Cloud Services
With COVID-19 restrictions in place across the world, even major business events such as the US initial public offering (IPO) of Chinese electric vehicle maker Xpeng took place online last year. “We are seeing this whole shift and migration towards technology, the Internet and the cloud,” Jixun said.
That shift is forecast to continue this year, with more widespread adoption of cloud services across the economy, particularly in China. “China has just started to migrate to the cloud. And that migration is still early on, from private to public, from single cloud to multi-cloud. Cloud migration will give rise to new opportunities and require more infrastructure investments in China,” he said.
Hans Tung, managing partner of GGV Capital, adds that tools for productivity, networking and communication will all see growing demand, so the providers of tools related to these areas will be worth looking at.
Take Otter.ai, the speech-to-text app, for example. “It records every Zoom meeting we have and generates a transcript afterwards, which makes life a lot easier,” Hans explained.
Other examples improving professional communication and workforce productivity include apps such as Fishbowl, Chief and Valence, which enable large-scale online engagement like company town halls and annual general meetings.
Photo by Chris Montgomery on Unsplash
Healthcare Potential
A shift to online is set to have a major impact on emerging market healthcare. India is a prime case in point, with e-commerce startup PharmEasy, the country’s largest online medicine and healthcare products store, poised to benefit. In fact, the Indian digital healthcare market is expected to increase at a CAGR of 27.41% to US$ 485.43 billion by 2024.
In India, the same medicines are prescribed and sold under a wide variety of brand names. In other words, pharmaceutical companies promote their brands to doctors, who prescribe selected brands to their patients.
The Indian pharmaceutical supply chain is also very fragmented. “Unlike the US where you have three large distributors and a couple of large retailers, you have 80,000 distributors and about 800,000 retailers in India,” said Siddharth Shah, co-founder and CEO of PharmEasy.
To ensure authenticity and affordability, PharmEasy buys medicines in bulk and actually owns the largest digital B2B platform in the country. This enables the platform to connect up to 50,000 retailers via 2,000 distributors and more than 1,000 pharmaceutical manufacturers.
Photo by National Cancer Institute on Unsplash
That model proved to be just what the market needed during COVID-19, when doctors were reluctant to see patients in person, and the close connection between the pharmaceutical companies and health practitioners was lost.
“The platforms that connected the patients to the pharmacies saw a massive bump up. Patients now want to engage digitally with the doctors,” Siddharth said.
And, with public initiatives like the National Digital Health Mission, which aims to provide each Indian citizen with an electronic health ID to engage digitally with the public healthcare system, PharmEasy and other startups offer value and potential for growth as private players, especially if they fall within the programme building blocks of HealthID, DigiDoctor, Health Facility Registry, Personal Health Records, e-Pharmacy and Telemedicine.
Fintech Focus
Interoperability – the ability for different systems to connect seamlessly with one another – is crucial for sustaining fintech’s growth. In emerging markets, there’s also the challenge of providing online financial services to large unbanked populations. In Indonesia, tech startup PayFazz is solving these problems by building a network of distributed banking agents to act as intermediaries between the country’s large base of unbanked users and its financial institutions.
“We get a lot of traction from people wanting to send money to pay service providers, like billing companies or e-commerce companies,” said co-founder and CEO Hendra Kwik. “People also like to use Payfazz agent services to send money to their relatives in another city.”
Another example is B2B cross-border payments network Thunes, which is expanding in emerging markets by connecting members such as banks, mobile wallets, and money transfer operators with the main purpose of enhancing interoperability.
In Kenya, for example, Thunes connects mobile money provider M-Pesa with PayPal. Many Kenyans are selling small handmade crafts on eBay, with overseas payments going into their PayPal account. Thunes enables users to collect their funds from PayPal in their M-Pesa accounts instantly.
Thunes also helps ride-hailing company Grab process instant payout to its drivers, a big advantage in recruiting more drivers into its network. “Many other delivery companies like food delivery or even taxis usually pay once a week or once every two weeks. But in many of the emerging markets, people need cash to fill up the tank or to buy food for the family in the evening. So they have a requirement to get quick cash,” said Thunes’s founder Peter De Caluwe.
As vaccines gradually allow countries to find their feet again, we believe economies will recover. With that, investors can look forward to continued opportunities, especially in sectors which received unexpected boosts from the impact of the pandemic.
