How to enter new markets in Asia from CEE: The story of a Hungarian startupper

The digital economy and mobile-based services are flourishing in the densely populated Southeast Asian region. While it is difficult to follow this technological boom from Central and Eastern Europe (CEE), some companies – including Talk-A-Bot, a Hungarian chatbot startup – are working on this. How do they do it? What is the first step for an entrepreneur from CEE who wants to set foot in the cosmopolitan Singapore, the region’s main financial and innovation hub? According to Ákos Deliága, a Hungarian startupper, building local relationships is the key, but there are some other challenges worth being prepared for.

I've been a gadget hunter and a huge fan of technology for a long time. But what I’m especially interested in is how innovations can be implemented in business life. I also love Southeast Asia. I've had the chance to spend 2-3 years of my life there, and I’ve always appreciated the unique atmosphere and the diverse culture that characterizes the region,”

– said Ákos Deliága, cofounder of the chatbot startup Talk-A-Bot that is currently expanding into both CEE and Southeast Asia.


Egg or banana?

People in Asia usually call me an egg. This is one of the two commonly used metaphors there; the other is the banana. If you’re a banana, you're yellow on the outside and white on the inside. This expression is used to describe Asians who behave like Europeans or Americans. If you're called an egg, it means the exact opposite: you're white on the outside and yellow on the inside, so you have white skin, but you act like an Asian,

Ákos explained. He used to work for Hewlett Packard, where he was transferred to Singapore for two years to manage its South Asian business development. Thus it is no surprise that he's familiar with the local customs and the many opportunities that are available there for global businesses.


Ákos participated in the 2018 Techstars and Rakuten accelerator program (the biggest Japanese e-commerce company) in Singapore, so he recently had another chance to spend a few months there. Talk-A-Bot’s chatbot uses sophisticated artificial intelligence (AI) components and language processing features, which makes it easy to adopt special languages. This is a good selling point in Southeast Asia, where mobile-based services are flourishing, and big companies are eager to find suppliers that provide cutting-edge technologies.

Atmosphere of competition


According to Ákos, there are two things that European entrepreneurs should be prepared for if they plan to partner with South Asian companies.


Fierce competition: Companies in the region have high expectations of their suppliers in terms of quality. As we're talking about a very competitive and fast-growing market, they're always looking for the next big thing and cannot afford to buy last year's technology.


Speed and quick decisions: If you're a businessman from Central Europe, the emphasis they put on speed in Asia might surprise you. For example, if you ask for an appointment, you'll receive one within the week, or in the worst case the following week. This is very much in contrast to Europe, where decision-makers like to take their time.

You can feel this constant necessity to innovate and be competitive. I really appreciate this attitude. This region has experienced consistent growth in the past decade, and they are hopeful that the growth will continue. While in other parts of the world, including CEE, people are more careful, and are always expecting the next crisis. In Asia, people fear their rivals rather than a possible crisis,

Ákos said.


Respecting each other is crucial


In Southeast Asia, the digital economy is developing in a unique way: it's growing fast, but it started from a low level. For example, people never had fiber Internet in their homes; they started with 4G. The region has a huge population, hundreds of millions of mobile-savvy customers. Economic growth is still rapid, but companies need to innovate and bring in expertise from abroad to stay ahead of the competition. As a result, locals welcome foreigners who are treated as expats rather than immigrants.


The way you treat others is extremely important in Southeast Asia, as business life is very relationship-driven there, even more so than in CEE.

“Especially in Singapore, which is a melting pot of different cultures, respecting each other is crucial. That is why it is important to build relationships first, if you want to expand in Asia. For example, visiting conferences and meetups is a great way to find partners to cooperate with. It also enables you to check the market and gain as much information as you need,”

Ákos advised.


Every industry will be transformed


In the CEE region, many companies find it difficult to undertake digital transformation. To achieve success, business leaders must realize they need to integrate into the digital world. They also need a clear vision for the future, because working around the bits and pieces is super hard. They should also prepare their companies, which is a challenge, but there are smart ways to do this. For example, some might set up an innovation department, while others choose to create a spinoff company to experiment with new ideas while running the core business separately.


Another big problem is that many CEE entrepreneurs believe that AI will not affect their industry. According to Ákos, however, they are not well-informed in this respect. He mentioned the example of an American restaurant owner who orders vegetables based on the weather forecast and the AI-led prediction of demand in his restaurant.

“Today, it's very important to see how your business can be digitalized or supported by data. Entrepreneurs who want to be successful should become change agents instead of following their rivals. No one should think that digitalisation has no impact on their industry, because everybody is affected, highly regulated industries and governments included. There are no exceptions,”

- Ákos added.


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