How ‘hard mode’ became Southeast Asia’s AI advantage

In 2018, we had just launched BrandIQ on aCommerce, the ecommerce solutions platform I co-founded five years earlier.

BrandIQ (now known as EcommerceIQ) was our analytics software-as-a-service (SaaS) product. It crawled marketplaces like Shopee and Lazada to track sales, pricing, categories, and product performance over time. All the data BrandIQ gathered was neatly visualized in dashboards.

Image credit: Timmy Loen

We rolled it out across our Fortune 500 brand clients and watched the monthly recurring revenue climb. Finally, we thought, SaaS works in Southeast Asia too.

But reality hit as requests came in via WhatsApp and email. “Can you quickly pull this report for me?” “Can you summarize the key action items?” “Can you help prepare recommendations for management?”

That’s when I realized that the region didn’t actually want SaaS – at least not in the Silicon Valley sense. What people really wanted was someone to do the work for them, not software. Operational gaps created a service layer, and that became the actual product.

This shouldn’t have been surprising. Chinese SaaS had already hit many of the same walls a decade earlier, with companies often devolving into “managed services in disguise.”

Emerging markets in Southeast Asia were built on labor arbitrage for decades. Entire industries evolved around service layers, with agencies, operators, account managers, distributors, coordinators, and offline relationship managers.

Take the Philippines, for example: Business process outsourcing grew from less than 0.1% of the country’s gross domestic product (GDP) in 2000 to 8% to 9% by 2024. This was built almost entirely on the arbitrage between Western demand and Southeast Asian labor costs.

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The cultural expectation was never about getting the tools to address issues by themselves; it was always about having their problems solved for them.

For years, this was viewed as a weakness of emerging markets. Investors and founders repeatedly tried to import Silicon Valley’s SaaS playbooks into Southeast Asia, only to get confused when the unit economics did not translate.

Even the peak Covid-era startup bubble of 2021 couldn’t force mass SaaS adoption across the region.

Ironically, AI may turn this “weakness” into Southeast Asia’s biggest advantage.

Pattern matching

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