Frontier markets in Asia ripe for Internet entrepreneurship

Entrepreneurs thinking of establishing startups in a region with a promising future should look no further than Asia’s frontier market nations, Rocket Internet co-CEO Koen Thijssen said March 7 at the MIT Asia Business Conference.

Thijssen, who heads Rocket’s Asia Pacific Internet Group, characterized these nations—Bangladesh, Cambodia, Laos, Myanmar, Nepal, and Pakistan—as “diamonds in the rough” that are home to some 450 million people, many of whom are not yet online. But he pointed out that mobile phone use in those countries is expanding rapidly and that Internet connectivity there is only a matter of time.

“It’s not a question of if it’s going to happen,” he said. “It’s a question of when it’s going to happen. The most fundamental verticals of the Internet are still available here; there’s still not a dominant Amazon or a dominant [Chinese e-commerce company] Alibaba in these markets. These models can still be brought to these markets and we are actively doing so.”

Thijssen’s address capped the day-long event, which attracted some 500 people. According to event co-chair Seungmin Baek, MBA ’15, they ranged from MIT students and faculty to Asian consul generals from the northeastern United States.

Asia Business Conference co-chairs Zichao Du and Seungmin Baek, both MBA ’15

“This is a very unique and rare event that embraces and brings together many different demographics within the theme of innovation, technology, and finance—the areas where MIT is strong,” he said.

The conference’s theme of “Demystifying Business Practices in Asia,” is what Thijssen strove for in his presentation.

Establishing a startup in Asia’s frontier nations, he said, is a matter of buying a plane ticket and going there to set up an office and team.

“You have to actually like this kind of adventure,” he said. “You have to like rolling up your sleeves, getting in the dirt and building up a company actively. It’s not run by sitting behind a desk; it’s being out there in the field. That’s how you build the company and that’s how you win.”

By identifying and building proven Internet business models in underserved markets, Rocket Internet’s stated goal is to be the world’s biggest Internet platform outside the United States and China.

“We look at the world at large; we look at what’s happening in our environment, and we identify new business models, Thijssen said. “Then we analyze these business models and we replicate them.”

The companies within the Asia Pacific Internet Group do have a familiar ring. Easy Taxi is a taxi-booking app that resembles Uber and operates in nine countries; Pricepanda is a price comparison website that serves five countries.

While Internet connectivity is limited in these countries, Thijssen predicted that 100 hundred million more people in the region will be online within five years.

“The competition is still relatively limited,” he said. “That’s why, in these markets, you can bring more established models of the Internet.”

He encouraged the audience to think seriously about following Rocket Internet’s lead in setting up shop in those countries.

“The question you should be asking yourself is not whether these markets will succeed, because that’s a matter of time,” he said. “The question you should be asking yourself is whether you want to seize this opportunity that is absolutely there or do you prefer to read about it in a case study in five years’ time on how the new Alibaba was built in Myanmar in 2015?”