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CNA
an hour ago
- CNA
Ctrl-Alt-Pivot? Why China's tech titans are powering up in Southeast Asia
SHANGHAI: At Singapore's Jewel Changi Airport, a smiling digital concierge powered by Tencent Cloud greets travellers, offering directions, dining tips and real-time shopping recommendations in five languages. Once the realm of science fiction, such smart services are increasingly becoming everyday realities across Southeast Asia - and China is positioning itself at the heart of this digital transformation. From cloud deployments in Jakarta to artificial intelligence (AI) models tailored for Thai users, China's tech titans - Alibaba, ByteDance, SenseTime, Tencent and others - are expanding their regional footprint with new scale and sophistication. Heightened US-China tensions, tighter export controls and volatile Western markets have spurred Chinese firms to look beyond the West. Analysts say Southeast Asia has emerged as a key focus, a view echoed by Chinese tech executives in interviews with CNA. 'It's very clear to me that the investment is real. The market opportunity they are envisioning is real,' Ray Wang, research director for semiconductors, supply chain and emerging tech at advisory firm The Futurum Group, told CNA. But rather than a short-term pivot, observers say the shift is the result of a long-cultivated strategy - a multi-billion-dollar digital courtship aimed at turning Southeast Asia into a cornerstone of China's next global tech chapter. TECH, TIE-UPS AND TRANSFORMATION While an overall headline figure is hard to pin down, Chinese tech firms have been pouring billions of dollars into the region. In February, TikTok - the ByteDance-owned social media platform facing a potential ban in the United States - pledged US$8.8 billion over the next five years to build data centres and digital infrastructure in Thailand. Alibaba Cloud is also scaling up, announcing in July its third data centre in Malaysia, with another due to open in the Philippines this October. This development is part of Alibaba's 380 billion yuan (US$53 billion) investment plan in AI and cloud infrastructure over the next three years, a sum the company has said exceeds its total spending in this area over the past decade. The launch of its AI Global Competency Center in Singapore last month further underscores its regional ambitions, with the facility aiming to support AI adoption for more than 5,000 companies and 100,000 developers worldwide. SenseTime has also deepened its engagement in Southeast Asia. Best known for its AI and computer vision software, the firm signed an agreement with the Indonesian government at the recent World AI Conference in Shanghai. The agreement centres on jointly developing homegrown AI models, smart city technologies and nurturing local AI talent. It builds on SenseTime's existing footprint in smart city and green technology solutions in Singapore and Malaysia. All these moves are backed by massive national-level investment. Chinese AI capital expenditure is on track to reach US$98 billion this year, up 48 per cent from the previous year, according to a report by Bank of America, driving home Beijing's ambition to lead globally in AI, cloud computing and smart infrastructure. On the ground, Chinese technologies are increasingly embedded in everyday life and business operations across Southeast Asia. In June, GoTo Group and Alibaba Cloud announced the successful migration of GoTo Financial's infrastructure to Alibaba Cloud's data centres in Jakarta. In the Philippines, media organisation ABS-CBN uses Alibaba Cloud services for content storage and archiving, while in Thailand, the company partners with telecoms provider TrueBusiness to support digital transformation for local enterprises. At Indonesia's Telkomsel, Tencent Cloud's AI-powered palm verification technology is used to confirm users' identities and enable secure payments. In Malaysia, mobile network provider YTL Communications leverages Tencent's digital ID tools to streamline mobile registrations and curb fraud. 'We have helped many Southeast Asian enterprises adopt a robust multi-cloud strategy that is best suited to their business and compliance needs,' Bluefin Zhao, vice president of Tencent Cloud and managing director for APAC, told CNA. 'Our clients scale their business growth and success together with us in an ongoing and long-term manner,' he added. Zhao noted that Tencent's presence is particularly strong in Indonesia, Malaysia, Singapore, and Thailand - priority markets where the company has made 'significant headway', achieving double-digit growth rates over the past three years. He linked this progress to Tencent's roots in consumer technology. 'We have decades of experience from running one of the world's largest digital ecosystem platforms, WeChat/Weixin, that serves over a billion users to the largest video gaming ecosystems in the world,' Zhao said. That expertise is now powering Tencent's next-generation AI push. Its large model technology, Hunyuan, has recently been integrated into more than 700 internal products across Tencent's ecosystem, spanning 30 industries from public services and healthcare to tourism and finance. Large model technology refers to AI systems trained on vast amounts of data to perform a wide range of complex tasks, such as understanding language, generating content and analysing patterns. Wu Yongjian, the head of Tencent Cloud AI product and technology R&D, told CNA that Hunyuan delivers strong performance without heavy computing requirements, making it a good fit for mid-sized businesses and fast-growing markets. QUICK SHIFT OR COMMITTED STRATEGY? Geopolitical tensions are among the factors prompting Chinese tech firms to look more closely at Southeast Asia, as business with the West grows increasingly fraught, analysts say. The US has ramped up export controls on advanced semiconductors, placed dozens of Chinese tech firms on its export control entity list and urged allies and partners to curb reliance on Chinese digital infrastructure. But observers say it's not the overriding reason. Instead, they point to business fundamentals - from booming digital demand to favourable demographics - as the main drivers behind China's deepening tech pivot to the region. '(It is) a medium to long-term strategy for (the Chinese companies) to drive more growth to places beyond China and the North American market,' said Wang from The Futurum Group. Wang said Southeast Asia is 'naturally' appealing to Chinese tech companies due to years of business familiarity, established relationships and geographic proximity. These factors lower barriers to expansion and make it simpler to deploy talent and run cross-border operations compared to more distant markets, he said. 'Culturally, it's just a lot easier for Chinese companies to figure out … geographically, it's also a lot closer for the companies to set up their headquarters (in the region) and send the employees there.' Jia Kai, an associate professor at Shanghai Jiao Tong University's School of International and Public Affairs, highlighted the diversity of Southeast Asia and the varying levels of AI maturity across its economies. 'The Southeast Asian market is important because if we want to realise the potential of AI, we still need many applications in different fields, in different cultures and environments,' he told CNA. 'The most important thing for AI is to find different environments … the digital infrastructure of Southeast Asia has already been well established.' Senior executives from major Chinese tech firms interviewed by CNA also emphasised that Southeast Asia is a core strategic focus, especially considering the growing regional demand for AI services in the region. Governments, businesses and consumers are rapidly adopting AI-powered services to drive growth, boost efficiency and enhance daily life - a shift fuelled by urbanisation, mobile-first consumer behaviour and national efforts to digitise economies. AI, including its generative form, is expected to contribute around US$120 billion to Southeast Asia's gross domestic product (GDP) by 2027, according to an April report by Boston Consulting Group. Global management consulting firm iMARC Group noted that the Southeast Asian cloud computing market reached US$208.8 billion last year, and is projected to grow at a 10.49 per cent compound annual growth rate to exceed US$512 billion by 2033. Wu, the head of Tencent Cloud AI product and technology R&D, said that the company 'absolutely sees' Southeast Asia as a key strategic region, both as a market and as a testbed for refining its offerings. Fellow Tencent Cloud executive Zhao added that the region's rapid digital transformation, driven by progressive enterprises and supportive national policies, has been a 'key catalyst' for the company's accelerated growth there. 'The region is incredibly diverse and dynamic, with markets and industry verticals at varying stages of digital maturity,' Zhao said, adding that this presents opportunities as businesses seek customised digital solutions. In the case of the digital concierge at Jewel Changi Airport, for instance, early results from the pilot that began in March show that travellers prefer this intuitive, hands-free mode of engagement over traditional directories. Jeff Shi, SenseTime's Asia Pacific president, described the Southeast Asia market as 'huge and characterised by a young population' compared to others such as Northeast Asia, where the market is smaller and dominated by major corporations such as Sony and Honda. 'We are seeing faster growth and investing more, with over half of our approximately 200 enterprise customers in Asia based in Southeast Asia. Singapore, in particular, acts as a showcase for the region,' Shi told CNA. Choong Hon Keat, Singapore country manager at Alibaba Cloud Intelligence, said that Alibaba Cloud likewise views Southeast Asia as a key market, driven by 'escalating demand from local customers'. He added that a skilled workforce is the 'cornerstone' of successful digital transformation. 'We are unwavering in our commitment to invest in the development of digital talent (in the region),' Choong told CNA. Across the region, Alibaba Cloud is forging academic alliances. In Singapore, it has partnered with Nanyang Technological University to establish the Alibaba-NTU Global e-Sustainability CorpLab, aimed at advancing green technologies and promoting sustainable living. Meanwhile in the Philippines, the company has forged a partnership with De La Salle University to train students in advanced AI and cloud computing technologies. BUILDING TRUST ALONGSIDE INFRASTRUCTURE Even as Chinese tech firms eye further inroads into Southeast Asia, analysts warn that obstacles lie in store. Many governments and major firms in Southeast Asia remain more familiar with and are often deeply integrated into Western technology ecosystems. A 2023 report by the Center for Strategic and International Studies noted that US cloud giants such as Amazon Web Services, Microsoft Auzure and Google Cloud maintain a dominant foothold in the region. At the same time, the report found that US cloud computing companies face rising competition from Chinese rivals. It did not provide specific market share figures. This legacy integration - especially in government, banking, and regulated industries - means that most national agencies and large enterprises deploy hybrid or multi-cloud strategies, layering Western and Chinese infrastructure to balance performance with security and regulatory compliance. Jia from Shanghai Jiao Tong University said that adapting to divergent AI regulatory frameworks across the region poses a major hurdle for Chinese tech firms. CNA previously reported on how a race for AI regulation is taking place to avert the risks of the technology while hopefully reaping the rewards, with action being taken at the global, regional and national levels, including in Southeast Asia. This regulatory patchwork means that building trust will be just as important as building infrastructure, observers say. 'At present, I think misunderstanding and mistrust are the most significant bottlenecks to future cooperation or for Chinese tech companies entering the Southeast Asian market,' Jia said. Some companies in the region may have reservations about adopting Chinese cloud services or AI, said Wang from The Futurum Group. These concerns often centre on data privacy, regulatory compliance, and potential geopolitical pressure, particularly as governments grow more sensitive to issues of digital sovereignty and foreign influence. The Chinese tech firms will also need to carefully balance their own operational standards with those of local partners, Wang said. This tension between national concerns and global cooperation is not lost on Beijing, which has increasingly framed AI as a shared endeavour rather than a zero-sum race. 'AI must move toward inclusivity and shared benefit. It should become a public good for the benefit of all humanity,' said Chinese Premier Li Qiang as he opened the World AI Conference in Shanghai on Jul 26. He said if the world instead pursues 'technological monopolies, imposes controls, and erects barriers, AI will inevitably become a game exclusive to a privileged few'. Open AI ecosystems encourage diversity and multi-party engagement, providing an 'equal playground' for all, rather than central dominance, noted Jia from Shanghai Jiao Tong University. He further suggested that the effectiveness of these collaborative models will help determine whether Southeast Asia becomes primarily a proving ground or a true shaper of the next generation of Chinese AI models. 'If it's a public good, there is no leader - only stakeholders,' Jia said, describing the future of AI as a shared, multilateral enterprise rather than a contest for supremacy. Executives at Chinese tech firms acknowledge these sensitivities, saying they are working to build trust by focusing on long-term partnerships, transparency, and shared success. Wu from Tencent Cloud said that its partners help tailor workflows, knowledge management and deployment to specific industries. 'Although our product is robust, each customer's needs vary,' he said. 'Once deployed, the IP and knowledge stay with the client, which helps build trust and long-term value.' Choong from Alibaba Cloud Intelligence said the company operates on openness and trust. He cited Qwen3 - its most advanced open-source AI coding model to date - as an example, noting that by making it publicly available, Alibaba Cloud aims to foster a 'global community of innovation'. 'We believe that openness can in return democratise AI development, drive more AI innovation across businesses and society at large, and ultimately, benefit consumers with new and exciting AI applications.' Shi from SenseTime said the company's 'consistent' strategy is centred on helping partners succeed. 'We know the challenges and we also know the rewards of early AI adoption, so we share those with our partners, and we do want to share with more partners in Southeast Asia,' he said. 'I think customers are very happy with the fact that we are trying very hard to meet international norms - not (being) just a Chinese-Chinese company, but a company that is trying really to be international.'
CNA
an hour ago
- CNA
Commentary: Need a prata or a Ferrari? There are vending machines for that
SINGAPORE: Walk through any MRT station, mall, or even hospital in Singapore today and chances are, you'll see a vending machine or three. What used to be a niche fixture for drinks, potato chips and candy bars has evolved into a retail model in its own right. Banana cake from Johor Bahru's Hiap Joo, Mao Shan Wang durians from Kaki Kaki and even hot roti prata with curry from Springleaf Prata Place are now available on-demand, 24/7, while stocks last. There's no store, no staff, just a digital interface and a glass window. So, what's behind this rise? Is this temporary, or the future of retail? According to data analytics firm Euromonitor International, Singapore recorded S$117 million (US$90 million) in vending machine sales last year, up from S$100 million in 2019. The figure is projected to reach S$124 million by end-2025. Globally, consultancy firm Precedence Research forecasts that the vending machine market size could grow to US$45 billion by 2034 from an estimated US$23 billion this year. From those numbers, it is clear vending machines are becoming commercially viable and entrenched in our daily lives. WHY VENDING MACHINES ARE GAINING TRACTION Part of their appeal lies in their high efficiency and low cost. In a city known for higher rents, vending machines offer brands a cost-effective way to reach consumers without the overhead of a full retail operation. There are no staff to schedule, no point-of-sale systems to maintain and no need to lock up at the end of the day. A single machine in a busy location can generate steady revenue with minimal manpower. Vending machines are also cost-effective for testing new markets or maintaining a presence in high-traffic areas. Second, they align with Singapore's appetite for round-the-clock convenience. In a country where internet banking, online grocery shopping and QR code payments are part of daily life, Singaporeans are no strangers to the self-service model. Vending machines – which are always on, always stocked (ideally) and increasingly able to serve niche needs – now dispense everything from flowers, clothes, laundry detergent and even luxury cars. There are also vending machines that allow you to see a doctor, get a medical certificate and medication. And then, there is the fandom factor. PopMart and Labubu-style machines, for example, sell 'blind-box' items with the appeal of collectible surprise. Like Japan's gachapon machines, they play on mystery, expectation and the thrill of possibility, turning what would otherwise be a simple purchase into an entire experience. ARE WE HEADED TOWARD A VENDING-ONLY FUTURE? Still, while vending machines are clearly gaining ground, it's unlikely they will replace physical shops anytime soon. Product fit is a consideration. Some products do not lend themselves to the vending application. For example, fresh food has a limited shelf life, and delicate items like make-up can be damaged during dispensing. While vending machines work well for sealed snacks, drinks, collectibles and pre-packed meals, they fall short for things that require human interaction, education or guidance. Even with advances in artificial intelligence and personalised interfaces, some elements of the retail experience remain distinctly human and irreplaceable. Some products require customer education before purchase. For example, skincare, health supplements, tech gadgets and baby products often need guidance or clarification about ingredients, side effects or compatibility. In these cases, customers usually prefer face-to-face engagement to ask questions and clarify doubts. These are things that a vending machine cannot do - yet. Moreover, vending machines offer reach, but not depth. A brand can distribute its product but can't build a community or tell its story like a well-designed pop-up or store. For start-ups or lifestyle brands, physical touchpoints remain key to building trust and identity. POTENTIAL PITFALLS TO WATCH Although vending machines are less expensive than brick-and-mortar stores, they still require significant upfront capital. A new vending machine can cost between S$5,000 and S$10,000. For those who lease the machines instead, rental rates can cost up to S$800 a month. There are also expenses for hardware, licensing, software, maintenance and the logistics needed for regular replenishment, not to mention losses from wear and tear, technical issues or vandalism. Customer support is also an issue. When things go wrong, be it a jammed dispenser or a failed payment, there's no staff on-site to fix the issue. Without a way to resolve issues instantly, instant recourse, brand loyalty can suffer. A case in point: Amazon Dash Buttons. Designed to simplify reordering household products, they were discontinued after users found them unintuitive, lacked feedback mechanisms, and caused accidental orders. Another example is Stockwell (formerly known as Bodega). The AI vending machine, founded in 2017 by former Google employees, installed smart vending machines in offices and apartment lobbies in the United States, aiming to replace convenience stores. According to TechCrunch reports, Stockwell was unable to find a sustainable or scalable model for its vending machines, despite raising over US$45 million. They ultimately decided to shut down operations in 2020. A HYBRID FUTURE For all their efficiency, vending machines are not the future of retail. They are, instead, part of its evolution. Vending machines will become one of many tools in a brand's playbook. For instance, a bakery might use them to sell bestsellers after hours. A cosmetics brand might place machines in MRT stations to distribute limited-edition samples and drive buzz. A supermarket might offload fast-moving items to vending machines nearby, while staff focus on higher-value interactions. Healthcare providers could deploy machines in remote areas to improve medication access and continuity of care. More broadly, vending machines reflect a bigger trend: retail unbundling. Just as entertainment moved from free-to-air TV to cable to Netflix and TikTok clips, retail is being broken down into moments. Rather than competing with vending machines, stores may evolve into experience hubs where customers can explore, sample and benefit from the kind of personalised service only people can provide. You don't need a storefront to sell. But if you want to build a brand, tell a story or win loyalty, you still need more than a machine.
CNA
an hour ago
- CNA
Commentary: Prabowo's Indonesia draws opposition via cartoon pirates
CANBERRA: The lead up to Indonesia's Independence Day on Aug 17 is a colourful affair. Red and white blankets every surface and pole in the country ahead of celebrations. This year will mark an 80-year milestone – one the government isn't keen on sharing with a popular long-running anime TV series. One Piece is a classic for a reason, a tale of good people versus a draconian regime that rules with an iron fist and ostentatious decadence. The story follows Monkey D Luffy and fellow Straw Hat Pirates in a quest for treasure that would allow the gang to overthrow the evils of World Government. But in Indonesia, for anime fans of a particular political persuasion, the parallels with the increasingly centralised government led by President Prabowo Subianto are attractive. THE CLASH OF BANNERS And so, with Aug 17 looming, the flag under which Monkey and friends strive – a cartoon jolly roger wearing Monkey's straw hat – has become a symbol of dissent in Prabowo's Indonesia. It began slowly, with the cartoon flag appearing on the back of trucks and spreading widely online. Now, with the ubiquity of the Indonesian flag across the country this month, the appearance of the jolly roger displayed underneath the red and white has erupted into a culture war. 'The Indonesian flag is not a choice. It is a necessity. The Indonesian flag cannot be replaced,' Hasan Nasbi, head of the president's communications office, told local media on Monday. Protesters say that's not quite what is happening. The South China Morning Post published comments from one anonymous user who claimed 'The red-and-white flag is too sacred for us to raise right now, at a time when many people are still colonised by those in power.' The flag is 'the spirit of resistance against injustice'. It's a sentiment widely echoed online. POP CULTURE IN POLITICAL DISSENT Fandom of the mega-popular anime is not a prerequisite. Savvy internet users have become accustomed to pop culture references replacing explicit naming and shaming. Euphemisms for the country's government and leading political figures are a common feature of online dissent. China has seen Winnie-the-Pooh equated with Xi Jinping, for example. And in Indonesia, too, through the Joko Widodo period, 'Wakanda', the fictional country in which Marvel's 2018 hit Black Panther is based, became the name of choice for Indonesia in online discussions to critique moves that were strikingly similar to those made by the then president. As with all regulation, what 'counts' as violations and who gets to decide is slanted to favour those with power. It often reveals authorities to be deeply fearful of dissent. During Jokowi's consecutive terms, the controversial Information and Electronic Transactions Law was increasingly deployed against individuals the government accused of defamation and hate speech or displays of 'immorality'. A pandemic-era discussion about revising those laws ultimately fizzled, but by then the fear had set in anyway. Such deliberate online obfuscation has continued into the Prabowo era, suggesting it is simply now a feature of public discourse in Indonesia as long as dissent remains curtailed. PRABOWO'S STRUGGLES That pairs with another feature of the Prabowo era – the inability to ever let anything go. Prabowo's desire to be seen as a great unifier has been very successful in the parliament, with all parties now kissing the ring. This leaves the people as the sole source of opposition, and, despite a sizable win over his presidential challengers, Prabowo has found bringing the country to heel is much more difficult. Countrywide protests earlier this year clearly rattled the President. The protests, dubbed Indonesia Gelap (Dark Indonesia), focused on reforms to the military law, but soon spilled over to broader social issues including police violence and corruption. They were large, dramatic and, at times, violent. But they were also short-lived. For Prabowo, the threat lingers. He accused foreign interlopers and corruptors of bankrolling the movement during a speech at the Solidarity Party of Indonesia's conference last month. This was despite there being no large-scale demonstrations against his government for months. Which brings us back to One Piece and the cartoon jolly roger in the vicinity of Indonesia's national flag. Deputy House Speaker Sufmi Dasco Ahmad, Prabowo's right hand man and the closest we often get to what the president himself thinks, is scathing of the display. 'There is a coordinated attempt to divide the nation,' he told media on Friday. Police have warned communities across the country of crackdowns and white paint is at the ready if anyone thinks that cartoon murals are a better move than flags.
