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Asia Tech Research: Asia Matters 4/4 (The Digital Frontier)
The 'Digital Frontier' report from Asiatech Research highlights rapid digital growth in Asia, with China and Southeast Asia as key drivers. China's digital economy is projected to create 415 million jobs by 2035, while Southeast Asia's online landscape, fueled by risk capital, is becoming the third largest region for internet users globally. The report underscores significant impacts on various sectors, particularly e-commerce and travel, due to the expansion of Asia's middle class.
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Asia Tech Research: Asia Matters 4/4 (The Digital Frontier)
- 1. the digital frontier REPORT 4 ASIATECH RESEARCH TheDigital Frontier
- 2. #asiamatters ASIATECHRESEARCH Graham DBrown Report Author Thanks for reading my #asiamatters Report “The Digital Frontier”.To learn more about what I do, and get regular updates and insights from my Asian research, connect with me on Linkedin. Connect with me on Linkedin
- 3. download them freefrom www.AsiaTechResearch.com #asiamatters Get All 4 Reports in this Series ASIATECHRESEARCH
- 4. There are morepeople living inside that red circle than outside it #asiamatters Asia’s Digital Frontier ASIATECHRESEARCH
- 5. #asiamatters ASIATECHRESEARCH Asia’s digitalfrontier is evolving fast, but not all markets at the same velocity. There are 2 key stories behind the speed of change to focus on in 2018.
- 6. These two regionsare driving the bulk of growth in Asia’s internet economy #asiamatters It’s a tale of 2 key drivers… ASIATECHRESEARCH 1. China 2. Southeast Asia
- 7.
- 8. 48% of GDPand 415 million new jobs in next 20 years #asiamatters China’s Digital Economy Explodes ASIATECHRESEARCH China’s digital economy, already home to the world’s largest population of internet and smartphone users, is likely to create 415 million jobs by 2035, bolstering technology’s share to 48 per cent of gross domestic product, according to forecasts by the Boston Consulting Group and AliResearch Institute. - South China Morning Post 10 Jan 2017
- 9. E-Commerce in Chinais happening on a scaleThe West has never seen #asiamatters Chinese E-Commerce Delivers… ASIATECHRESEARCH
- 10. China continues todominate, and its share of trade is growing #asiamatters China: >50% of World E-Commerce ASIATECHRESEARCH 0 10 20 30 40 50 60 0 500 1000 1500 2000 2500 3000 2016 2017 2018 2019 2020 2021 China ecommerce sales % of worldwide SOURCE:ASIA TECH RESEARCH BASED ON EMARKETER DATA 2017
- 11. #asiamatters ASIATECHRESEARCH China hasleapfrogged the rest of the world in E-Commerce volume.With fewer legacy retailers than the West, Chinese stores and Chinese consumers have gone straight to digital.
- 12. ChineseVideo Market grows1000% in 6 years #asiamatters Online Video in China ASIATECHRESEARCH BillionsofRMB 0 20 40 60 80 100 2012 2013 2014 2015 2016 2017 2018 Annual market revenues SOURCE:ASIA TECH RESEARCH BASED ON IRESEARCH DATA 2017
- 13.
- 14. Even the world’ssmartest internet company underestimated Southeast Asia #asiamatters Southeast Asia digital adds $3 trillion ASIATECHRESEARCH 0 1500 3000 4500 6000 2015 2017 2019 2021 2023 2025 base worst best SOURCE:ASIA TECH RESEARCH BASED ON GSMA,WORLD BANK, IMF, ITU, DELOITTE,TELENOR,AT KEARNEY DATA FORECASTS FOR ASEAN DIGITAL ECONOMY 2015-2025
- 15. #asiamatters ASIATECHRESEARCH Key tothe growth of Southeast Asia’s digital frontier is the movement of Risk Capital out of China into regions seeking Outsized Returns.Alibaba, TenCent etc will be key to Southeast Asia’s growth in the next 5 years.
- 16. Future growth willonly be accelerated by the shift of Risk Capital out of China #asiamatters Southeast Asia beats expectations ASIATECHRESEARCH Southeast Asia is now the world’s third largest region for internet users — with more people online than the entire U.S. population — and internet is having a bigger impact on the region than originally thought, according to a new report co-authored by Google. -Tech Crunch 12 Dec 2017
- 17. 2 Categories accountfor >2/3rd of Southeast Asian transactions #asiamatters Travel and E-Commerce drive SEAsia ASIATECHRESEARCH 0 50 100 150 200 250 2015 2017 2025 Ride Sharing Online Media ECommerce OnlineTravel SOURCE: GOOGLE TEMASEK DATA 2017 SOUTHEAST ASIA E-COMMERCE MARKET VALUE BY CATEGORY ($ BILLIONS)
- 18. There are morepeople living inside that red circle than outside it #asiamatters E-Commerce in Southeast Asia ASIATECHRESEARCH 0 25 50 75 100 2015 2017 2025 $88.1bn $10.9bn $5.5bn Annual estimates SOURCE: GOOGLE TEMASEK DATA 2017
- 19. There are morepeople living inside that red circle than outside it #asiamatters E-Commerce Southeast Asia 2025 ASIATECHRESEARCH Indonesia Thailand Philippines Myanmar Vietnam Singapore $5.4bn $7.5bn $8.2bn $9.7bn $11.1bn $46bn SOURCE: INTERNATIONAL MONETARY FUND 2018
- 20.
- 21. Millions of 4GMobile Connections 2015-2020E #asiamatters Half the World’s 4G Mobile Connections ASIATECHRESEARCH 13% 21% 3% 3% 3% 56% SOURCE:ASIA TECH RESEARCH BASED ON CISCO DATA 2016 2015 13% 13% 7% 7% 8% 52% 2020
- 22. Heaviest users inSoutheast Asia #asiamatters Asia leads Mobile Social Media ASIATECHRESEARCH SouthEast Asia China USA UK Japan 1 hrs 1.8 hrs 2 hrs 3 hrs 3.6 hrs SOURCE: GOOGLE TEMASEK DATA 2017 Average hours mobile social media per day
- 23. Young Indians amongstthe highest users of mobile-only internet #asiamatters India leads Mobile First ASIATECHRESEARCH India Malaysia China 37 % 41 % 46 % SOURCE:ADOBE 2017
- 24. Middle Classes drivesocial media usage in developing economies #asiamatters The Middle Classes and Social Media ASIATECHRESEARCH China Brazil USA UK France India Germany 20 % 23 % 26 % 30 % 30 % 33 % 51 % SOURCE:ASIA TECH RESEARCH BASED ON DALIA RESEARCH DATA 2017
- 25.
- 26. Invests US$2.9 bnin massive tech-fuelled supermarket chain #asiamatters AliBaba Drives Innovation ASIATECHRESEARCH There are chefs in-store ready to cook up what you buy, which you can then eat in the canteen
- 27. % Annual RetailSales Growth 2015-2018 by Regio #asiamatters Asia Drives Global Retail Sales ASIATECHRESEARCH APAC LATAM MENA NAM EUR WORLD 3.4% 0.9% 2.6% 4.3% 3.8% 4.9% 3.3% 1% 2.5% 4.6% 3.4% 4.8% 3.2% 0.9% 2.4% 3.9% 3.4% 4.8% +2.9% +0.8% +2.5% +2.9% +2.4% +4.6% 2015 2016 2017 2018 SOURCE: ECONOMIST INTELLIGENCE UNIT 2015
- 28. 7Fresh stores featurethese self-steering carts that follow you around #asiamatters JD Retail Innovation ASIATECHRESEARCH
- 29.
- 30. #asiamatters ASIATECHRESEARCH To reallyunderstand the impact of Asia on the digital world. we must first look at the main driver of change:Asia’s growing Middle Classes…
- 31. #asiamatters ASIATECHRESEARCH If Chinapursues the structural reforms and technological upgrading needed to maintain rapid economic growth, its middle class should exceed one billion people in 2030, up from 157 million in 2009. - Lee Jong-Wha, Huffington Post
- 32. #asiamatters China will have5x as many Middle Class Households as the US by 2020 ASIATECHRESEARCH MiddleClassHouseholds(millions) 0 100 200 300 2012 2020 5252.5 249.5 135.5 SOURCE:ASIA TECH RESEARCH & OXFORD ECONOMICS
- 33. E-Commerce,Travel and Lifestylekey beneficiaries of growth #asiamatters Middle Classes drive Mobile ASIATECHRESEARCH
- 34. Almost all ofthe next billion middle class consumers will come from Asia #asiamatters Asian Middle Classes are Exploding ASIATECHRESEARCH
- 35. #asiamatters ASIATECHRESEARCH The vastmajority (88 %) of the next billion people in the middle class will be Asian. - Brookings Research 28 Feb 2017
- 36. % compound annualgrowth rate (CAGR) 2001-2016 #asiamatters Annual Retail Sales Growth ASIATECHRESEARCH China Vietnam Malaysia India Thailand Philippines Hong Kong Indonesia Taiwan USA South Korea +1.9% +2.7% +2.9% +4.7% +4.8% +5.9% +6.3% +7.1% +7.5% +9.3% +12.3% SOURCE: OXFORD ECONOMICS, DELOITTE SERVICES
- 37. #asiamatters ASIATECHRESEARCH In mygrandfather’s day, setting up a business is about survival, and today it is about improving standards of living, like buying properties, taking a holiday, the next generation of iPad, Ferrari and Porsche. People are creating better lives for themselves - Kennedy Cheng, CEO of Lxpert
- 38. 2018 revenues morethan USA and Europe combined #asiamatters China leads online fashion sales ASIATECHRESEARCH FashionSales$USBillions 0 50 100 150 200 250 300 2016 2017 2018 2019 2020 2021 285.3 260.5 228 193.9 159 125.8 140.5 130.8 119.2 107.7 96.7 86.8 96.490.383.876.869.863.3 USA Europe China
- 39. Source: China Daily2016 #asiamatters China has 100 million registered pets ASIATECHRESEARCH
- 40. Market doubles in5 years #asiamatters Digital Travel Sales in APAC ASIATECHRESEARCH 2014 2015 2016 2017 2018 2019 $242.6bn $214.9bn $189.7bn $163.9bn $139.1bn $116.1bn SOURCE: ASIA TECH RESEARCH, EMARKETER, SKIFT Market value of online & digital travel sales in Asia Pacific 2014-2019 (forecast)
- 41. A major beneficiaryof the growing Asian middle classes #asiamatters Online Travel Southeast Asia ASIATECHRESEARCH MarketValue Ground transport Hotels Airlines SOURCE:ASIA TECH RESEARCH , SOJERN MARKET VALUE OF ONLINE TRAVEL CATEGORY IN SOUTH EAST ASIA 2015 - 2025 (FORECAST) 2015 2025E $13.1bn $36.4bn $40.1bn $12.5bn $6.6bn $2.5bn
- 42. Asians are increasinglyseeking travel experiences within Asia #asiamatters Middle Class + Sector Competition ASIATECHRESEARCH “Asia Pacific is a region that is seeing tremendous growth and experiencing a travel boom with the rise of a more affluent middle class, and lower cost of travel.” - Bart Bellers
- 43. Total compound annualgrowth 2016-2021 % #asiamatters FMCG Market Growth ASIATECHRESEARCH Myanmar Vietnam Indonesia China Philippines Thailand Hong Kong Malaysia Singapore Japan 1.9 % 4.1 % 6 % 6.3 % 6.7 % 8.1 % 8.4 % 10.1 % 10.9 % 12.5 % SOURCE:ASIA TECH RESEARCH BASED ON EUROMONITOR, IMF AND ROLAND BERGER DATA 2018
- 44. #asiamatters ASIATECHRESEARCH Graham DBrown Report Author Thanks for reading my #asiamatters Report “The Digital Frontier”.To learn more about what I do, and get regular updates and insights from my Asian research, connect with me on Linkedin. Connect with me on Linkedin
- 45. download them freefrom www.AsiaTechResearch.com #asiamatters Get All 4 Reports in this Series ASIATECHRESEARCH