How digitalization is making South and Southeast Asia engines of growth
来源:World Economic Forum;发表于:2022-04-21;人气指数:329
How
digitalization is making South and Southeast Asia engines of growth
https://www.weforum.org/agenda/2022/02/digitalization-south-southeast-asia/
The digital
transformation of South and Southeast Asia is opening a range of opportunities
for its citizens.
Image:
Reuters/Shailesh Andrade
10 Feb 2022
Azaz Zaman
Assistant Professor,
Bangladesh Army International University of Science and Technology
*The burgeoning
digital economy led the pandemic recovery in South and Southeast Asia.
*Heavy smartphone
penetration is facilitating digitalization in these regions.
*Greater government
support is needed to advance the digitalization process.
Digital transformation
worldwide was already increasingly changing how companies make and offer
their propositions and interact with their customers. But the COVID-19
pandemic has intensified this, with technology emerging as a critical means
of resolving public health challenges and continuing to facilitate the
new online consumer landscape. This accelerated digitalization is disrupting
the world’s economy, making it one of the most significant growth engines
for many developing nations.
We are already seeing
how digitalization is reshaping Asia. The digital transformation of South
and Southeast Asia is opening a range of opportunities for its citizens,
especially for younger generations. Many Asian countries are even in the lead globally
in certain sectors of digitalization. For example, the Philippines and Malaysia
have become the top two countries in e-commerce retail growth, increasing by
25% and 23% per year, respectively.
Asia countries are
performing impressively on e-commerce growth
Image: eMarketer
What’s more, with the
advent of rapid digitalization, Asian countries like India, Bangladesh,
Pakistan and the Philippines are tapping new opportunities by exporting online
labour to the West. In Bangladesh, for example, the digital economy is
bringing employment to hitherto excluded sections of the population.
The pandemic effect
During the COVID-19
pandemic, digital connectivity in Asia played a vital role in overcoming the
difficulties of conventional trade. The digital economy acted as a key enabling
factor in the Asian recovery, Observer Research Foundation reports. According
to Nikkei Asia, the pandemic has had a striking impact on Southeast Asia’s
digital economy: 60 million people in the region became online consumers during
this period. With this accelerated uptake of technology, there was an increase
in nearly all e-commerce during the pandemic, with solid growth in sports
equipment and supermarket items.
The pandemic had a
beneficial effect on most areas of e-commerce
Image: Datareportal
Asia now accounts for
nearly 60% of the world’s online retail sales. Asian-Pacific e-commerce is
expected to nearly double by 2025, reaching $2 trillion, according to
Euromonitor International. From online retail to ride-sharing services to
exporting online labour, this digital boom is reshaping almost every
aspect of business and social life in this region.
The smartphone
gateway
Asia, the most
populous continent, has the most significant number of mobile phone users
globally; around two-thirds of people use mobile services, and there is
still room for further expansion. The fastest growth rates are in South and
Southeast Asian countries.
Despite high
smartphone penetration in South and Southeast Asia, there is still room for
growth
Image: GSMA;
Datareportal
The use of
smartphones is quite common across most emerging economies. Countries like
Singapore (87%), Malaysia (83%), and Thailand (75%) have comparatively higher
smartphone penetration. However, in the case of smartphone market growth in
2020, the Philippines has the highest increase: over 90%. Similarly, according
to GSMA, the consumption of mobile data in South and Southeast Asia will
increase by three times by 2025, from 9.2 GB to 28.9 GB per month per user.
The UN-ESCAP reports
that Asia is the fastest-growing region in the global e-commerce
marketplace. In fact, the graph below shows that around 78% of Asia’s $2.448
trillion of e-commerce retail sales take place via mobile phones.
Global e-commerce
sales in 2020; mobile phone e-commerce as a proportion of total e-commerce
Image: eMarketer
Southeast Asia leads social
media
Social media has been
another driving force in digitalization on the continent – but the penetration
rate in Southeast Asia is much higher than that of in South Asia. For instance,
Malaysia has the highest social media penetration rate (81%) in Southeast Asia,
followed by Singapore (79%); the Philippines (67%) and Indonesia (59%) also
feature strongly. But, in South Asia, the highest-ranking nations, India and
Bangladesh, only have penetration rates of 29% and 22%, respectively.
Southeast Asia is
beating South Asia for social media use
Image: Datareportal
In terms of duration,
the Philippines spends more time on social media than other countries in the
region: approximately three hours and 53 minutes daily.
Daily social media use
in South and Southeast Asian countries
Image: Globalweb
Index
The rise in digital
consumption
Four factors have
contributed to the rapid growth in digital consumption in South and Southeast
Asia. Firstly, a vast youth population who are digital natives has
significantly contributed to the growth of the sector. Secondly, the rapid
adoption of financial services accessible via smartphones is helping millions
of people make digital payments. Thirdly, with such high mobile penetration in
the region, consumers regularly use e-commerce and social media sites to buy
products and services. In fact, McKinsey & Company estimate that the
proportion of digital payments in Asia will be at 65% in 2024 (against an
average of 52% globally), making the continent the world’s consumption
growth engine.
The growth in Asian
digital payments is driving the region's economies
Image: McKinsey &
Company
Finally, most
governments in South and Southeast Asian countries have introduced supportive
policies to boost the digital economy and infrastructure.
Asia’s digital
horizon
There is no doubt
that South and Southeast Asia are experiencing rapid digital growth. However,
to achieve the region’s maximum potential, several areas need to be improved:
digital infrastructure; new consumer development; information security; and
effective digital policy. Moreover, many experts currently argue that digitalization
is favouring individual consumers, not SMEs.
The region should
adopt more cross-country collaborations, such as Go Digital ASEAN. These
kinds of initiatives undeniably broaden the landscape of the digital economy
and boost related infrastructures in the region. Meanwhile, national-level
strategies like India’s National Digital Communication Policy (2018), 1st
Policy for Digital Pakistan (2018), and Bangladesh’s National ICT
Strategy need to be fully implemented and monitored as an utmost priority.
Finally, South and Southeast Asian governments should foster a more sustainable
digital ecosystem by promoting digital start-ups, removing entry barriers,
developing human capital, and establishing national regulatory frameworks for
the digital economy.