The Asia Pacific region is seeing a major business shift with increasing numbers of new technology startups emerging, even as venture capital investment is down compared to last year. A report by Big Four accountant KPMG and international banking firm HSBC based on a survey of 6,472 Asia Pacific startups found that more than a quarter of them are related to blockchain.
Non-fungible tokens, or NFTs, led the way among sectors where Asia Pacific “emerging giants” were active, followed directly by decentralized finance, also known as DeFi. Electric vehicle charging infrastructure, quantum computing and robotic processing automation rounded out the top five sectors. Blockchain real estate and decentralized autonomous organizations (DAOs) ranked 14th and 15th, respectively, on the same list.
Despite their strong collective presence, blockchain-related companies were most common in the lower ranks. Among the top 100 emerging giants, only five were blockchain-related, and only one, Hong Kong’s Catheon Gaming, a play-to-win platform, ranked in the top 10 (in eighth place). Two crypto financial services unicorns – Hong Kong’s Amber Group and Singapore’s Matrixport – did not make the top 100.
The report looked at 12 Asia Pacific countries, which accounted for 94.8% of all surveyed companies. The majority of new technology companies were located in Mainland China (32.8%) and India (30.1%). Japan (12.7%) and Australia (8.7%) followed in third and fourth places. The report explained:
“The continued growth of Asia’s middle classes, and especially the emergence of Gen Z consumers will be the biggest single factor driving digital economies across the region. But […] Asia’s more prosperous and aging societies will also be rich sources of innovation.”
“The most successful companies focus on local specialties,” the report notes, citing “China’s capabilities in piloting and testing digital platforms” as an example. Although China has banned cryptocurrency trading, its central bank digital currency e-CNY is accepted by more than 4.5 million merchants across the country. India allows crypto trading but has complicated traders’ lives with a punitive tax regime.