It’s one thing for local entrepreneurs to scale across Southeast Asia. It’s quite another for foreign entrepreneurs to do the same. The economic and logistical constraints unique to the region are already difficult to tackle: lack of a universal payment method, like credit cards or PayPal; relatively poor infrastructure and logistics; and hard-to-reach consumers who are more inclined to purchase offline than on. But foreign entrepreneurs have the added disadvantage of being unaccustomed to local languages, cultures, and even work habits.

Despite the challenges, Korean entrepreneurs are coming to Southeast Asia to explore the incredible potential in the region, and some are finding great success. There’s much to earn from these success stories and the learnings of the founders along the way.

1) Think Mobile First

Mobile is the chief facilitator of internet access across Southeast Asia. Consumers here are not only comfortable navigating the web on smartphones, they often prefer mobile over desktop.

Korean couples app Between, was able to rapidly step up operations across Southeast Asia by focusing exclusively on mobile platforms. Given the mobile-centric habits of Southeast Asian consumers, Edward Lee, Head of International Business, was able to refine his product by focusing exclusively on growing key mobile metrics, namely app downloads, user retention, and in-app purchases.

2) The growth of Emerging Markets builds value for global companies

Emerging markets are often mistaken as having no real opportunities for large exits, rapid growth, or paying customers. Of course, the more prevalent this line of thinking, the greater the opportunity for companies targeting underserved markets in Southeast Asia: no one else from outside the region is going to do it, so if you see an untapped market in Southeast Asia, take it.

5Rocks’ growth strategy was to onboard game developers across Southeast Asia. Countries like Singapore, Malaysia, and Thailand. This secured their reputation as a leading mobile gaming analytics and marketing platform for Southeast Asian developers, which ultimately helped the get acquired by Tapjoy earlier this year.

Sejoong Kim, CEO of JellyBus which services 50 million users through their photo apps, said his growth while largely organic, has also been due in part to his several visits to Singapore, Indonesia, and Hong Kong for business networking. These trips, and the friendships he has formed, have helped him learn local cultures. He added:

Southeast Asia has great potential, especially in mobile. Although a small city, Singapore is a hub connecting Malaysia, Indonesia, and many other countries in the region.  Each country provides unique opportunities for expansion. However, to be successful in the region takes a long time, so make sure you understand the local market challenges.

3) Even Powerful Companies will Succumb to Competition in Southeast Asia

Southeast Asia is a misnomer. The name itself implies a single market; this couldn’t be farther from the truth. Each country will have its own leaders, laggards, winners and losers, and one market’s clear front runner might stumble the moment it expands into another country.

Kakao Corp., developers of the eponymous Korean messaging service and social platform Kakao Talk, is a publicly-listed Korean company with over 140 million users; it’s become a platform that’s facilitated over 400 million game downloads and its own music streaming service. And yet Kakao Talk struggles to grow in Southeast Asia, as China’s WeChat, Japan’s Line, WhatsApp, and Viber carve out entrenched market shares across the region. New entrants to the region, like Kakao, will likely have difficult time if competing directly with existing similar services and products.

However, many Korean companies will see less competition from locally grown players, as Southeast Asia is still a nascent startup ecosystem.  Take Bobby Choi, previously Director of Global Development for Danal, one of the worlds first mobile payments companies, started almost twenty years ago in Korea.  Bobby brought his mobile payments experience to Indonesia and Malaysia with little competition on-the-ground, when he co-founded Coda Payments.

4) Leverage Partnerships

Working with local partners is a great way to expand into a new market.  Between saw rapid organic adoption in the Southeast Asian countries of Thailand, Malaysia and Singapore, which led to their hiring of Joash Wee to help build partnerships in the region.  From Carousell to Burpple, both of which shared very similar demographics to Between - twenty-something females, into fashion and style, and going out to eat at the latest restaurants.

On the value of partnerships, Joash Wee, says

“There is much to gain out of partnering with another company.  First, you can take advantage of shared resources, such as marketing.  Second, both companies benefit from an their respective userbases.  And third, it’s about the lessons on the ground.  For a Korean company to expand to Southeast Asia, they will be coming in without local knowledge, so working with a local partner helps with on-the-ground, operational know-how.  You can read about it, but until you’re executing on the ground, you won’t understand it.”

5) Challenges

When Between partnered with Uber in Korea, the partnership provided many referrals thanks to the high credit card penetration in Korea. However, when they tried a similar partnership with Uber in Thailand, Between found that Uber’s requirement to use a credit card was a huge barrier to entry and didn’t provide the same value.  They found that working with a partner, such as Rakuten, who had a longer history in the local market, and accepted alternate payment methods, was much more beneficial.

Conclusion - Capitalise on Marketable Strengths

Korean startups, such as KaokaoTalk and Hangame, have been influencing startups around the region for years, with their UI design and game play, respectively.  Korean pop culture, from K-pop music, to TV dramas, to beauty and fashion, are heavily consumed and well respected not just in Southeast Asia, but around the globe.

The successful sale of Singapore startup Viki last year for US$200M was largely in part due to the company’s number one streaming media - Korean dramas.  Memebox, Korea’s top beauty subscription service is almost identical to Birchbox’s product in the United States, but Memebox benefits from its association with Korea’s massive beauty product industry and cosmetic-surgery tourism. By targeting countries that are well-acquainted with Korea’s reputation for beauty products, Memebox is able to scale far more efficiently and cheaply than companies in a similar space.

Authored for beTECH.asia by Vincent Lauria and Justin Hall of Golden Gate Ventures

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