So what are the major crowdfunding trends in Asia for 2020 and beyond? Crowdfunding is yet to take off in Asia as it has in the United States. For example, while Kickstarter alone has funded 1 million startups in the US, in Asia, the numbers are only in their thousands, not more than that.
There are many regulatory hurdles that hamper crowdfunding in Asia, and factors such as the absence of a proper legal system to address the issues that may crop up during a crowdfunding campaign, have not been addressed adequately. But crowdfunding is big in Asia, especially in Singapore and China, where the market is estimated to be worth over $50 billion. So, let’s take a look at what you might expect when it comes to crowdfunding in Asia, for 2015 and beyond.
Crowdfunding Trends: Many More Innovative Projects
A large number of highly innovative projects are being crowdfunded in Asia, most of them in China. Some of the popular crowdfunding platforms are Fringebacker in Hong Kong, which has backed a lot of artists. The potential is huge given the size of the continent and the fact that most people in Asia have access to smartphones and the internet, which makes them a captive audience for crowdfunding. Mobile payments are big in China, totaling over $1.6 trillion – so smartphones could play a vital role in the crowdfunding revolution in China in the near future. What’s holding Asia back is the absence of proper intellectual property laws. Once there are in place, we expect crowdfunding to take off from there and several innovative projects to emerge.
Regulations Meant to Encourage Equity Crowdfunding Expected to be Made
Equity crowdfunding is the most profitable business model for crowdfunding, but so far it has been hampered because of regulatory restrictions. Even in the United States, equity crowdfunding will only be legalized in 2016 through the JOBS Act, so one cannot blame the Asian authorities too much for their intransigence when it comes to this. But you do have equity crowdfunding in many nations in Europe such as Italy, Spain, France and the UK. Asia has a plenty of crowdfunding platforms that are based on donations – which does not require any regulation. If crowdfunding in Asia is to catch up with the West, this is something that needs to be looked at by the authorities. To be fair, this is happening gradually with preliminary steps taken by India’s Security and Exchange Board of India (SEBI), Japan’s National Diet as well as by the China Securities Regulatory Commission (CSRC). So Asia is on the right track.
Entry of Major Companies into the Crowdfunding Industry
Typical crowdfunding trends: Many large companies have entered the crowdfunding scene in Asia. None bigger than Alibaba, China’s internet giant. Alibaba has started a crowdfunding platform called Yu Le Bao or “Entertainment Treasure”. Yu Le Bao is geared towards the entertainment industry and encourages people to invest in movies, TV shows and online gaming. Other large Chinese internet companies such as JD have also come out with their own crowdfunding platforms, called the Coufenzi. We expect many big players to enter the crowdfunding scene in China, Hong Kong, India, Japan and Singapore over the next few years.