Years of unbridled growth that reaped little profit for Southeast Asia’s Internet champions—and dragged stock prices down—may finally be about to pay dividends. That’s true even amid a brutal selloff in tech shares globally.

The key reason: local market consolidation and stronger bargaining power with merchants and customers. Shares of Southeast Asian tech companies such as Sea Ltd. , Grab Holdings and GoTo Group—which have largely been off most Western investors’ radar—were punished earlier this year. But they might bounce back more quickly than better-known names such as Netflix or Amazon, given that the fundamentals of their businesses appear to be improving.

After years of burning cash in a fight for market share, the online shopping and ride-hailing segments have been undergoing something of a shakeout in 2022. For the first quarter, Grab and GoTo both cut incentives as a percentage of gross merchandise value and improved margins. Sea’s e-commerce business Shopee also logged a significant improvement in basic unit economics: Its adjusted loss before interest, taxes, depreciation and amortization per order, excluding headquarters costs, fell sharply year over year. To be sure, competition is still intense. But most of the major players are spending a bit more rationally now.

Kristine Lau, analyst at research firm Third Bridge, believes Southeast Asia’s e-commerce and ride-hailing segments have matured enough to allow companies to start cutting back incentives in many key markets. In other words, the shift makes strategic business sense and isn’t just about skittish investors’ increasing demands for profitability. Grab is the market leader in ride hailing across Indonesia, Thailand and Singapore, according to data platform Measurable AI. In the on-demand food delivery market Grab, GoTo and FoodPanda accounted for 84.8% of the total market share in 2021, according to Frost & Sullivan.

Grab and Sea saw most of their market value wiped out as part of the broader tech selloff this year. But since the companies reported quarterly numbers in May, shares of Grab are up 5%, shares of Sea have risen 23% and shares of GoTo have climbed 20%. GoTo shares have also regained most of the ground lost since the company’s April initial public offering.

Angus Mackintosh, founder of CrossASEAN Research, thinks strong revenue growth, coupled with reduced promotional spending and increased opportunities for platforms to cross-sell different products will help push valuations back up further. GoTo, a product of the merger between Gojek and Tokopedia, has recorded a 37% increase in cross-platform users. Grab is benefiting from a postpandemic recovery in mobility and has been taking market share in food delivery from smaller regional players.

Economic growth is also still looking solid in the region despite the clouds hanging over the U.S. and China. A rally in commodity prices helped Southeast Asia’s largest economy, Indonesia, grow 5.01% last quarter. Thailand, the region’s second-largest economy, grew 2.2%.

Grab and Sea are U.S. listed, meaning they are contending with the same liquidity drought that American stocks face as the Fed tightens. But with clear signs of fundamental improvement in their actual businesses, Southeast Asian tech stocks might bottom sooner than their American counterparts—and bounce back more quickly.

Write to Megha Mandavia at megha.mandavia@wsj.com