Export to Southeast Asia and Latin America - RUSSOFT at the forum "Russian Industrialist 2022"

05 December 2022

On November 29 and 30, experts of RUSSOFT Association participated in two sessions dedicated to the export of information technologies to friendly countries: the rapidly developing region of Southeast Asia and the long-term partnering region of Latin America and the Caribbean for Russia.

On November 29, RUSSOFT held a session “Ways of cooperation with Southeast Asia in the sphere of high technologies”.

Session moderator Valentin Makarov, President of the RUSSOFT Association, noted that Southeast Asia is the fastest growing market in the world. This region shows a favorable attitude towards Russia, which in their eyes demonstrates the ability to be technologically independent from the United States. The countries of the Southeast Asian region also want to gain technological sovereignty and hope to achieve it in cooperation with Russia.

Nikita Ponomarenko, Trade Representative of the Russian Federation in Malaysia, noted that the Malaysian IT technology market is 25 billion US dollars, and 90% of services are transferred to digital platforms. The growth rate of the IT market for 9 months amounted to 16%.

Malaysia has developed a breakthrough technology infrastructure and support institutions. The country is interested in artificial intelligence, Big Data, Industry 4.0, Smart City technologies, e-commerce, cloud technologies and information security.

According to the results of RUSSOFT’s business mission to Malaysia (September 2022), the Trade Mission of the Russian Federation in the country is now conducting individual work with Russian companies to land their technologies in Malaysia.

“In order to gain a foothold in Malaysia, it is necessary to come up with mechanisms for permanent presence in the market through local intermediaries and active agents, so that the company’s technologies are visible, and to continue cooperation with development institutions in Malaysia,” the expert noted.

Sergey Rossomakhov, Trade Representative of the Russian Federation in the Republic of Indonesia, noted that Indonesia is attractive for its scale and size of the market, being the largest economy in Southeast Asia.

The GDP growth rate this year is projected to be 5.5%, and the number of Internet users is already more than 200 million. The digital economy in 2022 amounts to $146 billion USD. Indonesia is interested in cybersecurity, cloud technologies, artificial intelligence, Smart City technologies, especially in the context of plans to move the capital from Jakarta. However, Russian IT-businesses are not very developed in the country yet.

“We propose to create a special working group to develop and sign a roadmap for cooperation between the Republic of Indonesia and Russia in the IT industry for the next 5 years,” the speaker suggested.

Sergey Ozhegov, CEO, Serchinform (RUSSOFT member), spoke about the company’s presence in the Southeast Asian market. Now the company works with Indonesia, Thailand, Malaysia and Vietnam.

Sergey noted that when working in this region, knowing the language for communication with partners and understanding of the mentality is very important.  Success in the new market also depends on the quality of the product, training of local partners and well-structured PR and marketing.

“The company’s permanent physical presence in the market is also important, so in 2023 one of our employees will move to Malaysia to be our representative in the region, to help partners and motivate them.

In the near future, the Asian market will catch up with the US and European markets in terms of its volumes,” Sergey summed up.

Viktor Ivanovsky, head of KasperskyOS Business Development Group (RUSSOFT member), said that the growth in the number of cases of using an operation system of its own design is one of the key areas of the company’s strategy.

Victor noted the importance of building technological and business partnerships in the export region. So, Kaspersky Lab this year signed an agreement with the Chinese partner Centerm – a global manufacturer of “thin clients”, thanks to which the Kaspersky operation system has the opportunity to effectively declare itself on international markets, and in particular, on the Asian market.

According to the speaker, working with sales offices is important for all companies, regardless of their size:

“Launching a new product to a new market is very costly and comparable to opening a company, so it is very important to build effective partnerships. Building complex product, service or technological business models with their help allows you to build up from competitors in such markets,” the speaker stressed.

Oleg Glebov, Business Development Director of the Speech Technology Center (RUSSOFT member), said that the company’s AI solutions are exported to India, Vietnam and South Korea:

“The pandemic caused the growth of demand – there was a need for remote identification, contactless biometric authentication to replace traditional approaches in order to improve security, as well as interaction with customers in digital channels. So there were complex tasks of identification and analytics, improving the quality of customer service and security based on biometric data, multiplied by the actual request for digital sovereignty.

Russian solutions have already proved their effectiveness in all these tasks – the MDG Group’s biometric solutions work in Russia’s largest banks, in national-scale projects in Ecuador and Mexico, and the technologies have shown outstanding results in global technology competitions. All this stimulates interest in Made in Russia developments, especially in the Southeast Asia region, they appreciated the presence in the product portfolio of several related types of biometrics at once – facial and voice, as well as a ready—made platform for solving problems with minimal integration and installation requirements,” the speaker stressed.

Alexey Mudrakov, Project Manager for Client work of Russian Export Center JSC (REC JSC), noted that the Southeast Asian market is becoming more attractive, and there are more and more support tools. The REC can already assume that by the end of the year, the growth in the volume of supported exports to this region will amount to 15-20% compared to 2021.

Alexey shared that a pack of tools to support promotion to foreign markets through e-commerce channels is actively developing now, and REC specialists can provide consulting support for companies promoting software, among other things. But the main and most popular tool, as before, is to support the participation of companies in exhibitions and business missions – in 2022, the REC supported 2 exhibitions and 2 business missions in Southeast Asia, and for 2023, 7 exhibitions and 3 business missions are already planned.

On November 30, Valentin Makarov, President of RUSSOFT, became the moderator of the round table “Information Technologies: new opportunities for expanding cooperation” within the framework of the “Business Dialogue St. Petersburg – Latin America”.

Moderator of the plenary part of the event Tatiana Mashkova, Director General of the National Committee for the Promotion of Economic Cooperation with Latin American Countries, announced that Russia’s trade turnover with LAC countries increased by 27% in the first half of 2022 compared to the same period in 2021, and Russian exports increased by 61.9%. These indicators can be increased further if knowing what the region needs – one of these areas, of course, is the export of Russian IT solutions.

Further, within the framework of the round table, were conducted presentations of successful cases of interaction between St. Petersburg companies with the countries of the LAC region, proposals for the development of business cooperation and exchange of views on the prospects for the development of bilateral dialogue and solutions to possible problems.

The session was opened by moderator Valentin Makarov, President of the RUSSOFT Association, noting that according to the RUSSOFT 2021 study, the volume of sales in IT was more than $10 billion USD, and the countries of Southeast Asia, the Middle East and Latin America followed this indicator immediately after the developed countries and the EAEU. Indeed, Russia has historically established friendly relations with Latin American countries, and one of the reasons for that is similarity in mentality. He pointed to the existence of a “window of opportunity” for cooperation created by the risks of sanctions pressure on the countries of the region which may arise in case of entering into competition with American companies. In the context of a New (6th) technological paradigm, cooperation with Russia in the field of IT may allow local companies to participate in the competition for leadership in a New technological paradigm which is based on cyber-physical systems. And despite the fact that there are thousands of kilometers between our regions, our cooperation continues to develop. The speakers of the round table talked about this experience and its future.

Rodrigo Quevedo, President of the Chilean Robotics Association “ROBOTICS LAB”, in his speech emphasized the importance of building long-term relations between our countries that will not depend on continuously changing external conditions, especially political ones. He also pointed out the existence of a difference in business approaches between Russian and Chilean companies.

Sergey Ozhegov, CEO of Serchinform (RUSSOFT member), shared the company’s experience in the region and how the approach of doing business abroad has changed:

“We started working in Latin America back in 2017, and now we have customers in most of its countries. Recently, we have begun to find partners not only to sell solutions, but also to work on the MSSP model. We provide our partners with information about products and best practices of application. Thus, the customer works with a local outsourcer, whom he trusts, and receives protection with the help of advanced Russian-made software. We want to continue developing in Latin America in this direction,” the speaker said.

Together with Sergey, Ricardo Martinez, head of the representative office of Serchinform in Latin America (Argentina), described the experience of a new format of work on the part of a foreign partner of the company.

Oleg Glebov, Business Development Director of the Speech Technology Center (RUSSOFT member), spoke about many years of work in the region and how its strategy is changing now:

“AI solutions based on speech technologies and voice biometrics have been working in Latin America for more than 15 years. Today, Brazil and Mexico form the key demand for Russian technological solutions.

The Speech Technology Center is now concentrating on strengthening the status of a key technology partner and trusted supplier of AI solutions, developing not geographically, but in depth of the target region, which represents great potential.”

Andrey Yakovlev, CEO of BrainSystems LLC (RUSSOFT member), spoke on using digital healthcare to unite our regions:

“The use of IT in ensuring public health allows us to solve problems most effectively. At this point, almost all jobs in the Russian healthcare system are digitalized, which gives us the opportunity to share this experience with partnering countries.

We pay special attention to the work of doctors so that they have the opportunity to conduct routine examinations effectively and use the collected data for further analytics. This formalization allows doctors in different countries to exchange data and experience, as translation becomes easier.”

Summing up the sessions, Valentin Makarov stressed that “the strategic task of the country is to become the leader of a New technological paradigm, and now it is important not to miss the opportunity to enter the global market. Therefore, RUSSOFT is waiting for the approval by the Ministry of Digital Development, Communications and Mass Media of the Russian Federation of the “Roadmap of measures to support IT exports, which describes the strategy and the main steps to promote exports.”

“First of all, IT is necessary to give IT export the status of one of the priorities of the National Digital Economy Program. This will give the industry the opportunity to use the full range of tools, financial and non-financial measures, to support the export from the Russian Export Center. It is necessary to finally decide to create a payment and financial ecosystem that will allow financing this process independently of SWIFT and the USD. And it is necessary to use digital financial assets, for instance, cryptocurrency, at least outside the territory of Russia, to pay for export contracts.

I believe that the export of IT services should be given the status of one of the priorities of foreign trade policy, along with the export of goods. In addition, it is important to take into account the mentality and culture of new markets and work on a business model that develops the trust of local partners from friendly countries,” Makarov concluded.

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