical sciences is one of the four pillars of Singapore’s national R&D strategy, representing a US$4 billion budget for the Research, Innovation and Enterprise (RIE) 2020 Plan of the National Research Foundation.
2. Mobility, logistics, retail, and supply chain
The pandemic will revolutionise several sectors, pushing small and medium enterprises (SMEs) to reinvent their operating model by impacting mobility, logistics, retail operations and supply chains.
Naturally, the retail sector will suffer the most as populations will be in lock-down for several weeks to months. The recovery of offline retail will certainly imply a wave of digitisation of retail operations to build more resilient companies.
In parallel, online retail and last-mile delivery will clearly benefit from social distancing.
Companies like Grab, gojek and Ninja Van, have had to quickly ramp up to meet the demand for fulfilment of online grocery, food delivery and e-commerce all over the region.
Innovative technologies such as Machine Learning will be required to optimise platforms that are reaching operating bottlenecks and will benefit from more data-centric models in areas like pricing, addressing, inventory management, routing and supply chain management to make logistics and e-commerce operations faster and more resilient.
3. Fintech, edutech and future of work
In an environment where 70 per cent of consumers are underbanked and 70 per cent of SME merchants accept cash-only payments, fintech companies and online lenders are likely to emerge as big winners with the closing of physical bank branches and more transactions driven online.
As most of these companies acquire users online, the increase in e-commerce and online transactions will bring more traffic to fintech companies in the region who are positioned well to help people in precarious financial situations after a loss of income or unemployment.
“Finally, the crisis will create massive opportunities in the edutech and ‘future of work” space,” continues Barrier. “In China, we saw investment in online education spike at the end of the lockdown with the drastic increase in time spent on online education platforms.”
New ways to work and vocational education will also be very promising sectors. Just like the explosive rise in video conferencing services like Zoom, we can anticipate that collaborative and decentralised work platforms will gain in popularity, the report states.
With unemployment rising, online hiring platforms (such as Kalibrr in the Philippines or older generation JobStreet/JobsDB portals) are expected to accelerate during the post-pandemic recovery period.
“The opportunity for innovation and investment in Southeast Asia (SEA) remains strong, with the region fundamentally enjoying favourable growth factors due to its demographics, modernisation, rapid growth of its digital economy, and accelerated tech adoption,” Barrier concludes.
The post ‘Post-pandemic, SEA will see a sustainable leapfrog into the digital age’: Cathay Innovation report appeared first on e27.