Why isn't there an Asian Google?

New Economist report details why Asia trails the West when it comes to internet giants

Looking at the statistics Asia seems like the natural home of the internet. It has nearly 50% of the world’s internet users and accounts for nearly one third of the global e-commerce market; the fastest broadband speeds in the world are based in Asia (one list places the top three countries as Hong Kong, South Korea, and Japan), and it has the quickest growth in mobile broadband of any region worldwide.

Despite all this, how many Asian internet companies can you name? Where is the Asian Google or Amazon, jostling its Western competitors for market share in Europe and the US? Although hardware companies from the region have been making strides recently the Eastern equivalents of the likes of eBay and Facebook – and they do exist - have barely any presence here at all. Why is this?

A new report commissioned by the Asia Internet Coalition and written by the Economist Intelligence Unit (an independent and specialised consultancy service within the Economist Group) has set out to answer these questions, finding out why “Asia’s internet businesses seem to punch below the region’s weight on the global stage.”

Many companies have only recently begun to care

For many companies it seems that globalisation has not been on the agenda until recently, with Japan’s e-commerce giant Rakuten for example, only attempting to reach global markets recently. Its first overseas acquisition was only in 2005 (a US affiliate marketing company) and in 2010 it made English its official corporate language.

Other Asian businesses simply prefer to focus on domestic markets. Looking at the likes of Baidu, QQ, and Taobao it’s easy to see why. All three are Chinese language sites aimed at their home market and yet even without global reach manage all three are in the top ten most popular websites in the world.

And expanding globally comes with its own challenges – language being the main difficulty, not only in terms of the spoken but also the coded; there are also the challenges of “unique cultures, technology preferences, business environments and e-business infrastructures” to contend with, the authors write. 

A 'digital divide' in the region means potential markets are suppressed

Asia also faces greater challenges in the shape of the “digital divide” between the north and south of the region. Monetization for internet companies is often based on the willingness of markets to pay for intangible goods – be these online services or advertising – something that is far more difficult in developing countries.

Whereas companies in Japan and South Korea can rely on these ‘intangibles’ (the OTT messaging service Line for example bases a large chunk of its revenue on the sale of detailed emoticons known as ‘stickers’), other nations are not so lucky.

Whilst the likes of Indonesia and Vietnam have large and young populations which seem a ripe market for internet products, the paper describes these countries’ users as “accustomed to downloading content for free” with possible profits also eroded by “piracy or unauthorised distribution”.

It doesn’t help that many countries in the region are essentially cash-economies, hobbling online payments before they’ve even taken off. Credit card penetration in China, Thailand, India, Vietnam and Indonesia is less than 10%, whilst those that are able to use cards online often don’t out of fear of fraud. The paper gives the example of Indonensia, where “fraud is the reason that one-third of internet users did not shop online last year.”

Borders - physical and cultural - keep countries apart

Other borders to international growth are just that – borders. Some countries find that the talent they need has already travelled abroad and is safely settled overseas; others find it difficult to attract Western workers away from the benefits of home.

The authors of the report also cite “entrenched conservatism among Asian graduates”, with the cultural kudos of the start-up culture – a sort of rugged individualism that seems ubiquitous in the West – has yet to find favour in Asian societies.

Collaboration is also cited as problems, both domestically and internationally. Asian markets are only recently beginning to accept the need for sharing information with industry peers, and forming alliances to gain wider access to the market.

Conclusion:

In conclusion the Economist’s report is tacitly optimistic for the region – especially considering the ease with which internet start-ups can find global audiences and the potential user-base of the region.

However, it does stress the need for clear legislation for Internet companies; one that “creates a solid foundation for Internet companies and builds consumer confidence in online channels" and that strengthens the legitimacy of online payment infrastructures.

Growth in the industry could only benefit the region, but the unasked (and less comfortable) question is whether such success would end up damaging Western businesses. On the other hand, we might welcome the competition.

A recent op-ed for Salon asked the question 'Who will stop Google?', describing the company as becoming too autocratic and too self-regarding to really serve any public good. Maybe a challenge from the east would do us all some good.

Arts and Entertainment
The cast of The Big Bang Theory in a still from the show
tvBig Bang Theory filming delayed by contract dispute over actors' pay
Sport
England celebrate a wicket for Moeen Ali
sportMoeen Ali stars with five wickets as Cook's men level India series
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
News
Robyn Lawley
people
PROMOTED VIDEO
Life and Style
ebookA wonderful selection of salads, starters and mains featuring venison, grouse and other game
News
people
News
people
News
i100  ... he was into holy war way before it was on trend
Life and Style
lifeDon't get caught up on climaxing
Life and Style
food + drinkVegetarians enjoy food as much as anyone else, writes Susan Elkin
Arts and Entertainment
Harry Potter (Daniel Radcliffe), Hermione Granger (Emma Watson) and Ron Weasley (Rupert Grint)
newsBloomsbury unveils new covers for JK Rowling's wizarding series
News
scienceScientists try to explain the moon's funny shape
Sport
Usain Bolt confirms he will run in both the heats and the finals of the men's relay at the Commonwealth Games
commonwealth games
News
peopleHowards' Way actress, and former mistress of Jeffrey Archer, was 60
Life and Style
Troy Baker and Ashley Johnson voice the show’s heroes
gamingOnce stilted and melodramatic, Hollywood is giving acting in video games a makeover
News
i100
Arts and Entertainment
As Loki in The Avengers (2012)
filmRead Tom Hiddleston's email to Joss Whedon on prospect of playing Loki
Voices
voices In defence of the charcoal-furred feline, by Felicity Morse
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Senior IT Trainer - Buckinghamshire - £250 - £350 p/d

    £200 - £300 per day: Ashdown Group: IT Trainer - Marlow, Buckinghamshire - £25...

    SAP FICO SOLUTION ANALYST

    £55000 - £65000 per annum + Benefits: Progressive Recruitment: SAP FICO SOLUTI...

    Data Analyst

    £30000 per annum: Ashdown Group: A highly reputable software house is looking ...

    SAP PROJECT MANAGER

    £60000 - £70000 per annum + Benefits: Progressive Recruitment: SAP PROJECT MAN...

    Day In a Page

    Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

    The day America’s love of backyard tigers led to a horrific bloodbath

    With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
    Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

    How Samuel Beckett became a French Resistance spy

    As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
    We will remember them: relatives still honour those who fought in the Great War

    We will remember them

    Relatives still honour those who fought in the Great War
    Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

    Kodak's last-ditch bid to keep celluloid alive

    Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
    Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

    Acting in video games gets a makeover

    David Crookes meets two of the genre's most popular voices
    Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

    Could smartphones soon be diagnosing diseases?

    Health Kit and Google Fit have been described as "the beginning of a health revolution"
    Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

    Can we learn to love Ryanair again?

    Four recent travellers give their verdicts on the carrier's improved customer service
    Billionaire founder of Spanx launches range of jeans that offers

    Spanx launches range of jeans

    The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
    10 best over-ear headphones

    Aural pleasure: 10 best over-ear headphones

    Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
    Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

    Commonwealth Games

    David Millar ready to serve up gold for his beloved Scotland in the end
    UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

    UCI Mountain Bike World Cup

    Downhill all the way to the top for the Atherton siblings
    Save the tiger: The animals bred for bones on China’s tiger farms

    The animals bred for bones on China’s tiger farms

    The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
    A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

    A former custard factory, a Midlands bog and a Leeds cemetery

    Introducing the top 50 hidden spots in Britain
    Ebola epidemic: Plagued by fear

    Ebola epidemic: Plagued by fear

    How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
    Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

    From 'Parks and Recreation' to 'Guardians of the Galaxy'

    He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star