Asian tech companies ahead of US rivals in redefining traditional business models, investor says

Asian technology start-ups have shown that they are better able to “reimagine” traditional businesses than their US rivals and are quicker to become mainstream players by moving into offline areas, according to a leading investor in nascent firms.

Shailendra Singh, managing director for Sequoia Capital India, told the annual Credit Suisse Asian Investment Conference in Hong Kong that Asia firms also benefited from not facing as much competition from incumbents as their counterparts have in the US.

“In the US, you have so many strong incumbents in every industry … in Asia, especially in China, the incumbents are not strong. Hence, tech companies have a chance to reimagine the business and compete head on (with the incumbents),” he said.

He said that so far the only comparable example in the US has been Amazon’s US$13.7 billion takeover of Whole Foods last year, which was seen as a disruptive force in grocery retailing, introducing changes in areas such as delivery and distribution, pricing, and adding new sections to sell electronic gadgets.

Singh noted that in Asia, examples included Indian budget hotel booking start-up Oyo Rooms, which has reimagined the operating models of budget hotels and has since taken that know-how to China’s budget hotel market. Oyo Rooms is backed by Sequoia Capital and Japanese tech firm Softbank.

Indian video learning app Byju’s has also demonstrated its ability to develop a successful education business, partially modelling it on streaming media player Netflix’s subscription system and offering proprietary educational content.