Singapore is putting its biggest messaging, social media and e-commerce platforms on notice: stopping scams is no longer just a matter of taking down bad actors after users have been hit.

The Singapore Police Force said it has issued new and updated Codes of Practice for designated online services, requiring platforms to take stronger steps to detect, disrupt and prevent scams targeting users in the city-state. The rules cover online messaging and conferencing services, social media platforms, and e-commerce services, and must be complied with by January 31, 2027.

Also Read: Beyond the social media ban: What Singapore can learn from the next phase of online child safety

The move reflects a shift in how regulators across Southeast Asia are dealing with online harm. Scam activity is no longer confined to obscure websites or cold calls. It has moved into the apps people use daily to message family, join investment groups, shop for second-hand goods, and follow creators. That makes platform design — who can contact whom, how ads are approved, and how accounts are verified — a frontline issue in public safety.

“These COPs strengthen our safeguards against scams by requiring providers of designated online services to put in place measures to proactively disrupt scams and malicious cyber activities affecting people in Singapore,” SPF said.

The new framework includes a fresh Code of Practice for Online Messaging and Conferencing Services, a new Code of Practice for Social Media Services that replaces the existing Code for Online Communication Services, and an enhanced Code for E-Commerce Services.

Messaging apps come under sharper scrutiny

The new Messaging Code will apply to WhatsApp, Telegram, WeChat, Apple iMessage, Apple FaceTime, Google Message and Google Meet, services assessed as posing the highest scam risk to users in Singapore.

SPF said online messaging platforms such as WhatsApp and Telegram accounted for about 23 per cent of total scam cases in 2025. Investment scams are a particular concern. In many cases, scammers approach victims through accounts previously unknown to them, offering attractive investment products that later turn out to be fraudulent.

To reduce this risk, messaging platforms will have to make it harder for unknown contacts to reach or manipulate users. This includes requiring a user’s consent before an unknown contact can add them to a chat group or channel.

Platforms will also need to display contextual warnings or risk indicators when users receive messages or calls from unknown or suspicious accounts. For instance, a service may have to show the account creation date and country of origin of an unknown or suspicious account, giving users more information before they decide whether to respond.

Users must also be given tools to silence, filter or block messages or calls from accounts or telephone numbers that are not in their contact list.

These interventions may appear small, but they address a common weakness in scam journeys: the first point of contact. Many victims are pulled into fraudulent schemes through unsolicited chats, then gradually moved into private groups where scammers use social proof, fake testimonials and pressure tactics to build trust.

The Messaging Code also targets Government Officials Impersonation Scams, where criminals pose as police officers or other public officials. SPF said about 18 per cent of such cases in 2025 took place on WhatsApp, while other services such as Google Meet have also been used in phishing scams involving impersonation of police officers.

Also Read: Why do people fall for online scams in this digital age?

To counter this, platforms will be required to prevent the spoofing of the Singapore Government through profile names or pictures.

Social media advertising becomes a regulatory focus

The new Social Media Code will apply to Facebook, Instagram and TikTok. According to SPF, social media platforms accounted for about 30 per cent of total scam cases in 2025, with Facebook alone making up about 18 per cent.

A central concern is advertising. Scam operators often use paid ads to reach victims quickly, directing them to fake investment schemes, phishing pages or fraudulent sales listings. The problem is not unique to Singapore. Across Southeast Asia, regulators and consumer protection agencies have struggled with scam ads that can be launched, altered and removed faster than traditional enforcement processes can respond.

SPF was direct about where responsibility lies. “Social Media platforms profit from the publication of advertisements and must ensure that the content in the advertisement is not in furtherance of a crime,” it said.

Under the new code, platforms must prevent the publication of any advertisement accessible to Singapore users if there is reason to suspect that it furthers a scam. This includes assessing whether an ad uses URL cloaking, a tactic where the visible link hides the actual destination website, or whether it contains other suspicious content.

Platforms must also promptly remove suspected scam advertisements accessible to Singapore users, including those reported by users. In addition, they will have to verify advertisers’ identities against government-issued records before allowing them to target Singapore users.

Financial services ads will face stricter checks. Platforms must disallow advertisements offering financial services or products to Singapore users unless the advertisers are licensed by the Monetary Authority of Singapore or another applicable Singapore authority.

This provision is especially significant in a region where retail investing, crypto speculation and digital wealth products have expanded quickly. The same tools that help legitimate fintech firms acquire customers cheaply can also be used by fraudsters to scale deception.

E-commerce rules tighten around accounts and ads

Singapore is also strengthening its E-Commerce Code, which applies to designated platforms including Carousell, Facebook Marketplace and Facebook Business Pages.

The enhanced code builds on existing requirements for seller verification and payment protection. Platforms will now have to introduce stronger consent measures before permitting logins from new or unrecognised devices. This is aimed at reducing account takeovers, where scammers hijack trusted accounts to deceive buyers or sellers.

Also Read: Growth at gunpoint: Why VCs share the blame for startup fraud

The updated e-commerce rules also adopt safeguards from the Social Media Code to protect users from scam advertisements. That matters because the boundaries between social media and commerce have become increasingly blurred. A user may see a product in a Facebook ad, message a seller, pay through a third-party channel, and only later realise the listing was fraudulent.

For marketplaces, the challenge is balancing convenience with trust. Too much friction can hurt legitimate sellers and buyers. Too little gives scammers room to operate at scale.

Penalties give the rules sharper teeth

The government is also moving to strengthen the penalty framework under the Online Criminal Harms Act. The Ministry of Home Affairs proposed legislative amendments in Parliament in August 2026 to give regulators stronger enforcement powers.

Under the proposed framework, for each instance of non-compliance with a Code of Practice or Implementation Directive, the OCHA Office may issue a financial penalty of up to SGD 10 million (~US$7.83 million) or direct the online platform to rectify the breach through a Rectification Notice or Compliance Order.

Failure to comply without reasonable excuse would be a criminal offence, punishable by a fine of up to US$7.83 million. For a continuing offence, the platform may face a further fine of up to about SGD300,000 (US$235,000) for every day, or part of a day, during which the offence continues after conviction.

The financial stakes are high, but the broader message is more important: Singapore wants platforms to design against scams before harm occurs, not merely respond after reports pile up.

SPF said the new measures build on Codes of Practice introduced in June 2024 and reflect the government’s continued partnership with industry. It noted that scam cases reported on designated online services fell by about 37 per cent between 2024 and 2025.

That decline suggests earlier measures may be having an effect. But the latest rules also show that Singapore expects the scam threat to keep evolving. For platforms operating across Southeast Asia, the city-state’s approach could become a reference point — tighter advertiser verification, more friction around unknown contacts, and clearer accountability when online services become channels for fraud.

For users, the changes may eventually mean more warnings, more verification steps and fewer unsolicited invitations. For platforms, they signal a tougher regulatory era in which trust and safety are no longer peripheral functions, but part of the licence to operate.

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Over a year ago, I received a call from someone claiming that an illegal parcel containing drugs was intercepted in my name. The call sounded so genuine that he managed to trap me on a continuous video call. Within minutes, I found myself under virtual arrest by a high-ranking officer of the “Mumbai Police.” I would need to stay on video call, hand over my banking details, and cooperate immediately, or face real, physical arrest.

For a few minutes, I was terrified. The voice was authoritative, the threats were specific, and the pressure was relentless. It is only because the caller made a procedural slip-up midway through the script that I realised something was off. I disconnected the call and blocked the number. I got lucky.

Also Read: Inside the dark economy of crypto scams: 2024’s most lucrative fraud tactics

Weeks later, my luck was tested again; this time on WhatsApp. A message arrived late in the evening from a US number, with the display picture showing the face of Mohan Belani, the CEO of e27.co, the company I work for. “Mohan” needed a favour: could I urgently purchase gift cards worth roughly US$600 (INR 50,000) and send him the codes? The tone, the urgency, even the manner of writing felt eerily familiar. But I paused, called the real Mohan Belani directly, and confirmed within minutes that no such request had been made. Scam averted, again.

I share these episodes not for sympathy, but because they illustrate something regulators in India can no longer afford to ignore: scams have industrialised, and they are coming through the exact same apps, the exact same DMs, the exact same marketplaces that hundreds of millions of Indians use every single day.

A crisis hiding in plain sight

Until recently, “digital arrest” scams were a full-blown national headache for Indian law enforcement. Victims ranged from ordinary citizens to a sitting High Court judge, with losses running into multiple millions of rupees. Investment scams, WhatsApp impersonation frauds, fake e-commerce listings and phishing calls dressed up as courier or customs “issues” have become so common that most Indians now know someone — a parent, a colleague, a friend — who has been targeted, if not defrauded outright.

And yet, unlike Singapore, India still does not have a binding, platform-specific regulatory framework that compels messaging apps, social media platforms and e-commerce marketplaces to proactively design against scams, rather than merely respond to them after users have already lost money.

What Singapore just did

The Singapore Police Force (SPF) recently issued new and updated Codes of Practice (COPs) for “designated online services,” to be complied with by January 31, 2027. The rules are notable precisely because they target platform design, not just takedown speed.

Messaging apps such as WhatsApp, Telegram, WeChat, Apple iMessage, Apple FaceTime, Google Messages and Google Meet will need to secure user consent before unknown contacts can add them to groups or channels, display contextual risk indicators for suspicious accounts, and give users tools to block or filter unknown numbers. SPF data shows messaging platforms accounted for about 23 per cent of total scam cases in Singapore in 2025, with roughly 18 per cent of government-impersonation scams occurring on WhatsApp alone.

Also Read: Phishing threats: Protecting your online shopping and banking

Social media platforms, such as Facebook, Instagram and TikTok, accounted for about 30 per cent of scam cases, with Facebook alone responsible for around 18 per cent. Under the new Social Media Code, platforms must proactively screen out ads suspected of furthering scams, verify advertisers’ identities against government records, and block financial-services ads unless the advertiser is licensed by the Monetary Authority of Singapore.

E-commerce platforms such as Carousell and Facebook Marketplace face tighter device-login consent requirements to curb account takeovers, plus the same advertising safeguards applied to social media.

Crucially, Singapore has backed these codes with real teeth: penalties of up to SGD 10 million (~US$7.83 million) per instance of non-compliance under the Online Criminal Harms Act, criminal liability for repeated breaches, and daily fines of roughly SGD 300,000 (~US$235,000) for continuing offences. Between 2024 and 2025, scam cases on designated platforms in Singapore fell by about 37 per cent — evidence that regulatory pressure on platform design actually works.

Why India needs the same medicine

India’s scam economy dwarfs Singapore’s in raw scale. We have over 850 million internet users, the largest WhatsApp user base in the world, and a booming digital payments ecosystem via UPI that scammers have learned to exploit with alarming sophistication.

Yet India’s regulatory response has largely been reactive: helplines like 1930, the Indian Cyber Crime Coordination Centre (I4C), SIM-blocking drives via the Sanchar Saathi platform, and periodic advisories from the RBI and TRAI.

These are useful, but they all operate downstream — after the scam call has already been placed, after the fraudulent ad has already run, after the fake gift-card request has already landed in someone’s WhatsApp inbox at 11 pm. What India lacks is a Singapore-style, legally binding Code of Practice that forces platforms to build friction upstream, at the point where scams originate.

Concretely, India’s Ministry of Electronics and IT (MeitY), in coordination with the Department of Telecommunications and RBI, could mandate that:

• Messaging platforms require consent before unknown numbers can add users to groups, a direct countermeasure against the “investment tips” and fake trading groups that lure victims through unsolicited WhatsApp adds.
• Platforms display verified indicators for government, police and judiciary-linked accounts or callers, specifically to blunt digital-arrest and government-impersonation scams like the one I encountered.
• Social media platforms verify advertiser identity against government ID databases before allowing financial-services or investment ads to run, closing the loophole that scammers currently exploit with impunity.
• E-commerce marketplaces tighten device-login consent to prevent account takeovers, a growing vector for fraud on Indian classifieds and resale platforms.
• Non-compliance carries meaningful financial penalties, not just advisories that platforms can quietly ignore.

The human cost is the real argument

Statistics on millions lost and per centages of scam cases matter for policymakers. But what stays with me is the an hour of genuine fear I felt believing I was under “digital arrest,” and the split-second decision that separated me from becoming another gift-card fraud statistic. Multiply that moment by hundreds of millions of Indians online, many far less digitally literate than a tech journalist who covers scams for a living, and the scale of the problem becomes obvious.

Also Read: AI phishing is turning trust into APAC cybersecurity’s weakest link

Singapore has shown that platform-level accountability, backed by real penalties, can bend the curve on scams within a single year. India’s Digital Personal Data Protection framework and IT Rules already establish that platforms operating in the country can be compelled to act.

What is missing is the specific, enforceable Code of Practice that tells WhatsApp, Meta, Google and Indian e-commerce players exactly what “acting” means — before the next call, the next ad, the next impersonation message reaches someone who isn’t as lucky as I was.

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Cryptocurrency market capitalisation expanded 7.22 per cent to reach an impressive US$2.36T. This aggressive upward trajectory stems from a rare convergence of political validation and macroeconomic liquidity injections. I view this specific rally as a definitive structural transition for digital assets. We no longer observe a speculative niche asset class reacting solely to internal industry developments.

Global capital now treats these networks as legitimate macroeconomic instruments. The undeniable 91 per cent correlation between the broader crypto sector and gold highlights this transition. Institutional and retail investors clearly position both asset classes as premier hedges against relentless currency debasement.

The 90.5 per cent correlation specifically tying Bitcoin and Ethereum to precious metals further cements this narrative. The fundamental narrative strengthens by the day, while the sheer velocity of this price action introduces severe immediate risks.

The primary ignition switch for this historic rally occurred on August 19, 2026. President Trump hosted a dedicated cryptocurrency summit at the White House and delivered a stunning policy pivot. He explicitly stated that the federal government considers purchasing large amounts of Bitcoin for the national reserve. The president also urged Congress to immediately pass the Crypto Clarity Act to establish firm regulatory boundaries.

The Commodity Futures Trading Commission confirmed active efforts to integrate decentralised platforms such as Hyperliquid into the domestic legal framework. This direct political endorsement fundamentally alters the risk calculus for institutional allocators. Regulatory uncertainty suppressed institutional capital deployment for years. The executive branch now actively courts the industry. This confidence shock immediately triggered aggressive buying across major networks.

Cautious market participants no longer fear sudden enforcement actions, and they now anticipate favourable legislative tailwinds. Lawmakers previously treated digital finance with extreme scepticism. The current administration embraces the technological innovation driving this sector.

Also Read: The Kospi enters a bull market while crypto consolidates: Where did the risk appetite go

A massive shift in domestic fiscal policy provided immense fuel for the ongoing fire. The United States Treasury announced a surprising expansion of its bond buyback programme. Officials plan to increase the size of these operations for extended securities by 100 per cent from US$2B to US$4B starting September 9. This unprecedented intervention aggressively suppresses extended borrowing costs.

The 30-year Treasury yield plummeted in response. Lower bond yields directly reduce the opportunity cost of holding non-yielding alternative vehicles. I interpret this Treasury manoeuvre as a massive liquidity injection that disproportionately benefits high-beta risk instruments. Traders view this policy shift as a clear signal of underlying fiscal stress.

The government artificially suppresses yields to manage debt burdens, and smart money flees to scarce instruments. Decentralised digital networks perfectly capture this urgent flight to absolute scarcity and verifiable monetary hardness. Fixed income markets struggle to absorb the sheer volume of new debt issuance.

This powerful, fundamental backdrop collided with extremely fragile sector positioning, creating a violent price explosion. Overconfident derivatives traders had heavily positioned their portfolios for further downside before the breaking news. The resulting short squeeze decimated bearish bets across the board. Bitcoin alone witnessed US$1.38B in liquidations over one day. Short sellers absorbed US$1.33B of that pain.

A particularly brutal cascade wiped out US$1.3B in bearish positions within one brief window when the price breached US$66,000. The Ethereum network experienced similar destruction, with over US$1.74B in crypto shorts evaporating in one day. I always warn clients about the dangers of crowded trades. Extreme leverage acts as rocket fuel during sudden shifts in sentiment. The Fear and Greed Index jumped from a fearful 41 to a neutral 55 in one session. Retail traders often pile into directional bets right before major macroeconomic announcements.

Also Read: Crypto’s new threat is not a hack, but a knock at the door

Derivatives open interest simultaneously surged 14.7 per cent to US$458.96B. This rapid leverage rebuild guarantees extreme volatility in the coming weeks. Bitcoin confidently leads the broader sector charge, posting a solid 7.26 per cent gain to reach exactly US$69,350.36.

The premier digital network now faces a critical test at the US$70,000 psychological barrier. A sustained weekly close above US$70,284 would confirm the bullish continuation. Major resistance sits at the Fibonacci extension near US$71,600. A failure to hold the US$68,000 support level risks a sharp retreat toward US$66,000.

The seven-day Relative Strength Index currently reads an extreme 92.17. Such overbought conditions rarely sustain themselves without a cooling period. A healthy pullback to test the US$2.26T total ecosystem capitalisation support would provide a vital reset. Technical analysts watch these specific price levels very closely. Algorithmic trading bots execute thousands of orders exactly at these mathematical boundaries.

The leading smart contract protocol demonstrates even more explosive relative strength today. Ethereum skyrocketed 17.13 per cent to US$2,243.84. Buyers shattered key resistance levels at US$2,000 and US$2,300 on trading volume that exploded 317 per cent. The broader arena gained 7.4 per cent, while this specific network vastly outperformed the average. I see this massive divergence as proof of immense underlying demand.

Regulated funds validate this immense buying pressure. United States Bitcoin funds absorbed US$189.3M on August 19. Ethereum funds attracted US$71.47M. BlackRock dominated inflows, securing US$64.68M for its specific product. This real capital deployment proves that traditional finance giants actively accumulate during these macroeconomic rallies.

The bullish structure remains intact but relies heavily on spot buying to absorb any new leverage entering the ecosystem. Asset managers recognise the unique utility proposition of smart contracts. These networks process global transactions without relying on traditional banking infrastructure.

Also Read: Bitcoin’s 73% correlation with gold forces investors to rethink crypto

The immediate path forward hinges entirely on upcoming macroeconomic data releases and absolutely necessary technical consolidation phases. The Federal Reserve releases its July meeting minutes later on August 19. A hawkish surprise from the central bank could easily trigger aggressive profit realisation and reverse the current momentum. A dovish reading would further support the push toward US$2,400 for the leading smart contract protocol.

I maintain a structurally bullish outlook on the digital ledger space. The combination of sovereign adoption and monetary expansion creates an unbeatable, enduring thesis. The current technical setup screams caution. The broader trading environment desperately needs time to properly digest these massive gains and absorb the newly created leverage.

Profit realisation at the US$2.5T total sector capitalisation resistance will likely cap the immediate upside. Investors must exercise extreme discipline during these euphoric market conditions. Chasing green candles often leads to poor risk management. Waiting for a confirmed retest of previous resistance levels offers a much safer entry point.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. You can also share your perspective by submitting an article, video, podcast, or infographic.

The post Bitcoin gained 7.26% to reach exactly US$69,350.36 and now faces a critical test at the US$70,000 psychological barrier appeared first on e27.

We want more startups. More research. More patents. More home-grown companies that sell to the world. We want to be the place where the next useful thing is built, not just where it is assembled, shipped, or supported.

That ambition is right. But it can distract us from a simpler problem.

Southeast Asia does not have an idea problem.

It has a follow-through problem.

Across the region, people see useful problems up close. They work around unreliable supply chains. They serve customers with tight budgets. They deal with heat, distance, traffic, paperwork, language, regulation, and waste. They notice where a machine fails, where a process slows down, and where a product does not fit the real world.

These observations are the raw material of innovation.

Yet most never become an asset. They stay as a complaint, an informal workaround, or an idea shared over lunch. They are not refined, tested, protected, built, licensed, or sold. They disappear when a person changes jobs, gets too busy, or decides that the system is not for people like them.

This is the gap that matters: the distance between an idea and something that can create value.

We celebrate the finish line and ignore the first mile

Innovation is often presented as a big reveal. A founder launches a company. A business raises money. A laboratory announces a breakthrough. A new product makes headlines.

But the most important work usually happens before any of that.

Someone has to identify a clear problem. They have to describe it well enough for another person to understand. They have to work out what is actually new, what already exists, and what could be tested first. They have to decide whether the value is best kept secret, protected, or simply put into the market quickly.

That first mile is hard because it is untidy. There is no polished pitch deck. There may not even be a prototype. There is only a person who has noticed something and is trying to decide whether it matters.

Our systems are not very good at helping them.

We are much better at supporting the people who have already made it through the first mile. They can join accelerators, approach investors, hire advisers, and enter competitions. Those things matter. But they arrive after an idea already has shape.

Also Read: Deeptech and a fracturing world: Why Southeast Asia needs a new playbook

The people we are missing are earlier. They are the factory supervisor, nurse, technician, graduate, retired engineer, logistics manager, small business owner, and frontline worker with a sharp observation but no obvious next step.

AI makes the gap more visible

AI has made it cheaper to research, write, design, and create a first draft. This is good news. A small team can now explore options that once needed a department. A graduate can organise an idea before finding a co-founder. An SME can analyse customer complaints without hiring a full research team.

But AI also makes an uncomfortable truth clearer: ideas are not the scarce part.

Anyone can produce a list of ideas in minutes. Anyone can make a presentation look convincing. Anyone can generate a product description that sounds clever.

The scarce part is judgment and follow-through.

Which problem is worth solving? Which solution is different enough to matter? Which early test would prove or disprove the idea? What part should be kept confidential? What part might be worth protecting? Which market should come first? What does the customer actually value?

AI can help ask and organise those questions. It cannot make the choices for us.

An idea becomes an asset when it creates options

Not every useful idea needs to become a venture-backed startup. Not every invention needs a patent. Those are two common ways of thinking, but they are not the only ways.

A business may improve a process and keep the details confidential as a trade secret. It may develop a technical solution and explore a patent in the markets that matter. It may protect a brand, a design, or a customer relationship. It may build a product itself, license it to a bigger partner, or use it to negotiate a stronger deal.

The point is not paperwork.

The point is optionality.

An idea becomes more valuable when its owner understands what it does, why it matters, and how to stop it from becoming a free gift to the first competitor who notices it.

Also Read: SMU launches US$10M fund to fast‑track deeptech urban sustainability startups across Asia

This is especially important for Southeast Asia. The region has deep practical knowledge, but too much of it remains trapped within individual businesses and individuals. It creates value for someone else without creating a lasting advantage for the people who saw the opportunity first.

Follow-through should be easier to learn

The region does not need every school, company, and government agency to become an invention factory. It does need to make the path less confusing.

People need simple ways to move from a vague idea to a clear problem statement. They need help learning what already exists without being buried in jargon. They need affordable ways to decide whether an idea is worth testing. They need enough understanding of trade secrets, patents, designs, and brands to know when specialist advice is needed.

This is not about replacing engineers, lawyers, researchers, or investors. It is about helping more people reach a useful conversation with them.

The same is true inside SMEs. Many businesses already have their best innovation team. It is the people who work closest to customers, machines, suppliers, and daily failures. The job is to notice that knowledge, capture it, and give it a route to become something the company can build or protect.

The regional advantage is closer than we think

Southeast Asia does not need to copy another region’s innovation story. Our advantage is not that we have the same problems as everyone else. It is that we understand problems that others often miss.

We understand fragmented markets. We understand price-sensitive customers. We understand fast-growing cities and complicated trade routes. We understand how to make something work in conditions that are less tidy than a boardroom slide.

That experience can produce valuable ideas.

But an idea is not an advantage until someone follows it through.

The future will not belong only to places that use AI well. It will belong to places that help ordinary people turn practical knowledge into something they can own, build, protect, and share with the world.

Southeast Asia already has the ideas.

The next task is making sure they do not stop there.

If you have an idea worth taking beyond the first conversation, start by brainstorming it for free at IPGuru.ai.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. You can also share your perspective by submitting an article, video, podcast, or infographic.

The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of e27.

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One of the easiest ways to misunderstand strategy is to imagine that switching costs are simply a defensive moat.

They are not.

Switching costs are better understood as borrowed power. They give a company time, tolerance, and revenue continuity that pure product preference alone may not provide. They can come from contracts, implementation effort, data migration, retraining, workflow disruption, integration complexity, or simple organisational fatigue. Research on competition in markets with switching costs has long shown that these frictions shape customer retention and future profitability because leaving one provider is not frictionless.

That sounds attractive, and often it is. But the strategic danger begins when a company stops treating switching costs as a consequence of value and starts treating them as the value.

The first mistake is thinking all switching costs are equally good

Most discussions on switching costs are strategically shallow because they treat all forms of customer stickiness as broadly equivalent. They are not.

There is a major difference between switching costs that arise from embedded value and switching costs that arise from engineered inconvenience. One creates strength. The other creates delayed weakness.

Embedded value switching costs are earned. They come from the customer having built real operating confidence around your product. Your system holds useful history. Your workflows fit how teams actually work. Your controls satisfy internal governance. Your reporting is trusted. Your people understand the customer’s environment. Your product sits inside routines that matter. Leaving would be costly because you are woven into the way work gets done.

Engineered inconvenience switching costs are weaker and more fragile. They come from proprietary formats, messy exits, contractual traps, opaque pricing, overcomplicated migration paths, or dependence that feels more like captivity than partnership. These tactics can preserve revenue in the short term, but they quietly damage the customer’s interpretation of the relationship. Once that happens, every renewal becomes emotionally thinner, every competitor conversation becomes more dangerous, and every market shift becomes a threat.

Also Read: AI agents could help Southeast Asian firms untangle cross-border payment costs

The strongest switching costs are the ones customers privately think are fair

This is where the strategy becomes more subtle.

Not all customer dependence is unhealthy. In fact, some of the best businesses in the world benefit from very high switching costs. The difference is that customers often regard those costs as a reasonable byproduct of serious adoption rather than a cynical attempt to trap them.

That distinction matters immensely.

If a customer believes leaving will be painful because your product became important, reliable, deeply integrated, and institutionally trusted, that is defensible. The switching cost is not an artificial wall. It is the residue of real value creation.

If a customer believes leaving will be painful because you made the environment hard to unwind, the cost is no longer a mark of strategic strength. It is a mark of relationship debt.

This is why fair switching costs are usually built around memory, trust, and coordination.

The more original move is to design for justified dependence

Most firms either glorify lock-in or apologise for it. Neither stance is especially intelligent.

A stronger approach is to design for justified dependence.

By that I mean building a position where the customer does become meaningfully dependent on you, but for reasons they can defend to themselves and to others. The dependence has to feel proportionate to the value, operationally sensible, and institutionally legitimate.

That usually means focusing on four kinds of value that are harder to replace than features.

• First, decision memory. A product that becomes the trusted record of why things were done a certain way is far harder to remove than one that merely executes tasks. When your system helps the organisation remember, explain, and defend decisions, you are no longer just a tool.
• Second, workflow confidence. If your product reduces hesitation between teams, shortens approval cycles, or makes handoffs less risky, then the switching cost is not only technical. It sits in the organisational rhythm itself.
• Third, governance comfort. In regulated or operationally sensitive environments, a product that legal, procurement, security, finance, and audit have already grown comfortable with is carrying a very different kind of stickiness. Replacing it means reopening institutional uncertainty, not just running a new deployment.
• Fourth, reputational safety. If choosing your company helps an internal sponsor look prudent rather than reckless, that becomes a form of dependence competitors struggle to dislodge. The customer is not only buying the product. They are buying a safer internal story.

Becoming hostage to switching costs usually begins with one internal lie

We do not need to be meaningfully better this year because the customer cannot move anyway.

Once a company starts thinking like that, even quietly, strategic decline has already begun.

The danger is not immediate collapse. It is internal miscalibration. The company stops reading the market properly because it stops needing to win cleanly. It loses sensitivity to customer frustration. It becomes less interested in usability, service quality, implementation simplicity, and product coherence. More energy goes into preserving account economics than renewing product desirability.

Over time, the firm becomes optimised for persistence, not preference.

Also Read: AI will not cut costs or grow revenue until you redesign how work gets done

You should want switching costs that rise when value rises

This is the cleanest test I know.

Good switching costs increase because the customer is getting more value. Bad switching costs increase because the customer is getting more entangled.

That difference should shape the entire design logic of the business.

If a customer uses more of your product because it becomes more useful, more central, more trusted, and more embedded in meaningful work, then rising switching costs are a healthy outcome. They reflect earned relevance.

If a customer faces higher exit pain mainly because of technical obscurity, commercial lock in, fragmented ownership, or accumulated complexity, then rising switching costs are a warning sign. They may support revenue for a period, but they also signal that your defensibility is relying too heavily on customer burden.

The strongest firms therefore do something that sounds almost counterintuitive. They make exit possible even while building deep reasons to stay.

The best companies compete on recovery cost, not just replacement cost

Here is a more original way to think about the subject.

Most firms focus on replacement cost. How expensive is it for the customer to swap one product for another?

The more interesting strategic position often lies in recovery cost. How hard would it be for the customer to recover the same operating confidence, governance comfort, decision history, and internal trust somewhere els?

That is a much richer form of leverage.

A competitor may be able to replicate your feature list and even subsidise migration. What they cannot easily replicate is the years of interpreted reliability, the embedded memory of how exceptions were handled, the quiet confidence of control functions, the trust earned in moments of stress, and the institutional habit of using your system as part of serious work.

This is why a mature strategy is not about making the customer fear leaving. It is about making the customer recognise how much confidence would need to be rebuilt elsewhere.

That is a far more defensible form of stickiness because it comes from accumulated proof, not artificial obstruction.

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For years, Southeast Asia’s startup economy has rewarded speed. Founders were expected to launch quickly, localise faster than global rivals, and chase market share across a region where digital adoption often outpaced regulation. That instinct still matters. But as artificial intelligence moves from pilot projects into banking, healthcare, government services, logistics and public infrastructure, speed is no longer enough.

A different test is emerging: trust.

Malaysia’s National AI Action Plan 2026-2030, or AI Nation 2030, makes this shift explicit. One of its core foundations is “Trust via Responsible Governance”, a signal that the country wants AI adoption to be measured not only by productivity gains or startup growth, but also by whether systems can be explained, audited and governed.

Also Read: Malaysia’s AI Nation 2030 puts cities and farms at the heart of climate resilience

For startups, this should not be read simply as another compliance burden. In the coming corporate AI market, governance may become a sales advantage. Enterprise buyers will increasingly ask not just what an AI product can do, but how it was built, what data it uses, where the risks sit, and whether those risks can be defended in front of boards, regulators and shareholders.

In other words, the next competitive edge in AI may belong to companies that can make trust operational.

From black-box tools to board-level accountability

The clearest sign of this shift is the AI-Aware Stewardship initiative under Malaysia’s AI Action Plan. The policy targets corporate boards and seeks to prepare them to oversee risks linked to AI and emerging technologies.

The targets are specific. Malaysia wants 30 per cent of large public listed companies to adopt emerging technology governance best practices by 2028, rising to 50 per cent by 2030. To move this from aspiration to practice, the Securities Commission Malaysia, Bursa Malaysia, the National AI Office, the Personal Data Protection Commission, and the Ministry of Science, Technology and Innovation are coordinating updates to the Malaysian Code on Corporate Governance and Listing Rules.

Large listed companies are expected to be encouraged to publish an Emerging Technology Governance Statement in their annual reports. They may also use maturity scorecards to show shareholders how prepared they are to manage digital and AI-related risks.

That changes the buying environment for B2B startups. A bank, telco, insurer or major retailer will find it harder to adopt a black-box AI product if it cannot explain how the system works, what safeguards are in place, or where accountability lies when something goes wrong. Procurement teams may still care about price and performance, but boards will increasingly care about audit trails.

For founders selling into large enterprises, this means the product demo is no longer enough. The due diligence file matters just as much.

The rise of audit-ready AI

One of the more demanding elements of the new framework is the push for risk mapping. Large companies will be encouraged to maintain a board-approved AI system inventory and risk assessment map, subject to internal audit review.

Also Read: Malaysia wants 300,000 AI jobs by 2030. Talent will decide if it gets there

This has direct implications for vendors. If a startup’s product sits inside a corporate AI inventory, the enterprise customer will need details about the system’s model, data, dependencies, controls and failure risks. A vendor that cannot provide these details may slow down the buyer’s approval process, or be dropped altogether.

The practical response is for startups to become audit-ready by design.

That starts with data provenance. Founders need to know where their training and operational datasets came from, how personally identifiable information was handled, whether data was licensed properly, and how usage aligns with Malaysia’s emerging data-sharing frameworks, including the Akta Perkongsian Data 2025.

It also requires model explainability. Not every AI system can be made simple, especially those built on complex machine learning methods, but startups should be able to explain how decisions are generated, what variables matter, and where human oversight is required.

Bias and safety logs will also become more important. Startups should be able to show how they test for unfair outcomes, handle edge cases, document incidents, and update models when risks appear. This is especially relevant in Southeast Asia, where AI tools often operate across multiple languages, dialects, income groups and cultural contexts. A model trained for one market may behave differently in another.

The companies that build this documentation early will have an advantage. They can plug more easily into enterprise governance processes, shorten procurement cycles, and reassure investors that the business will not collapse under regulatory scrutiny as it scales.

A risk-based route for founders

A common fear among startups is that AI regulation will favour incumbents with large legal teams. Malaysia’s plan appears to recognise this risk by proposing a hybrid, risk-based governance framework.

Under this approach, not all AI systems are treated the same. Lower-risk applications can operate under voluntary guidance, while higher-stakes uses in areas such as finance, healthcare or communications may face tighter rules overseen by sector regulators, such as Bank Negara Malaysia or the Malaysian Communications and Multimedia Commission.

This distinction matters. A startup building an AI tool for internal workflow automation should not face the same burden as one automating credit decisions or clinical recommendations. Risk-based governance, if implemented clearly, can give young companies room to innovate while giving enterprises a clearer path for adoption in sensitive sectors.

Also Read: From paddy fields to small shops, Malaysia maps an inclusive AI future

Malaysia is also introducing a National AI Classification initiative, led by the National AI Office, to certify “Made-by-Malaysia” AI systems. The certification is expected to evaluate the AI lifecycle, from compute and data layers to the final model.

For local startups, this could become more than a badge. Certified companies may gain prioritised access to the National Data Exchange, compute voucher programmes, local supply chain registries, government procurement opportunities and large corporate tenders. That would make governance a market access tool, not just a legal exercise.

Why this matters beyond Malaysia

Malaysia’s approach also sits within a broader Southeast Asian moment. Governments across the region are trying to balance AI adoption with public trust. Singapore has pushed governance through tools such as AI Verify, Indonesia and Thailand are examining digital rules through their own policy lenses, and ASEAN has been building regional guidance for responsible AI.

For startups, the regional lesson is simple: compliance designed only for one buyer or one jurisdiction will not be enough. A Malaysian startup seeking to sell across ASEAN should design internal controls that can travel. That means aligning safety, data and documentation practices with international standards and emerging regional frameworks, including the ASEAN AI Safety Network.

This is particularly important because Southeast Asian startups often scale regionally before they are fully mature internally. A company may start with a Malaysian bank, then pitch a Singaporean insurer, an Indonesian fintech, or a Philippine conglomerate. Each buyer may have different rules, but all will increasingly ask similar questions about data, accountability and risk.

Governance as a growth engine

For founders, the roadmap is becoming clearer. Start with an internal AI register that maps models, datasets, third-party APIs, security controls and human oversight points. Train engineering, product and leadership teams to understand responsible AI, not as a slogan but as part of product management. Build documentation that can withstand review by enterprise risk teams, investors and regulators.

The bigger point is cultural. AI governance should not sit only with lawyers at the end of a sales process. It needs to be built into product design, model development, customer onboarding and post-deployment monitoring.

Also Read: Malaysia’s sovereign AI bet: Local context becomes the next startup moat

Malaysia’s AI Nation 2030 plan suggests that the region’s AI market is entering a more mature phase. Startups that treat governance as paperwork may struggle. Those that treat it as infrastructure may find it opens doors.

The next wave of AI adoption in Southeast Asia will not be won by the fastest builders alone. It will be won by companies that can show their systems work, explain why they can be trusted, and prove they are ready for the scrutiny that comes with scale.

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Three months ago, I sat in a quarterly risk committee meeting at an Indonesian bank, watching a climate risk update presented in twelve slides over fifteen minutes. The presentation covered taxonomy alignment, sustainable finance commitments, and progress against the bank’s net-zero pathway. It was professional, well-researched, and accurate. It also did not mention the bank’s exposure to physical flood risk across its real estate book, the transition risk inside its coal-related loans, or the basis on which any of those risks were being priced into provisioning.

After fifteen years inside Indonesian risk functions, I have come to see that pattern as the defining shape of climate risk inside the region’s banking sector. The reporting infrastructure has matured rapidly. The provisioning infrastructure underneath has not. The gap between what banks disclose about climate and what their balance sheets actually carry has become the most consequential unpriced exposure in ASEAN banking.

The framework that was built

Indonesia’s OJK has, over the past three years, built one of the more thoughtful climate risk frameworks in ASEAN. The Sustainable Finance Roadmap, the green taxonomy, the climate disclosure requirements, the architecture is in place, and Singapore, Malaysia, and the Philippines have moved in parallel. Most major banks now publish annual climate disclosures, often aligned to TCFD recommendations. The disclosures are real work. They are not the same thing as risk management.

Where the exposure actually sits

Three categories of climate exposure inside Indonesian bank balance sheets are visible enough to name and large enough to matter.

Physical climate risk in property and infrastructure. A significant share of commercial real estate financing sits in coastal cities exposed to subsidence, tidal flooding, and increasingly severe wet-season rainfall. The collateral underlying these loans is rarely revalued against forward-looking climate scenarios. The provisioning logic assumes the asset retains its current value. The asset, increasingly, does not.

Transition risk in carbon-intensive sectors. Loans extended to coal, palm oil, and heavy industrial sectors carry exposure to a rapidly evolving regulatory environment, domestic carbon pricing, the European Union’s deforestation regulation, and sector-specific phase-out commitments. The credit framework that priced these loans five years ago did not anticipate that some underlying assets could become stranded inside the loan tenor.

Also Read: Indonesia’s AI hiring gap is real, just not 28×

Cascading climate risk in adjacent sectors. The most under-discussed exposure is not the direct one. It is the credit risk inside borrowers whose own portfolios, supply chains, or customer bases are climate-exposed. A logistics company is not a climate-exposed borrower in the conventional sense. A logistics company whose largest customer is a flood-prone factory is.

Why the framework misses it

The disclosure architecture and the provisioning architecture were built for different purposes, and they have not been reconciled.

Disclosure frameworks make the institution’s climate position legible to external stakeholders. They are not designed to drive loan-level loss provisioning, capital adequacy, or pricing inside the bank.

Provisioning frameworks were built before climate was on the regulatory radar. The expected credit loss model accommodates forward-looking information in principle, but most banks still apply it with historical loss data and short-horizon scenarios. Climate risk operates on a longer horizon than the provisioning logic was built for.

What is starting to work

A few institutions are beginning to close the gap.

Climate-adjusted credit reviews. Some banks now incorporate climate scenarios into credit committee processes for large or long-dated exposures. The discipline of forcing the question into the same room as the lending decision is producing more honest pricing.

Sector concentration limits with climate triggers. Some institutions set internal limits on exposure to high transition-risk sectors and lower those limits as policy clarity improves. The mechanism is imperfect. It is the closest thing to a working transition risk control I have seen in the region.

Also Read: How to get beyond the chatbot and boost your AI productivity

Collateral revaluation under climate scenarios. The most rigorous response I have seen comes from institutions revaluing real estate collateral under multiple climate trajectories, not just the central case. The revaluation rarely changes a single loan’s status. It consistently changes the capital the bank holds against the portfolio.

What needs to happen

Three moves would meaningfully reduce systemic exposure.

Connect disclosure to provisioning. The climate analyses that flow into TCFD-style reports should also flow into expected credit loss calculations, capital planning, and pricing. The reports and the reserves should be telling the same story.

Require forward-looking collateral valuation for long-dated exposures. Where loan tenors extend across plausible climate horizons, the collateral assumption should be tested against those horizons rather than against present-day comparables.

Bring transition risk into supervisory stress testing. ASEAN supervisors already run credit, liquidity, and market stress tests. They should be running transition stress tests, modelling specific policy scenarios across carbon-intensive sectors and measuring portfolio capital impact.

The macro stakes

Indonesia is among the most climate-exposed major economies in the world, with a banking sector whose stability matters regionally. The disclosure architecture the country has built is genuinely good. The provisioning architecture has not caught up.

The climate risk inside Indonesian bank portfolios is not theoretical. It sits on balance sheets now, accruing exposure that is not being priced, against scenarios the institutions’ own disclosures already say are coming. The bill, when it arrives, will not be paid by the disclosure framework. It will be paid by the capital base. The window to close that gap is closing.

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Singapore’s fight against scams is moving deeper into the messaging apps people use every day, after police disrupted more than 30,000 Apple iMessage accounts linked to a campaign that has already caused about SGD2.2 million (US$1.7 million) in losses.

The Singapore Police Force said its Cyber Command has been detecting and disabling accounts tied to the scam since June 2026. The loss figure has climbed quickly: on August 5, police had put the damage at SGD1.2 million (~US$940,000). In other words, reported losses rose by nearly US$800,000 in a matter of weeks.

Also Read: Almost got “digitally arrested.” India needs Singapore’s playbook before the next scam call

The case underlines a problem that is becoming familiar across Southeast Asia: scammers are not relying only on old-fashioned SMS blasts or suspicious phone calls. They are moving across encrypted messaging apps, social platforms, marketplaces and ad networks, looking for whichever channel has the least friction and the most trust.

In this campaign, fraudsters sent iMessages pretending to be courier companies such as NinjaVan, J&T Express and SPX Express, as well as government agencies and financial institutions. The messages directed recipients to spoofed websites designed to look like the real thing. Victims were then asked to make a small payment or settle a fine, often by entering card or banking details.

The amounts requested may have seemed minor, but the information handed over was valuable. According to police, some victims who entered one-time passwords later discovered that their cards had been added to mobile wallets, bank security tokens had been registered on unfamiliar devices, or their accounts had been accessed without permission. Many only realised what had happened after seeing unauthorised transactions.

Why iMessage is a harder target

The campaign also exposes a regulatory and technical gap. In Singapore, SMS scams have been targeted through network-level filters and a sender ID registry, which helps prevent fraudsters from impersonating trusted organisations through text message headers.

Also Read: Phishing threats: Protecting your online shopping and banking

But iMessage runs on Apple’s own system, outside the traditional telecoms layer. That means it is not covered by the same filters and registry used for SMS. For a scammer, that difference matters. A message delivered in Apple’s blue bubble can appear familiar and personal, especially to users who do not think of iMessage as a risky channel.

Police stressed that government agencies and courier companies do not use iMessage to communicate with the public. That simple point is important because many delivery-related scams rely on timing and plausibility. In a city where online shopping, food delivery and parcel tracking are part of daily life, a message about a failed delivery or unpaid fee can feel routine enough to click.

Singapore is not alone in facing this shift. Across Southeast Asia, fraud groups have become more sophisticated in blending social engineering with real consumer habits. Delivery scams, fake toll or tax notices, investment fraud and phishing links often travel through the same apps people use to speak with family, sellers, banks and colleagues. The more commerce moves into chat, the more attractive these channels become.

New codes put pressure on platforms

The iMessage disruption comes shortly after Singapore issued new Codes of Practice under the Online Criminal Harms Act. Announced on August 17, the codes apply to seven services assessed as posing the highest scam risk: WhatsApp, Telegram, WeChat, Apple iMessage, Apple FaceTime, Google Message and Google Meet.

The services must comply by January 31, 2027, with anti-impersonation measures due earlier, by September 30, 2026.

Also Read: Inside the dark economy of crypto scams: 2024’s most lucrative fraud tactics

Messaging platforms are a major part of the scam landscape. Police said services such as WhatsApp and Telegram accounted for about 23 per cent of scam cases in 2025. That figure is significant because messaging apps are no longer just communications tools. They are customer service channels, sales channels, community spaces and, increasingly, the first point of contact between businesses and users.

For regulators, the challenge is to impose safeguards without breaking the usefulness of these platforms. Identity checks, faster takedowns and impersonation controls may help, but scammers adapt quickly. If one route becomes harder, they often move to another, whether that is an ad, a marketplace listing, a fake account or a compromised device.

This is why Singapore’s approach is widening beyond a single channel. Earlier in the week, police announced a separate Social Media Code covering Facebook, Instagram and TikTok. Together, the three platforms accounted for about 30 per cent of scam cases in 2025, with Facebook alone making up about 18 per cent.

The Social Media Code focuses on scam advertisements, a common gateway for fraud. Platforms will be required to block and promptly remove suspected scam ads, verify advertisers’ identities against government records, and prevent advertisements offering financial products or services unless the advertiser is licensed by the Monetary Authority of Singapore.

That last requirement is particularly relevant in a region where fake investment schemes remain a persistent threat. Scammers often use paid ads to create the impression of legitimacy, sometimes borrowing the faces of public figures, media brands or financial institutions. By the time an ad is reported and removed, victims may already have been funnelled into private chats or fraudulent websites.

Marketplaces also under scrutiny

Singapore is also tightening rules for e-commerce platforms. An enhanced E-Commerce Code covering Carousell, Facebook Marketplace and Facebook Business Pages will introduce stronger controls on logins from unrecognised devices.

Marketplaces have long been vulnerable because they combine informal peer-to-peer transactions with a high volume of listings. Scams can range from fake concert tickets and rental listings to non-delivery of goods and phishing links disguised as payment or delivery pages. Stronger login controls may help limit account takeovers, where criminals use legitimate-looking profiles to trick buyers or sellers.

Also Read: AI phishing is turning trust into APAC cybersecurity’s weakest link

Police said scam cases on services already covered by earlier codes fell by about 37 per cent between 2024 and 2025. That suggests platform rules can have an impact, although the latest iMessage case also shows that fraudsters keep searching for gaps.

The stakes are set to rise further. The government has proposed increasing the maximum penalty for non-compliance to S$10 million (US$7.8 million) per breach. More details are expected when the Scams (Countermeasures) and Other Matters Bill is debated in Parliament in September.

For startups and digital platforms in Southeast Asia, Singapore’s direction of travel is worth watching. The city-state often acts as a regulatory reference point for the region, especially in fintech, digital identity and online safety. Measures introduced there can influence how other markets think about platform responsibility.

For consumers, however, the immediate lesson is more basic: the channel does not guarantee the sender. A message arriving through iMessage, WhatsApp, Telegram, Facebook or TikTok may still lead to the same spoofed payment page. In the current scam economy, trust is no longer attached to the app. It has to be earned at every click.

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J&T Global Express has delivered the kind of first-half numbers that usually make public-market investors sit up.

The Hong Kong-listed logistics company reported revenue of US$7.67 billion for the first half of 2026, up 39.5 per cent year-on-year, while express delivery revenue rose 39.6 per cent to US$7.46 billion. Adjusted net profit more than doubled to US$350.6 million, and adjusted EBIT climbed 121.7 per cent to US$433.6 million.

The headline story is clear enough: J&T is still expanding quickly, still riding the growth of e-commerce, and now important enough to have joined the Hang Seng Index in June. For Southeast Asia, where the company has held the largest express delivery market share for six consecutive years, its performance also speaks to the region’s growing weight inside global logistics.

Also Read: More parcels, less profit: Logistics’ big squeeze

But beneath the strong top-line figures, J&T’s interim results tell a more complicated story. Its fastest growth is no longer coming from China, the company’s largest market by parcel volume. Its improvement in revenue per parcel appears to be driven partly by a shift in geographic mix rather than clear pricing power. And its enlarged HK$2 billion (~US$255 million) share repurchase programme raises questions about how the company is balancing investor returns against long-term network investment.

China is still huge, but growth is slowing

J&T handled 17.50 billion parcels globally in the first half, up 25.1 per cent from a year earlier. Yet that growth was far from evenly spread.

China remained the group’s biggest market by some distance, contributing 11.62 billion parcels, or about two-thirds of total volume. But parcel volume in China grew only 9.6 per cent year-on-year. That is modest compared with the company’s performance elsewhere: Southeast Asia parcel volume jumped 71.2 per cent to 5.52 billion, while “other markets”, mainly Latin America and the Middle East, rose 119.9 per cent to 365 million parcels.

The gap matters because China has long been the world’s most competitive express delivery market. Years of price wars among players such as SF Express, ZTO Express, YTO Express and others have pushed down delivery tariffs and made scale essential. J&T’s market share in China did edge up by 0.5 percentage points to 11.6 per cent, but the single-digit volume growth suggests the company may be bumping into a tougher ceiling in its largest market.

Management has framed this as a move towards better-quality growth. Group Vice President Charles Hou said J&T remains focused on “strengthening operating quality and efficiency”. That is a reasonable priority in a low-margin business. Still, for investors and regional operators, the question is whether China is becoming a cash-heavy but slower-growth base while Southeast Asia and newer markets are asked to carry the expansion story.

The revenue-per-parcel question

One of the more striking parts of J&T’s results is that revenue grew much faster than parcel volume. Overall revenue rose 39.5 per cent, while parcel volume increased 25.1 per cent. On a simple calculation, the company’s average revenue per parcel increased from about US$0.393 in the first half of 2025 to US$0.438 in the first half of 2026.

At first glance, that looks like stronger pricing power. For a logistics company, being able to earn more per parcel while still growing volume is a strong signal. But in J&T’s case, the explanation may be more about geography.

In the first half of 2025, China accounted for roughly three-quarters of J&T’s parcels. By the first half of 2026, its share had fallen to 66.37 per cent. Southeast Asia’s share, meanwhile, rose from 23.05 per cent to 31.54 per cent. Because delivery rates in Southeast Asia and other emerging markets are generally higher than in China’s fiercely competitive domestic market, a larger share of non-China parcels can lift group average revenue per parcel even without a major pricing breakthrough.

Also Read: The rise of logistics startups in Southeast Asia: How AI powers supply-chain revolution

This does not make the improvement meaningless. A healthier geographic mix can support margins, and Southeast Asia’s e-commerce market still has room to grow as online shopping penetrates smaller cities and cross-border sellers seek faster fulfilment. But it does mean the ARPU gain should be read with care. If Southeast Asian markets become more crowded, or if platform-owned logistics arms intensify competition, J&T may face the same pressure on delivery fees that has shaped China’s market.

Southeast Asia is the prize and the battleground

J&T’s Southeast Asian performance remains its strongest argument. The region delivered 5.52 billion parcels in the first half, helped by rising e-commerce adoption, social commerce, and the demand for low-cost delivery across archipelagic and emerging markets such as Indonesia, the Philippines and Vietnam.

The company has also built a dense regional network, including 127 sorting centres in Southeast Asia. That infrastructure is hard to replicate quickly and gives J&T an advantage in markets where delivery reliability can determine whether consumers continue buying online.

But it is not alone. In Southeast Asia, J&T competes with Ninja Van, Flash Express, SPX Express, Lazada Logistics, DHL eCommerce and country-specific postal and courier players. Some rivals are backed by major e-commerce platforms, giving them captive parcel flows. Others are pushing aggressively into small merchants and cash-on-delivery-heavy markets. Globally, J&T’s expansion into Latin America and the Middle East also puts it closer to established logistics groups and regional specialists with deep local networks.

That competitive backdrop makes capital allocation especially important.

A large buyback at a sensitive moment

J&T said it had completed the repurchase of 99.32 million shares and increased the size of its share repurchase plan to US$256.4 million. The company also reported total cash resources of US$2.91 billion, giving it financial room to manoeuvre.

Buybacks are not inherently problematic. They can signal management confidence, improve earnings per share, and return excess cash to shareholders. But for a logistics company still expanding across multiple regions, a repurchase plan of this size deserves scrutiny. The US$256.4 million programme is equivalent to about 73 per cent of the company’s adjusted net profit for the half-year.

The timing is also notable. J&T’s inclusion in the Hang Seng Index brings greater visibility, but also greater pressure from institutional investors and index-tracking funds. A buyback can help support market confidence during that transition. The trade-off is that every dollar used to repurchase shares is a dollar not used to strengthen sorting centres, last-mile capacity, automation, fleet efficiency, or market entry in expensive new geographies.

There is another layer to the numbers. J&T’s announcement highlights adjusted net profit, adjusted EBIT and adjusted EBIT per parcel, but does not foreground statutory net income in the same way. Adjusted metrics are useful for understanding operating performance, especially in businesses affected by non-cash charges or one-off items. Still, investors need the unadjusted picture too, because costs excluded from adjusted earnings can remain economically real.

J&T also promoted a milestone in the second quarter: global average daily parcel volume exceeded 100 million for the first time. That is operationally significant. Yet across the full first half, 17.50 billion parcels over 181 days works out to about 96.7 million parcels a day. The company is clearly operating at immense scale, but the distinction shows how selective framing can make performance appear cleaner than it is.

Also Read: Lazada unveils US$100M affiliate push to power creator-led growth in SEA

For Southeast Asia, the lesson is not that J&T is weakening. It remains a formidable logistics player with regional scale that few competitors can match. The more important point is that its future growth story now depends heavily on this region continuing to expand profitably.

If China keeps slowing and Southeast Asia absorbs more of the growth burden, J&T will have to prove that its regional dominance can translate into durable margins — not just higher group averages created by geographic mix. Its first-half results are impressive. They are also a reminder that in logistics, scale is only half the story. The harder test is whether that scale keeps producing real profits once the easy volume growth fades.

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