“I hate the terms unicorn or decacorn; I like to think we’re cockroaches – we’re always going to survive,” said Andre Soelistyo, President of GOJEK. 

Whether you prefer mythical animals or nuclear-surviving insects, what is clear is that Indonesia is home to one of the most vibrant start-up markets in Asia. Currently the source of four unicorns, Indonesia’s government expects another four to be created in 2019. What’s driving this success? Well the country has a population of 270 million that unlike many other Asian nations is focused more on consuming than saving. In addition, the infrastructure for moving goods, reaching customers and making payments is behind many of its neighbours, “so there is a chance to leapfrog. It’s almost a nation-building exercise,” said Soelistyo. 

Friend or foe?

Given the potential of the Indonesia’s e-commerce market, it’s unsurprising that China’s biggest unicorns are taking an interest. Alibaba, Meituan-Dianping and Tencent are just some of the companies that have invested in Indonesian internet companies. But given that Chinese groups are increasingly looking to expand abroad, it raises the question of whether they present more of a threat than an opportunity. 

“I would say they are our friend,” said Patrick Cao, President of Tokopedia. “I call it the crystal ball phenomenon. They help us to understand what happened in the past, what mistakes to avoid but also show us how it might be in the future.”

Boffins needed 

But even if along with India, Indonesia is one of the fastest growing unicorn markets in Asia, China remains the region’s powerhouse. China (including Hong Kong) is home to 93 start-ups with US$1 billion valuations putting it second place behind the US. 

But despite the success of China’s start-up universe, it faces some obstacles to its growth, especially when it comes to talent, argued Vincent Chan, Credit Suisse’s Head of Equity Strategy China. 

"If you talk to an AI company in China and you ask them where all the good scientists are, they'll still tell you they're in the US." 

And having a strong reserve of scientists and engineers is important as Credit Suisse believes AI and big data present a big opportunity for the next generation of unicorns. Government investment into AI solutions – especially in public surveillance and security – combined with the huge amount of data available in China gives the country a massive advantage in the space. However, what China lacks is the original research and development that will allow it to leapfrog other countries. 

“The reason China is still a user of technology rather than an innovator of technology is because the amount of basic research is well behind the US. Over 80% of investment in China is downstream, focused on the commercialisation of the technology. More applied research rather than basic research means that you are always borrowing technology from other countries,” said Chan.

Safety first 

Moreover, AI will also power two of the other sectors that Credit Suisse views as prime sources of future Chinese unicorns: healthcare and automobiles.

In the automobile space, autonomous driving was in the spotlight at the Asian Investment Conference as C-suite representatives from PlusAI, AutoX and Tu Simple (itself a unicorn) – discussed the outlook for the industry. What is clear is that unlike China’s start-ups based in the consumer sector, self-driving vehicles face a different set of challenges in terms of technology, regulation and commercialisation. Specifically, given the implications of the technology, it was natural that one area of discussion was the safety standards of self-driving cars. Will it be enough for the autonomous vehicles companies to prove that the cars are safer than human drivers? 

“The standard that is going to be placed on our industry is not just to be safer than human drivers, we will need to be 10-times safer than human drivers before we can commercially roll this out,” argued PlusAI’s Founder and CEO David Liu. 

From creating new infrastructure to embracing artificial intelligence and advancing safety, Asia’s unicorns are primed not only to survive but to thrive.