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Amidst economic headwinds, Asia’s digital economies continue to post impressive gains, with cross-border initiatives and tools offering businesses new avenues to unlock unprecedented growth, according to the latest report by market intelligence firm IDC.
Since 2021, the IDC InfoBrief commissioned by 2C2P seeks to provide the latest state of play of the digital payment landscape within Southeast Asia.
This year’s edition, “How Asia Buys and Pays 2023 – Tapping into Asia’s Regional Commerce Opportunities,” expands the scope to cover the digital payment landscape across Southeast Asia (SEA), South Korea, and Japan (SEAKJ).
The report delves into the vast potential of increased regional connectivity and trade in Asia, driven by projected increases in cross-border e-commerce revenue and offline tourism spending, as well as public and private sector infrastructure.
Throughout Southeast Asia (SEA), South Korea, and Japan (shortened as ‘SEAKJ’ in this report), digital commerce and digital payments continue to grow at rapid rates. Based on IDC estimates, the total digital economy of SEAKJ is set to grow from $501.7 billion in 2022 to $914.9 billion in 2027e, a jump of 82% in 5 years.
Integration between SEAKJ markets, however, remains complex, with many key e-commerce platforms and payment methods remaining siloed in their respective markets.
IDC now sees change: efforts from both the private and government sectors are predicted to add a total of $232.4 billion new cross-border revenue to the combined economies of SEAKJ in the 5 years from 2022 to 2027e.
This is driven by impressive growth in both cross-border e-commerce revenue and offline tourism.
The report explores the value and opportunities that businesses can unlock through cross-border solutions in the markets of SEAKJ.
It provides a step-by-step guide to how businesses can successfully engage in cross-border commerce by tapping on available cross-border initiatives, ranging from digital payments to logistics, to reach new audiences and create new revenue streams.
Key Numbers:
Southeast Asia Races Ahead: SEA leads in digital economy growth at 15.8% for the next five years, outpacing the United States and EU. South Korea (12.7%) and Japan (10.2%) closely follow, unlocking significant commerce opportunities for SEAKJ.
Explosive Digital Economy Growth: SEAKJ’s digital economy is on the verge of explosive growth, projected to skyrocket from $501.7 billion in 2022 to a staggering $914.9 billion in 2027e, marking an impressive 82% leap in just five years.
Digital Payments Accelerate: SEA anticipates a 100% expansion in the e-commerce market, driven by accelerated digital payments growth, led by Buy Now Pay Later (38%), mobile wallets (18.9%), domestic payments (16.9%) and credit cards (14.4%).
Cross-Border Revenue Surge: Private and public sector efforts are poised to inject an impressive $232.4 billion in fresh cross-border revenue into the SEAKJ economies from 2022 to 2027e, driven by e-commerce and tourism spending gains.
Cross-border e-commerce revenue is primed to grow by a striking 70% to to $148.1 billion by 2027e, outpacing the growth of domestic e-commerce revenue.
Tourism Spending Boom: Offline tourism in SEAKJ is projected to grow by a remarkable 334% by 2027e, contributing a substantial $171.4 billion to the region’s economy.
“Digitalisation will have a significant positive impact across Asia, shaping the future of businesses and lifestyles. The rapid rise in the number and diversity of digital payment options does, however, present a challenge, especially for small to mid-sized merchants,” comments Douglas Feagin, Senior Vice President of Ant Group and Head of Alipay+ Cross-Border Mobile Payment Services.
“From global online platforms to small street side merchants, it is now imperative for businesses to cater to these digital habits.”
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