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Digital consumers in South-east Asia up 50% to 200 million: Report

SINGAPORE — The number of digital consumers in South-east Asia has surged by 50 per cent to 200 million in the past year, helping to boost the region’s Internet economy to more than US$50 billion (S$70 billion), a report released on Friday (May 19) by global business consultancy Bain has shown.

SINGAPORE — The number of digital consumers in South-east Asia has surged by 50 per cent to 200 million in the past year, helping to boost the region’s Internet economy to more than US$50 billion (S$70 billion), a report released on Friday (May 19) by global business consultancy Bain has shown.

Travel and tourism, with turnover of about US$22 billion, represent the largest chunk of the region’s digital market, followed by e-commerce with US$15 billion, according to the report titled ‘Digital Acceleration in South-east Asia: Navigating Tectonic Shifts.’

Bain’s research, which includes a survey of 2,400 consumers in six major South-east Asian countries - Singapore, Malaysia, Thailand, Indonesia, Philippines, and Vietnam - showed that 300 million people in the region have a smartphone, which is helping to boost connectivity and driving the digital economy.

Social media is fast becoming a robust marketing channel as users rely on it to find products, interact with sellers and ultimately make a purchase. Social media and messaging are used several times a day by 85 per cent of users across the ASEAN-6, playing a central role in South-east Asia’s digital spending, the survey showed.

The combination of the fast-growing but fragmented market in South-east Asia means that smaller local platforms are competing successfully against global players in some areas.

“We have seen monumental digital growth in South-east Asia over the past year, but what is even more interesting is how these businesses are competing with very different business models, inspired by both China and the US players,” said Mr Florian Hoppe, co-leader in Bain’s Digital Practice in Asia Pacific and a lead author of the report.

“The challenge that lies ahead is whether these companies can navigate what is still a highly fragmented market to stay head of the competition,” he said.

Bain identified three ways companies that can compete better in the digital economy. These include rapid innovation to create new products and services using digital technologies and ways of working; tech-enabled transformation to change how customers experience a product or service; and the re-invention of internal functional capabilities to adapt to and leverage a digital world.

“South-east Asia has become a proving ground for digitally native companies as well as traditional companies looking to tap into the digital market,” said Mr Sebastien Lamy, an expert in Bain’s Digital Practice and co-author of the report.

“We have seen many companies succeed here, but an almost equal number succumb to the pressures and challenges of a still maturing market. Those that can develop and implement a strategy focused on adaptability, flexibility and reinvention are likely to come out on top,” he said.

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