The terms "emerging markets," "developing nations" and the antiquated "Third World" have always rubbed me the wrong way and not just because I grew up in Mumbai, live in Singapore and do business across Southeast Asia. These terms bother me because they prevent people from seeing how dramatically the world has changed, especially over the last decade. For investors, this means not just missing the train but not even realizing that there is one.
The traditional view of Southeast Asia, for example, is that it's a fragmented region of countries with more differences than similarities. The practice of labeling some countries as emerging and others as developed prevents investors and policymakers from seeing the opportunities. If investors look at what these countries have in common, rather than what they don't, the opportunities become obvious.
Consider the skyrocketing use of the internet and social media in the region thanks to the increasing ubiquity of smartphone and mobile technologies. Now the region has the third-largest number of internet users in the world with 350 million, more than the population of the U.S., according to a study published Nov. 18 by Google and Singapore's Temasek Holdings. Over the last three years, more than 3 million Southeast Asians have gone online for the first time every month, according to the study. Internet users in Thailand, Indonesia, the Philippines and Malaysia spend four hours or more on mobile internet, "among the top 10 globally in terms of engagement," according to the study, compared with just two hours in the U.S. The region's internet economy is expected to more than triple to $240 billion over the next seven years, according to the Google-Temasek study.
A young middle-class woman in Singapore today probably has more in common with her counterpart in Ho Chi Minh City, in terms of consumer behavior, than with someone from a different socioeconomic class in her own country. There is now a huge, increasingly mobile- and internet-savvy potential market of young consumers in Southeast Asia that didn't exist less than a decade ago. This digitally native and highly connected generation of Southeast Asians is becoming a key driver of consumption-led growth. We're witnessing the creation of new category leaders that use technology to transcend geographic fragmentation in many industries.