Having recently returned to the US after 2 years in Asia, I’m often asked about the Asian tech landscape. Do Asians use smartphones? Is Amazon.com in Asia? Why do Japanese people always make the victory sign in photos?

Asia is fantastic and complex. There is so much opportunity in the digital marketing / Internet / startup space. I had the fortune of working with a variety of cool companies including digital agencies, early stage startups, VCs and medium sized Internet companies. In many ways the tech landscape is not that different that what we see in silicon valley, but in many ways its completely different.

Asia is huge and growing like crazy

Pop quiz, what is the fourth largest country in the world? Indonesia at 237 million people. That’s a lot of people. Indonesia is almost as large as the US (313 million people). Indonesia has more people than Brazil (192 million).

About 2/3 of the world’s population lives in Asia. And Asia is growing faster than most regions, especially in urban areas. Most importantly, many countries in Asia have growing middles classes that are spending disposable income on things like technology. This makes them a hot target for multi-national consumer companies. Indonesia, the Philippines, Thailand and Vietnam are all large, emerging economies.

Lots of people does not mean lots of paying customers

One important insight is that a large population base does not necessarily mean a profitable customer base. Indonesia, while massive, is complex – made up of 17,000 islands and still lacking robust infrastructure, Indonesia struggles with its share of growing pains. Many withering companies like RIM and Path have boasted that they are hot in Indonesia — which can be the kiss of death. Indonesians may adopt phones quickly and spend a lot of time on free social networks, but they may not necessarily show any brand loyalty in the long run.

Before Facebook caught on in the Philippines, Friendster was deeply entrenched among Philipinos. And how did that work out?

“The best thing you can say about Path is it’s huge in Indonesia. The worst: The company seems to have accepted this as its fate. “ – Pando Daily

Asia is all about mobile

It would be a mistake to think that Asians don’t have as many smartphones as the western world. Asians LOVE smartphones; both iPhones and Android. Asian countries do not have a desktop-centric history like western countries. Many Asians buy smartphones, phablets, or tablets as their first and only computer. Smartphone penetration is at 87% in Hong Kong and Singapore, with emerging countries not nearly as high, but with plenty of room for growth: Thailand: 49%, Indonesia: 23%, India: 18%, and the Philippines: 15%. The US is at 70% smartphone penetration, for reference.

What do Asians do with all those smartphones? Mostly chat, but also lots of social media, dating, and gaming. Bangkok is Instagram’s top location. Chat apps have a total of ~1.5 billion users worldwide, and most of those apps are huge in Asia (WeChat in China, Kakaotalk in Korea, and LINE in Japan). And these chat apps have found lucrative revenue streams from selling stickers and cross-selling games.

Ecommerce is basically non-existent in Southeast Asia

Asia is exceedingly diverse and fragmented which makes ecommerce difficult. Made up of 14 regions separated by languages, countries, and culture, cross-border logistics can be challenging for would be Amazon imitators like Japanese contender Rakuten. Ecommerce sales are less than 1% of retail sales in most regions, with the exception of Singapore (1%). The US is 6.4%, for reference.

Craigslist and eBay are ghost towns in Southeast Asia. The yard sale culture has yet to grow significantly, although startups like Singapore-based Carousell have had some success with a mobile-centric peer-to-peer ecommerce model.

Ecommerce has struggled to gain traction in Southeast Asia mostly due to a lack of standardized payment methods (credit cards or Paypal) and lack of streamlined logistics. But an even more important ecommerce blocker may be the local shopping culture itself. People spend much of their time in air-conditioned shopping malls in Southeast Asia because it’s hot and humid all the time. Malls are integrated with public transportation stations, and all basic services like banking, movie theaters, and grocery stores are embedded in local malls. And malls are everywhere.

Asia is the real deal, but the technology landscape has its points of friction. The challenges I’ve mentioned here are not insurmountable. Far from it. It’s important to realize how quickly things change in Asia. Very quickly.