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 and commissioned by global payments platform 2C2P and Ant Group.
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 ecommerce revenue and offline tourism spending, as well as public and private sector infrastructure.
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.
- 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 wallet (18.9%), domestic payment (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 $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.
Douglas Feagin, Senior Vice-President of Ant Group and Head of Alipay+ Cross-Border Mobile Payment Services, said, “Digitalisation will have a significant positive impact across Asia, shaping the future of businesses and lifestyles. We are committed to helping merchants both large and small to benefit from seamless digital payments, which are the foundation of future growth. The rapid rise in the number and diversity of digital payment options does, however present a challenge, especially for small to mid-sized merchants.
“By working with our partners to enable them to easily accept many different payment options through one easy to use interface, we have seen very encouraging results. This has been particularly important with the ongoing increase in online consumption and resumption of cross-border travel.
“From global online platforms to small street side merchants, it is now imperative for businesses to cater to these digital habits, and I believe that by working together, we can help more consumers and businesses benefit from digitalisation.”