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// By Drew Bernstein, CPA
Southeast asia’s digital goldrush For the past two decades, China has presented a unique opportunity for emerging market investing at scale.
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his is in large part due to its massive population, growing middle class, and a high rate of digital services adoption. Early investors in companies such as Alibaba, Tencent, and JD.com made fortunes as they leveraged their access to global capital markets to become digital goliaths dominating online shopping, entertainment, payments and woven into Chinese consumers’ daily lives. But tighter regulation over overseas listings have many investors asking, “What is the next China-like opportunity?” While no country can match the impact that China has had on the global economy, I believe Southeast Asia will be the next frontier. It will become a major focus of investor attention and new public company listings over the coming decade.
In fact, MarcumBP is actively working to expand into Singapore - with more updates to come. We already employ nearly 200 staff, the vast majority of which are in Asia. As early entrants in China, MarcumBP has been at the forefront of the intersection of the U.S. and Asia markets for 20 years. Now, we are eying Southeast Asia as we expand in line with the opportunities for high growth emerging companies. What is driving the emergence of Southeast Asia? 1.
Favorable Demographics – If “demography is destiny,” then the center of energy in Asia will be shifting southwards as North Asia’s industrial powerhouses of China, Japan, and Korea all begin to experience dramatic declines in their working-age populations and overall population. Southeast Asia has a population of 589 million, with 274 million in Indonesia, 110 million in the Philippines, and 97 million in Vietnam, with significantly lower labor costs than other Asian
18 MicroCap Review Magazine
economies. The region’s median age is 30 years old, and 50% of Southeast Asia’s population lives in urban areas, which will provide additional impetus to growth as urbanization continues. This large, relatively young labor base makes many countries attractive to Western enterprises seeking to build resilience into their global supply chains and mitigate the risks of the growing rivalry between China and the U.S. While the region has an enormous dispersion of incomes, ranging from GDP per capita of $60,000 in Singapore to under $3,000 in Vietnam, there is a growing middle class with a ravenous appetite for consumer goods and services. This transition from subsistence to an urbanized middle class with disposable income is a powerful catalyst for economic growth. 2. Rapid Digital Adoption – Increasingly, Southeast Asia’s consumers are turning to digital platforms to satisfy their needs. A recent report put out by Google, Temasek, and Bain Consulting entitled
www.SNN.Network
