Nurturing Digitalization

Digitalization is happening at breakneck speed, and Asia is proving to be one of the most dynamic movers of this global digital transformation. The region is experiencing an unprecedented surge in digital adoption across various sectors, reshaping economies, societies, and businesses. The pace of digitalization in the region bodes well for Asia’s future, as it looks to recover from the global pandemic crisis.

There are now a staggering seven billion smartphone users in the world. In 2020, 55% of the global smartphone population hailed from Asia. China alone boasts about 912 million smartphone users, while India follows with 439 million users. Mobile internet has become the primary gateway to the digital world for millions of Asians, enabling them to access services, information, and opportunities like never before.

The e-commerce sector is also booming rapidly in the region. Asia is home to some of the biggest e-commerce players. Jingdong, popularly known as JD.com, is China’s e-commerce giant and the world’s second largest e-commerce company after Amazon. Of the top 10 e-commerce companies in the world, Asia boasts the greatest number of e-commerce companies in terms of market capitalization. Other than JD.com, the list features four other Chinese e-commerce miracles—including Alibaba, Meituan, Suning.com, and Shein—and one Japanese e-commerce company, Rakuten. These e-commerce platforms are reshaping the retail landscape in the region, while creating new business opportunities for small enterprises and providing jobs to thousands of people.

The pandemic kickstarted a rush to digitalize globally and this was quite evident in Asia. From 2019, an additional 100 million internet users were added in Southeast Asia alone. Notwithstanding the macroeconomic impacts brought about by the pandemic, the region crossed over US$200 billion in gross merchandise value in 2022. Southeast Asia’s digital economy is on track to register a growth of US$300 billion by 2025 and US$600 billion to US$1 trillion by 2030. 

The era of digitalization brings many benefits for businesses, governments, and individuals alike. The important question here is how Asia will optimize this once-in-a-lifetime opportunity, while closing the digital divide and driving greater sustainability and inclusivity for all.

This forms the crux of one of the sessions being discussed at the upcoming Horasis Asia Meeting, scheduled to take place in Binh Duong, Vietnam between 3-4 December 2023. The gathering will bring together 300 CEOs, entrepreneurs, and prominent government representatives from Southeast Asia and beyond. The primary focus of this meeting will be to delve into key trends that are set to influence Vietnam’s economic advancement, steering it towards an exciting new chapter of global growth.

Businesses Need to Up their Game

Asia has emerged as a vibrant hub of digital innovation within the global banking and finance sector. From building core infrastructure to customer-facing interfaces, to introducing frictionless payment solutions and enhanced credit experiences, financial institutions across Asia are leveraging the capabilities of AI and digital banking technologies to maintain their competitive edge. 

Singapore, in particular, has taken a lead role in this digital transformation. The Monetary Authority of Singapore made a significant move by granting four digital bank licenses in December 2020, consisting of two full banks and two wholesale banks. This forward-looking approach is mirrored in similar developments across Malaysia and the Philippines, where licensing frameworks have been approved, opening the door for up to five digital bank licenses.

Vietnam’s government is embarking on an ambitious task of digitalizing its government and economy. The digitalization plan outlines goals for digital infrastructure, e-government, and the digital economy and society. To digitalize its public services, the Vietnamese government is planning to increase the rate of online public services to 80%, while aiming to boost the rate of digitalizing dossiers and results of administrative procedures to 100% by 2023. Simultaneously, it has set a target of increasing use of e-invoices among enterprises by 100% and use of e-contracts by 50%. 

Future Need

As Asia embraces a future defined by resilience and connectivity, collaboration and innovation will be key to extend the realm of digital transformation. Collaboration between governments and key stakeholders will be crucial to extend connectivity to remote and underserved areas, ensuring broader online access. In this pursuit, innovative solutions in digital infrastructure play a pivotal role. Notably, solutions like Huawei’s RuralStar have effectively tackled the technical challenges associated with connecting remote regions.

RuralStar, a compact system that can fit into a backpack, offers a remarkable solution. It can be easily installed on standard wooden or steel poles without requiring a “line-of-sight” connection to other nodes. This adaptability makes it exceptionally well-suited for challenging terrains such as deserts, mountainous landscapes, and rural valleys. Even better, RuralStar is remarkably energy-efficient, consuming no more than five lightbulbs’ worth of power. Since its inception in 2017, RuralStar has been deployed in over 110 networks globally, extending the benefits of digital technology to millions of people in remote areas, many of whom are accessing such technology for the first time.

Tightening financial conditions, reduced global demand for exports, and China’s unexpected slowdown are dimming the economic outlook for Asia. The region will need to build its efficiency in digital technologies to boost productivity. Facilitating equal access to technologies across firms, industries, and workers will help Asia fully benefit from the economic boost that digitalization offers.

Photo Caption: Digitalization is advancing rapidly across Asia.