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Riding the region's mobile revolution

The proliferation of cheaper and powerful smartphones in S-E Asia presents good opportunities to companies

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Traditional businesses can boost demand for their goods and services exponentially via the online marketplace, especially in nations with a vast geography and where marketing may be expensive, says Mr Ramawy.

THE rapid growth of faster networks and cheaper smartphones has led to many traditional businesses in Southeast Asia jumping on the mobile digital bandwagon, according to one of the region's top venture capitalists.

"For traditional businesses in South-east Asia, merchants that sell goods and services have an opportunity to increase their demand exponentially as they go onto an online marketplace, especially in countries with a vast geography where marketing and communications may be expensive," says Rudy Ramawy, managing partner of venture capital firm Venturra Capital and a former country director at Google Indonesia. He was speaking at the recent Credit Suisse Global Megatrends Conference 2016.

He cites the example of Kaodim, a Malaysian company that his firm has funded, which provides an online marketplace for traditional services such as cleaning, construction and gardening.

He notes that South-east Asia is home to the world's largest youth population, with many among them already using mobile phones even before the Internet became pervasive.

Combine the easy access to cheaper and more powerful mobile phones with more varied financing options and the opportunities to market to consumers through these digital devices become enormous.

"In Indonesia, in a small second or third-tier town, a person is able to pay for a cheap smartphone in instalments," says Mr Ramawy, who is also the vice-chairman of Mataharimall.com, one of the leading online marketplaces in Indonesia.

Mobile operators in Indonesia are also racing to build high-speed mobile networks. Coverage of the latest 4G networks in the country stands at around 30 per cent, but this is expected to double in a few years.

"These factors fuel the democratisation of technology to the masses in Indonesia via the mobile ecosystem. It is putting supercomputers very cheaply and accessibly in the hands of the masses," Mr Ramawy says.

All these developments are taking place even as many countries in South-east Asia struggle with inefficiencies in many aspects of their economy - from the distribution of goods and services and transportation to the matching of demand and supply.

"We are growing at a time when there are a lot of pain points that technology can solve. Herein lies the opportunity," says Mr Ramawy.

"So there is this interesting trend of traditional companies embracing technology. All this is possible because there is significant growth in terms of the number of tech startup founders who are local to their markets and who have lived through the pain points and know exactly what problems technology can solve."