The Association of Southeast Asian Nations (ASEAN) region is the fastest-growing digital economies in Asia. The ASEAN is driven by government initiatives that support the digitalization. There has been a rapid increase in the popularity and use of the Internet. This has led to advances in technology, which has contributed a lot to the flourishing of the Asia Pacific’s digital economy. However, the digital transformation pace is accelerating, but it exposed Asia pacific with increased risks and vulnerabilities.
ASEAN is facing pressure to ensure that the compliance is aligned with the stringent regulations and the enterprises are also interested in partnering with the experts in the industry. They want to partner up with the security service providers (MSSPs) that can help to manage the security operations in a better way. This has embarked on the digital transformation journey. In the years to come, the enterprises will need to get involved with the MSSPs using a hybrid model. The combo of the hosted services for security and the customer-premises equipment (CPE) management will improve the security operations during 2020-2023. This will also help provide businesses with flexibility and efficiency.
The Thai and Vietnamese governments have launched the Cybersecurity Act in 2020 to face these issues. The ASEAN countries are also starting to review the data security policies in their regions. Thailand has introduced a Personal Data Protection Act in 2020. Malaysia and the Philippines are also planning to roll out their plans to improve cyber resilience in 2020-2023. This will help to make the internet and communication systems more secure and safe.
The AESAN has also provided reports on the market growth analysis. This case study highlights the key drivers that will help manage the digital transformation in 2020-3023. The lack of cybersecurity professionals and the risks of cyber attacks are growing and are a significant threat to the enterprises and governments’ landscape. The risk revolving around the security and creating awareness among the end-users in the region will be implemented.
Market trends have been analyzed from the year 2017 to 2023 and by taking 2020 as the base year, the digital transformation trends will be set. The digital transformation trends shaping ASEAN’s economy in 2020-2023 will be the key focus of this study. The segmentation will include all the sectors of the top industries that will consist of the pharmaceuticals, retail, energy, mining, agriculture, eGaming, eCommerce, and more.
- In the year 2020-2023, ASEAN will have the honor to become the world’s fourth-largest economy, which amounts to roughly USD 4 trillion in the consumer market. We will see the entire region growing digitally and will witness various digital growth opportunities. Each big market and top industries will be evolving differently digitally.
- The critical digital consumption themes will evolve and emerge. Some of the trends that have faced a setback COVID-19 pandemic will be growing in the coming year.
- In particular, COVID-19 has changed the shopping behavior in the ASEAN region. This has radically going to speed up the evolution of the digital shopping behavior of the consumers. During 2020-2023 the digital shopping experience of the consumers might improve a great deal.
While COVID-19 has caused a significant economic loss and impact, ASEAN has also witnessed potential GDP contractions in 2020. These effects are likely to spill over to 2021. The long-term fundamentals of ASEAN member states are on the brick of taking a tremendous leap towards the digital transformation and moving forward in the socio-economic progress. From 2020-2023, the ASEAN region will be emerging digitally and will take the world by storm by becoming the world’s fourth-largest economy.
The digital transformation will help in garnering the USD 4 trillion in the consumer market. While each of the ASEAN member states that include ten countries will be evolving differently when it comes to digital transformation, all nations will be getting abundant growth opportunities in digital transformation.
The Future of digital transformation and consumption in Consumer Markets has embarked on a new journey for the member states. They will be leading a project which they have created with collaboration with Bain & Company. The project will be focused on the emerging markets that are aiming at digital transformation. The member states participating in the will consist of nations that comprise 40% of the world’s population.
For now, the ASEAN region is suffering from health, humanitarian, and economic crisis, and this has resulted due to the effects of the COVID-19 pandemic. A majority of ASEAN CEOs have surveyed and have predicted that the COVID-19 restrictions will last a few months more, and the economic recovery can be expected in mid-2021. The next years including 2021 till 2023 will have a better and bright future for the people living in the Asian region.
The pandemic has caused a lot of noticeable changes in the behavior of the consumers. Some of these changes have brought short-term volatility, and consumer relationships and the spending patterns will have a long-term effect.
These are the predictable digital transformation trends that will be shaping ASEAN 2020-2023 economy.
Consumer spending will double, driven by ASEAN’s middle-class boom
COVID-19 will trigger the looming recession, and this will dampen consumer sentiments. They have reduced the overall expenditure in the year 2020. The consumers’ behavior will self-correct because the ASIAN region’s economies will be moving into recovery in the coming years. The Asian Development Bank (ADB) has estimated that the Southeast Asian annual GDP growth has fallen to 1% in the year2020 but is expected to rebound to 5% in 2021. However, by 2023, 70% of the ASEAN region population is expected to have a middle-class living.
Boundaries of premium and value shopping will blur
Consumption behavior in the region has changed because many communities have gone through quarantine across the ASEAN nations. Disaster-preparedness has arisen, and the daily essentials also have spiked, which has given rise to online shopping. This has resulted in the evolution of digital transformation in the field of online stores. The luxury and non-essential items have experienced a dip, and we might see a slow recovery in the year 2021. The Goods that are focused on convenience and are required for well-being will see a high demand persist, and post-recovery will also see a rise in these products’ demand.
In 2020-2023, many of ASEAN’s consumer class will plan to repurchase their luxury products and might also be willing to pay a premium for their convenience. At the same time, consumers will also be seeking more value for money. The 60% of high-income consumers that have been surveyed by Bain in 2020 have not made a premium purchase.
Digital ubiquity will become the norm
The pandemic has been promoting and accelerating the digital future in the ASEAN region. Many consumers have made their first digital purchases in 2020, and the consumers have been spending a lot of time shopping online. Due to the ease and convenience of online shopping, this trend will continue growing in the coming years. The total online streaming time using mobile phones has grown up to 60 percent this year across the region.
In Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, the consumers have clocked an average of 4.2 hours of spending their time online on their mobile devices daily. The younger generations have been spending up to 5 hours, which will give rise to the trend of digital transformation. The abundance of detail and the information will accentuate the consumer repertoire behavior. Consumer research has revealed that roughly 65% of the consumers will switch brands if their favorite brands are no longer available.
Technology will tear down socio-economic walls
The COVID-19 pandemic will be promoting the digital transformation process, and the governments and businesses will strive hard to provide the connectivity and the essentials to the vulnerable communities. When the rural and low-income communities start to gain access to the digital world and experience the digital world like their urban and higher-income counterparts, this will make the digital transformation grow. This will also help to homogenize the consumer behavior. More and more consumers will prefer to use e-wallets, and the consumers will start to shop digitally up to three times more till the year 20203.
Local and regional competitive winds will prevail
80% of Indonesia’s consumers are interested in purchasing goods from local brands and do not prefer global brands, especially when it comes to food categories. The trend will continue, but the online shopping will continue. During COVID-19, the local food and beverage conglomerates enjoy an advantage because they prefer large and trusted brands. The local brands will use new technologies to match up with international brands and provide more security. The continued trend of Korean, Japanese, and Chinese brands gaining popularity will continue.
Shoppers will move beyond omnichannel to expect omnipresence
The pandemic will be expediting the shift, mainly in the categories of the consumer groups that were more resistant to e-commerce. COVID-19 has made the older consumers make their first online grocery purchases, and the older adults have also enjoyed the convenience of home delivery using online services. This is the first step towards digital transformation growth and has made a change in the channel preferences. Overall, e-commerce will grow at double-digit rates from 2020-2023. The digital financial services and the last-mile delivery for e-commerce will flourish further in the coming years.
Convenience will be the new currency
Most urban consumers in the ASEAN region consider comfort as their criteria for purchases. Most consumers are also ready to give up data privacy to have convenience. These findings and studies have revealed a considerable chance that the “super-apps” and FinTech will grow significantly, and verticals such as shopping and food delivery will also increase.
Sustainability will be non-negotiable
While 80% of ASEAN consumers’ value sustainability and want to consume safe and reliable goods. They have changed their lifestyle and have become more eco-friendly.
The pandemic has triggered a short-term adverse effect on sustainability trends. The businesses across ASEAN will be aiming at sustainability goals, and they will be focusing on jumpstarting the economy using digital technologies. The telework has given the organizations a chance to reduce travel and has allowed the employees for greater flexibility. This has also helped in reducing air pollution and will be promoting a healthier ASEAN in 2020-2023.
Wireless technology, especially Wi-Fi 6, referred to as 802.11ax or high-efficiency wireless, will be introduced in the enterprises via the employee door. The employees will have the enterprise access-point refreshes from time to time. Wi-Fi 6 is designed to provide faster internet and enhance speed and increase the employees’ potency at the workplace. It will also help to cut back the congestion during serious bandwidth situations. The digital transformation of the Wi-Fi 6 will be used in the stadiums, concert halls, convention, and apartment buildings.
SD-WAN is Software that is defined as the Wide Area Network (SD-WAN). It is a virtual WAN architecture that will enable enterprises to connect and leverage the mix of transport services, termed as the MPLS, LTE, and broadband internet services. This will help them to connect their users to the applications securely.
The SD-WAN model is designed to support the applications that are hosted by on-premise data centers. It will assist in providing services using SaaS solutions such as Dropbox, Salesfore.com. This will boost the employees’ performance and help them achieve the ultimate levels of performance.
ASEAN is poised to bring dramatic digital and technological changes and is looking to enhance the consumption opportunity. The digital transformation trends will be focused on the four mega-forces that include the strong demographic trends, rising income levels, geopolitical shifts increasing foreign investment, and digital advances that will be opening for the new consumer markets. To achieve this vision, the economy has to collaborate with the stakeholders using innovative and inclusive business models that are digital. The public and private partnerships will help unlock ASEAN’s potential and help them safeguard the region’s future by using digital technology.