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Business News/ Opinion / Asia’s Internet challenge

Asia’s Internet challenge

Asia doesn't need more infrastructure; it needs a change in attitudes among business and govt leaders

Prohibitive regulatory systems, lack of payment solutions, local language focus, approach and available local talent are all highlighted as hurdles for Asia’s platforms and creators to grow. Photo: Lam Yik Fei/BloombergPremium
Prohibitive regulatory systems, lack of payment solutions, local language focus, approach and available local talent are all highlighted as hurdles for Asia’s platforms and creators to grow. Photo: Lam Yik Fei/Bloomberg

Connectivity is transforming Asia. Whether it’s farmers who can check market prices on their mobile phones via SMS, bringing transparency that middlemen used to obscure, or South Korea’s young, urban hipsters, who watch high-definition streaming videos on ultra-fast mobile broadband networks, Asians are making new connections to improve the quality of their lives.

This is most clear in the region’s Internet-related statistics, which are staggering. For instance, China alone has more than 560 million people online. India and Indonesia, meanwhile, each have more Facebookusers than the likes of Mexico and France.

Asia is also producing content that has global appeal. The most obvious example of this is Psy, the South Korean rapper whose Gangnam Style video garnered 1.5 billion views on YouTube. Apps created in Japan and South Korea are among the most popular on the world’s largest app stores.

It is somewhat ironic that Psy found a global audience on YouTube, an American platform. After all, Korea has some domestic video platforms that play very well over its network, yet they didn’t find success abroad. They were long hampered by laws that required users and viewers to have a Korean social-security number. Korea’s pop industry has instead used YouTube to push bands like Girls Generation abroad for years, with that band reaching the top of Japan’s charts in 2011 in the space of a week, compared with the year it took for Korean bands to crack Japan’s album charts before. Of course, no one expected Psy to be the musician who went truly global. But he did, precisely because his music company used YouTube for all the other bands they were trying to push abroad. The lesson is that on the Internet, everything is a global opportunity, even when you’re domestic.

As an Asian trade association representing some of the largest Internet companies in the world, we wondered when Asia will produce a global Internet giant. We also wondered if there were social or institutional factors hindering global platforms and content creators from emerging out of Asia. Given that Asia is home to nearly half the world’s Internet users, one would expect Asian names to play a prominent role in the global Internet arena.

We commissioned the Economist Intelligence Unit (EIU), a global research group, to consider these questions. They interviewed senior executives from more than 30 content creators, platforms and investors around the region and examined the business environment faced by these companies in Asia.

The report makes clear that one of the biggest changes necessary for Asia isn’t more infrastructure or cooler devices; it’s a change in attitudes among business and government leaders that takes into account that the Internet is, first and foremost, a global opportunity for any business and country. The local market should be viewed as a stepping stone, just as it was for Psy.

On the business side, entrepreneurs in Asia tend to be complacent about the size of their home markets. The enormity of China and India can make expansion for the rest of the world seems unnecessary. Yet can you imagine if Googleand Facebook had simply settled for their huge domestic market? Some Asian platforms found this out by what the EIU calls “accidental globalization". Korean firm NHN made a chat app called Line that it thought was aimed at the Japan market. It turned out that a lot of people around the world liked it as much as any hip Tokyo resident. NHN is marketing the app across East Asia, Spain and Chile. It currently has 120 million users in over 40 countries, and is aiming for 300 million. This suggests that any content or service that is appealing to users can easily be a global hit, regardless of its country of origin. Johanan Sen, the business strategy director at PopDigital, a Malaysian digital content firm, sums it up to the EIU this way: “I think we need to flip the old saying, making it ‘think local, act global’."

But the report makes it clear how difficult this is. Prohibitive regulatory systems, lack of payment solutions, local language focus, approach and available local talent are all highlighted as hurdles for Asia’s platforms and creators to grow.

Laws aimed at making the Internet fit Asian politicians’ ideas of how the Internet should behave have created obstacles for Asian companies, obstacles that Amazonand Google never had to face when they were starting up in their home markets. In India specifically, there are instances in which small companies have to hire staff to constantly monitor content. For example, Quickr, an online classifieds site, employs 100 people to monitor content out of a full-time staff of 400. The resources required to do the job could clearly be devoted to other activities. According to Faisal Farooqui, the founder of, a consumer product review site, which is challenging the country’s IT laws in India’s Supreme Court, the rules are “so vague that it cannot be predicted with certainty as to what is prohibited and what is permitted". A consequence of this law would be the delegation of essential executive function to private parties like, to censor and restrict free speech of citizens or else face legal challenge for users’ content. Farooqui says that his company has been hit with hundreds of legal notices and been harassed by police on behalf of companies who were unhappy with the reviews of their products posted on the site.

Comments are welcome at

John Ure is executive director, The Asia Internet Coalition.

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Updated: 07 Jul 2013, 05:39 PM IST
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