Exploring Thailand’s Thriving Startup Ecosystem: Insights and Opportunities for Korean Entrepreneurs

Writers: Pranai Fuang-Arom and Steve Cervantes.

In recent years, Thailand’s startup ecosystem has undergone a remarkable transformation, becoming an enticing destination for both local and foreign entrepreneurs. With several homegrown Unicorns and a burgeoning tech scene, Thailand offers a fertile ground for innovation. This article delves into the key insights and opportunities for Korean startups looking to venture into Thailand’s dynamic startup landscape.

Social Impact Startup DamoGO

In 2021, DamoGO, a startup focused on social impact, observed the constraints of Korea’s market alongside Indonesia’s burgeoning market, boasting a youthful population of 274 million. Despite establishing 65 business partnerships and experiencing a successful initial two-year period, DamoGO’s founder and CEO Lin Hwang, after presenting at several Indonesian conferences and events, came to a decisive understanding. He realized that Korea’s market, in comparison to Indonesia’s, was relatively small and more mature, while Indonesia’s startup scene was on an upward trajectory and offered more growth potential.

Lin further saw Indonesia’s location as a launch pad for eventually making a foray into Thailand’s promising flourishing tourism market where tourist arrivals increased by 384% compared to the same period last year.

Thailand’s “plethora of swanky hotels and restaurants are the perfect product/market fit for DamoGo’s core competency in optimizing supply chains to solve food waste problems,” adds Lin, “Thailand’s is veritably infinite and has room for a lot of players.”

Fashion Startup Pomelo

David Jou, an American-born entrepreneur and co-founder of Pomelo Fashion, stands out as one of the pioneering Korean figures in the Thai market. Pomelo has revolutionized the fast fashion industry as an omnichannel retailer, combining a global outlook with the provision of trendy, online-accessible fashion suited for modern, active lifestyles. With its significant presence in Southeast Asia, Pomelo operates 27 stores, including 22 in Thailand, two each in Singapore and Indonesia, and one in Malaysia. Jou was among the first to recognize Thailand’s immense market potential, launching Pomelo’s operations there in 2013. He selected Thailand, particularly Bangkok, as the starting point for the brand due to “its status as the fashion hub of Southeast Asia, noted for its abundant fashion talent.”

Jou highlights “Bangkok’s allure, attracting shoppers from across the region, including Singapore, Malaysia, and Indonesia, who flock to the city for its fashion trends and vibrant retail scene.”

Vast Potential for Korean Startups

Charkhris Phomyoth, also known as Gap, the founder and CEO of the Thai social enterprise YoungHappy, views the immediate success of David Jou’s B2C venture Pomelo in the Thai market as somewhat atypical for Korean startups. He advises Korean startups considering entry into the Thai market to initially focus on B2B models. Gap suggests that “B2B can serve as a springboard for growth, allowing firms to leverage existing resources effectively.” He contrasts this with the B2C sector, which often involves high initial costs, particularly due to the expenses associated with adapting to the Thai market’s specific requirements.

Nevertheless, Gap recognizes the vast potential for Korean startups specializing in advanced deep tech and robotics. Illustrating this, his venture, YoungHappy, is a prime example. The social enterprise is actively considering the integration of Korean technological innovations to address the issue of loneliness among the elderly. YoungHappy, with its platform dedicated to encouraging active lifestyles among senior citizens, is exploring the use of Korean technology to enhance the quality of life for this demographic.

Gap insightfully perceives that the potential of YoungHappy’s model is not an isolated case. He envisions a “broad spectrum of applications for Korean technology across various Thai industries, [ranging] from entertainment to healthcare.” He believes that Korean tech has the versatility to adapt and thrive in these diverse sectors in Thailand.

Opportunities in the AI Sector

David Henderson, CEO and founder of DRVR, a fleet and smartphone telematics platform, highlights Thailand as a “promising haven” for Korean AI startups. He notes the absence of significant AI monopolies or oligopolies in the country, suggesting a more open and accessible market for new entrants in the AI sector.

Indeed, while Thailand’s STEM workforce is expanding, it still lags behind its Asian counterparts. This gap has resulted in a scarcity of startups associated with the Fourth Industrial Revolution, including those in AI. Consequently, this environment makes it challenging for any leading corporation to establish a monopoly in the AI sector at this stage.

Despite the plethora of opportunities and niches in Thailand, David provides valuable guidance for Korean startups.

He stresses the “importance for foreign startups to establish strategic partnerships with local corporations and startups.” This approach is “crucial, considering the challenges foreign startups might face, such as limited market knowledge, Thai language proficiency, and understanding of local distribution channels.”

Reflecting on DRVR’s journey since its founding a decade ago, David shared a crucial lesson learned about the pitfalls of delayed market entry. He emphasized the significance of establishing connections with local partners and collaborators, especially in sectors such as insurance and financial services. He acknowledged that “it took considerable time to appreciate the importance of these local relationships in handling distribution, emphasizing that a deep understanding and integration into the local market are vital and that local connections are indispensable in achieving this.”

Importance of a Thai co-founder

Pearly Ingkakul, co-founder of Neobank, a top fintech startup in Thailand, takes the concept of local collaboration a step further. She asserts that mere partnerships are insufficient for foreign startups. What is essential, she suggests, ”is having a Thai co-founder who possesses a robust network within the business community, government, and regulatory agencies.” She argues that the “absence of such a Thai co-founder could lead to foreign startups facing challenges in comprehending the Thai market, overcoming language barriers, building a network, establishing credibility, and navigating the complexities of Thailand’s legal and regulatory frameworks.”

For individuals new to Thailand and lacking extensive market knowledge, the universal approach of networking remains relevant. Seeking an appropriate co-founder can be pursued through attending local entrepreneurial events, networking gatherings, or utilizing professional social networks and platforms such as LinkedIn, which connect entrepreneurs and business professionals. However, it’s important to note that relying solely on platforms like LinkedIn for finding a co-founder may not be very effective, considering the Thai professional culture doesn’t heavily rely on online networking platforms.

In Thailand’s status-aware culture, it is commonly seen that executives in corporations and startups, including those in high-ranking positions like the C-suite, typically show reluctance to engage with potential partners through professional online platforms.

Networking Group in Thailand

Asia Pillars, a prominent business networking group in Thailand, connects a wide range of professionals including C-level executives, department heads, specialists, founders, and business proprietors. These events typically feature 30 distinguished industry figures, known as the “Pillars,” and attract hundreds of attendees from diverse industries, fostering rich discussions and networking opportunities. The objective of these gatherings is to establish a forum where industry leaders and professionals from various sectors can converge, share ideas, and explore potential collaborations. Recognizing the value of such networks, Pearly advocates for foreign startups to engage with organizations like Asia Pillars to find compatible co-founders and partners. Her own experience is a testament to this approach; she met her co-founder at an Asia Pillars event, leading to a successful partnership where her co-founder’s technical acumen complements her operational expertise. Their collaboration has been prospering for more than two years.

Pearly points out that although the 12,000 Baht annual membership fee (equivalent to about 440,000 KRW) might appear costly for startups on a tight budget, “the opportunity to connect with a network of 250 C-level executives and department heads could justify the expense as a valuable investment.”

Asia Pillars can also offer foreign startups the chance to meet and network with VCs. Being well-versed in the Korean startup ecosystem, she recognizes that many foreign and Korean female-led startups are often underfunded. However, her active involvement and connections with Thai VCs have led her to believe that “these startups are appealing for Thai co-founders to partner with foreign counterparts…This collaboration is seen as a strategic move to scale globally and leverage each other’s networks, making them more attractive investment opportunities.”

Asia Pillars also provides foreign startups, including those from Korea, with opportunities to connect and network with VCs. Pearly, who has extensive knowledge of the Korean startup ecosystem, acknowledges that many startups led by women, both Korean and international, typically receive less funding. However, her direct engagement with Thai VCs and her network in Thailand have convinced her that these startups are attractive for Thai co-founders to collaborate with their foreign counterparts. She views such partnerships as strategic steps towards global scaling and mutual network leveraging, which in turn enhances their appeal as investment prospects.

Pearly highlights the significant progress made by Thai women in the field of management, where an impressive 32% occupy senior leadership positions. This figure surpasses the global average of 27% and the APAC region’s average of 26%. Thailand is at the forefront globally in terms of female representation in C-suite roles. This positive trend is contributing to the success and growth of women-led startups. Consequently, “the environment is favorable for Korean women entrepreneurs looking to expand and establish startups in partnership with Thai co-founders.”

Thailand offers Korean entrepreneurs a rich landscape filled with opportunities, provided they can navigate its unique challenges. The key to success lies in understanding local market dynamics, building strong local partnerships, and being adaptable. By doing so, Korean startups can make significant inroads into Thailand’s thriving startup ecosystem, contributing to its growth and diversifying their own business ventures.