With Christmas and New Year Eve just behind us, 2017 is now here. After witnessing some successful exit stories in 2016, it’s a great time to see the trends that may shape how 2017 may look like.
We expect sentiment in the Asia startup space to remain bullish and robust, but not for all industries. With that in mind, we would like to highlight some broad themes for 2017 in Asia that Oddup has identified to play out this next year:
Artificial intelligence (AI) – Chatbot + Virtual Assistants
Oddup believes that machine learning and other variations of artificial intelligence (AI) are expected to proliferate in the enterprise in 2017. More corporates will plan to leverage on AI to better utilize their existing resources and consumer base. Among different applications of AI, we believe that Natural Language Processing (NLP) based Chatbot and Virtual Assistants (both NLP and Voice Recognition technology) will hit the market in 2017 with startups focusing on Chatbot development and technology giants on overall and all-rounded Virtual Assistants. We expect to see more AI related development in less regulated industries like retails and consumer ecommerce sectors first in 2017.
Blockchain Technology – It will be everywhere
Many people will think of Fintech whenever they talk about Blockchain, as it is the technology behind Bitcoin, the most popular digital currency. However, Blockchain is a technology applicable to nearly every industry which requires a secured database. In 2017, Oddup believes that Finance is still the key industry for Blockchain application with inter-bank payment and cross-border transaction as focus area (development led by Singapore). Meanwhile, we also expect Blockchain applications in other industries to explode in 2017, starting from logistic (supply chain & inventory management) and real estate industries.
Virtual Reality (VR) – 2017 could be the perfect year to tap in
VR is not new and it first hit the headlines in the 1990s when video games companies like Nintendo tried to sell VR products to the public. Back then, the technology wasn’t ready and now it is back. Hardware-wise, in 2017, we expect to see more new VR devices and the market may go into a stage where users will continue to see enhanced version from time to time, like what we have gone through for mobile phone in the last decade. In terms of software, we believe the key focus will still be entertainment field while there will be more investment focus and software development on applications on other area, aiming to be best-positioned by the time hardware development is 100% mature.
Augmented Reality (AR) – better shopping experience in 2017
Besides VR, Augmented reality (AR) is another technology that will explode in 2017 after the successful hit of Pokémon Go in 2016. Oddup expects to see more AR based mobile games coming to the market in 2017. Moreover, we believe there will be more and faster applications in other industries due to the nature of the technology. Ecommerce and retail business are likely to the one which rapidly apply the technology as AR can help improve shopping experience. Example? Let’s image you can tell how a new rose-gold watch look like on your hand before buying it online; or how the blue new sofa fit in your new apartment buy you order. Some of them are ready there and we will see more in 2017.
Education + Technology
In 2017, after a few years of technology and startup promotion (partly driven by different governments), we believe Edtech development will accelerate underpinned by a more mature ecosystem in Asia and school are finally more open to new technology too. In our view, we believe the product that will really hit this industry should be those can facilitate in-classroom learning like video-based learning devices which allow large scale learning or gamification applications which improve in-classroom learning experience. Meanwhile, we also see a trend for coding school and we do expect to see more Asia in 2017, covering different age ranges, from K-12, higher education to professionals.
Ecommerce – Still, Southeast Asia
2016 is not a quiet year for Southeast Asia ecommerce at all, we saw Alibaba’s US$1 billion acquisition of Lazada. China’s JD.com’s new shop in Indonesia, SoftBank, Sequoia Capital and SB Pan-Asia Fund’s US$100 million investment in Tokopedia. In 2017, we expect the Asia ecommerce focus will still be on Southeast Asia. We expect to see more acquisition led by China internet giants like Alibaba and Tencent providing good exit opportunities for VC and PE investors, driving them move and invest even faster. Meanwhile, we believe there will be more attention on social-commerce and mobile-commerce within the region in 2017, driving up the demand for related developers and valuation of related companies.
Of course, only time will tell how these factors play out; a significant disruption in economic growth, consumer preferences, or even a corporate competitor could overwrite or undermine any one of these trends. We’ll need to pay close attention to when and how these trends develop. In the next few weeks, we will dive deeper with you and see what we believe how these trends will play out in 2017.
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