Digital economy growth in Asia to outpace Western markets: report

Photo credit: 2C2P

The digital economy of Southeast Asia, South Korea, and Japan (SEAKJ) is set to grow rapidly and outpace the US and the European Union, according to a report from market research firm IDC. The new study was sponsored by global payments platform 2C2P and Ant Group.

Spending in SEAKJ’s digital sectors is expected to hit US$914.9 billion in 2027, marking an 82% increase in over five years. In the report, IDC counted ride-hailing, sharing economy services, ecommerce, online travel, as well as online video, media, and gaming as the sectors that make up the digital economy.

The report also delved into the potential of cross-border businesses. IDC estimates that private and public sector efforts will generate an extra US$232.4 billion in cross-border revenue for the SEAKJ economies from 2022 to 2027, driven by ecommerce and tourism spending growth.

Cross-border ecommerce revenue is expected to jump 70% in the next four years, exceeding that of domestic ecommerce. Within the same timeframe, tourism in SEAKJ is projected to skyrocket 334%, adding a substantial US$171.4 billion to the region’s economy.

More consumers are also adopting digital payments methods as ecommerce continues to boom and tourism recovers. These include transactions via e-wallets and buy now, pay later programs.

The most apparent shift in SEAKJ is expected to be in Vietnam. The report estimates a 21% drop in payments made through more traditional methods like cash on delivery and over-the-counter transactions by 2027.

“From global online platforms to small streetside merchants, it is now imperative for businesses to cater to these digital habits,” said Douglas Feagin, senior vice-president of Ant Group.

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