2. #asiamatters ASIATECHRESEARCH
Graham D Brown
Report Author
Thanks for reading my #asiamatters Report
âThe Digital Frontierâ.To learn more about
what I do, and get regular updates and
insights from my Asian research, connect
with me on Linkedin.
Connect with me on Linkedin
3. download them free from www.AsiaTechResearch.com
#asiamatters
Get All 4 Reports in this Series
ASIATECHRESEARCH
4. There are more people living inside that red circle than outside it
#asiamatters
Asiaâs Digital Frontier
ASIATECHRESEARCH
5. #asiamatters ASIATECHRESEARCH
Asiaâs digital frontier is evolving fast, but
not all markets at the same velocity.
There are 2 key stories behind the
speed of change to focus on in 2018.
6. These two regions are driving the bulk of growth in Asiaâs internet economy
#asiamatters
Itâs a tale of 2 key driversâŠ
ASIATECHRESEARCH
1. China
2. Southeast
Asia
8. 48% of GDP and 415 million new jobs in next 20 years
#asiamatters
Chinaâs Digital Economy Explodes
ASIATECHRESEARCH
Chinaâs digital economy, already
home to the worldâs largest
population of internet and
smartphone users, is likely to
create 415 million jobs by 2035,
bolstering technologyâs share to
48 per cent of gross domestic
product, according to forecasts
by the Boston Consulting Group
and AliResearch Institute.
- South China Morning Post 10 Jan 2017
9. E-Commerce in China is happening on a scaleThe West has never seen
#asiamatters
Chinese E-Commerce DeliversâŠ
ASIATECHRESEARCH
10. China continues to dominate, and its share of trade is growing
#asiamatters
China: >50% of World E-Commerce
ASIATECHRESEARCH
0
10
20
30
40
50
60
0
500
1000
1500
2000
2500
3000
2016 2017 2018 2019 2020 2021
China ecommerce sales
% of worldwide
SOURCE:ASIA TECH RESEARCH BASED ON EMARKETER DATA 2017
11. #asiamatters ASIATECHRESEARCH
China has leapfrogged the rest of the
world in E-Commerce volume.With
fewer legacy retailers than the West,
Chinese stores and Chinese consumers
have gone straight to digital.
12. ChineseVideo Market grows 1000% in 6 years
#asiamatters
Online Video in China
ASIATECHRESEARCH
BillionsofRMB
0
20
40
60
80
100
2012 2013 2014 2015 2016 2017 2018
Annual market revenues
SOURCE:ASIA TECH RESEARCH BASED ON IRESEARCH DATA 2017
14. Even the worldâs smartest internet company underestimated Southeast Asia
#asiamatters
Southeast Asia digital adds $3 trillion
ASIATECHRESEARCH
0
1500
3000
4500
6000
2015 2017 2019 2021 2023 2025
base
worst
best
SOURCE:ASIA TECH RESEARCH BASED ON GSMA,WORLD BANK, IMF, ITU, DELOITTE,TELENOR,AT KEARNEY DATA
FORECASTS FOR ASEAN DIGITAL ECONOMY 2015-2025
15. #asiamatters ASIATECHRESEARCH
Key to the growth of Southeast Asiaâs
digital frontier is the movement of Risk
Capital out of China into regions
seeking Outsized Returns.Alibaba,
TenCent etc will be key to Southeast
Asiaâs growth in the next 5 years.
16. Future growth will only be accelerated by the shift of Risk Capital out of China
#asiamatters
Southeast Asia beats expectations
ASIATECHRESEARCH
Southeast Asia is now the worldâs
third largest region for internet
users â with more people online
than the entire U.S. population â
and internet is having a bigger
impact on the region than
originally thought, according to a
new report co-authored by
Google.
-Tech Crunch 12 Dec 2017
17. 2 Categories account for >2/3rd of Southeast Asian transactions
#asiamatters
Travel and E-Commerce drive SEAsia
ASIATECHRESEARCH
0
50
100
150
200
250
2015 2017 2025
Ride Sharing
Online Media
ECommerce
OnlineTravel
SOURCE: GOOGLE TEMASEK DATA 2017
SOUTHEAST ASIA E-COMMERCE MARKET VALUE BY CATEGORY ($ BILLIONS)
18. There are more people living inside that red circle than outside it
#asiamatters
E-Commerce in Southeast Asia
ASIATECHRESEARCH
0
25
50
75
100
2015 2017 2025
$88.1bn
$10.9bn
$5.5bn
Annual estimates
SOURCE: GOOGLE TEMASEK DATA 2017
19. There are more people living inside that red circle than outside it
#asiamatters
E-Commerce Southeast Asia 2025
ASIATECHRESEARCH
Indonesia
Thailand
Philippines
Myanmar
Vietnam
Singapore $5.4bn
$7.5bn
$8.2bn
$9.7bn
$11.1bn
$46bn
SOURCE: INTERNATIONAL MONETARY FUND 2018
21. Millions of 4G Mobile Connections 2015-2020E
#asiamatters
Half the Worldâs 4G Mobile Connections
ASIATECHRESEARCH
13%
21%
3%
3%
3%
56%
SOURCE:ASIA TECH RESEARCH BASED ON CISCO DATA 2016
2015
13%
13%
7%
7%
8%
52%
2020
22. Heaviest users in Southeast Asia
#asiamatters
Asia leads Mobile Social Media
ASIATECHRESEARCH
SouthEast Asia
China
USA
UK
Japan 1 hrs
1.8 hrs
2 hrs
3 hrs
3.6 hrs
SOURCE: GOOGLE TEMASEK DATA 2017
Average hours mobile social media per day
23. Young Indians amongst the highest users of mobile-only internet
#asiamatters
India leads Mobile First
ASIATECHRESEARCH
India
Malaysia
China 37 %
41 %
46 %
SOURCE:ADOBE 2017
24. Middle Classes drive social media usage in developing economies
#asiamatters
The Middle Classes and Social Media
ASIATECHRESEARCH
China
Brazil
USA
UK
France
India
Germany 20 %
23 %
26 %
30 %
30 %
33 %
51 %
SOURCE:ASIA TECH RESEARCH BASED ON DALIA RESEARCH DATA 2017
26. Invests US$2.9 bn in massive tech-fuelled supermarket chain
#asiamatters
AliBaba Drives Innovation
ASIATECHRESEARCH
There are chefs in-store ready to cook up what you buy, which you can then eat in the canteen
27. % Annual Retail Sales Growth 2015-2018 by Regio
#asiamatters
Asia Drives Global Retail Sales
ASIATECHRESEARCH
APAC LATAM MENA NAM EUR WORLD
3.4%
0.9%
2.6%
4.3%
3.8%
4.9%
3.3%
1%
2.5%
4.6%
3.4%
4.8%
3.2%
0.9%
2.4%
3.9%
3.4%
4.8%
+2.9%
+0.8%
+2.5%
+2.9%
+2.4%
+4.6%
2015 2016
2017 2018
SOURCE: ECONOMIST INTELLIGENCE UNIT 2015
28. 7Fresh stores feature these self-steering carts that follow you around
#asiamatters
JD Retail Innovation
ASIATECHRESEARCH
30. #asiamatters ASIATECHRESEARCH
To really understand the impact of Asia
on the digital world. we must ïŹrst look
at the main driver of change:Asiaâs
growing Middle ClassesâŠ
31. #asiamatters ASIATECHRESEARCH
If China pursues the structural
reforms and technological
upgrading needed to maintain
rapid economic growth, its middle
class should exceed one billion
people in 2030, up from 157
million in 2009.
- Lee Jong-Wha, HufïŹngton Post
32. #asiamatters
China will have 5x as many Middle Class
Households as the US by 2020
ASIATECHRESEARCH
MiddleClassHouseholds(millions)
0
100
200
300
2012 2020
5252.5
249.5
135.5
SOURCE:ASIA TECH RESEARCH & OXFORD ECONOMICS
36. % compound annual growth rate (CAGR) 2001-2016
#asiamatters
Annual Retail Sales Growth
ASIATECHRESEARCH
China
Vietnam
Malaysia
India
Thailand
Philippines
Hong Kong
Indonesia
Taiwan
USA
South Korea +1.9%
+2.7%
+2.9%
+4.7%
+4.8%
+5.9%
+6.3%
+7.1%
+7.5%
+9.3%
+12.3%
SOURCE: OXFORD ECONOMICS, DELOITTE SERVICES
37. #asiamatters ASIATECHRESEARCH
 In my grandfatherâs day, setting
up a business is about survival,
and today it is about improving
standards of living, like buying
properties, taking a holiday, the
next generation of iPad, Ferrari
and Porsche. People are creating
better lives for themselves
- Kennedy Cheng, CEO of
Lxpert
38. 2018 revenues more than USA and Europe combined
#asiamatters
China leads online fashion sales
ASIATECHRESEARCH
FashionSales$USBillions
0
50
100
150
200
250
300
2016 2017 2018 2019 2020 2021
285.3
260.5
228
193.9
159
125.8
140.5
130.8
119.2
107.7
96.7
86.8
96.490.383.876.869.863.3
USA Europe China
39. Source: China Daily 2016
#asiamatters
China has 100 million registered pets
ASIATECHRESEARCH
40. Market doubles in 5 years
#asiamatters
Digital Travel Sales in APAC
ASIATECHRESEARCH
2014 2015 2016 2017 2018 2019
$242.6bn
$214.9bn
$189.7bn
$163.9bn
$139.1bn
$116.1bn
SOURCE: ASIA TECH RESEARCH,
EMARKETER, SKIFT
Market value of online & digital travel sales in
Asia Pacific 2014-2019 (forecast)
41. A major beneficiary of the growing Asian middle classes
#asiamatters
Online Travel Southeast Asia
ASIATECHRESEARCH
MarketValue
Ground transport
Hotels
Airlines
SOURCE:ASIA TECH RESEARCH , SOJERN
MARKET VALUE OF ONLINE TRAVEL CATEGORY IN SOUTH EAST ASIA 2015 - 2025 (FORECAST)
2015 2025E
$13.1bn
$36.4bn
$40.1bn
$12.5bn
$6.6bn
$2.5bn
42. Asians are increasingly seeking travel experiences within Asia
#asiamatters
Middle Class + Sector Competition
ASIATECHRESEARCH
âAsia PaciïŹc is a region that is seeing
tremendous growth and experiencing a
travel boom with the rise of a more
afïŹuent middle class, and lower cost of
travel.â
- Bart Bellersâš
43. Total compound annual growth 2016-2021 %
#asiamatters
FMCG Market Growth
ASIATECHRESEARCH
Myanmar
Vietnam
Indonesia
China
Philippines
Thailand
Hong Kong
Malaysia
Singapore
Japan 1.9 %
4.1 %
6 %
6.3 %
6.7 %
8.1 %
8.4 %
10.1 %
10.9 %
12.5 %
SOURCE:ASIA TECH RESEARCH BASED ON EUROMONITOR, IMF AND ROLAND
BERGER DATA 2018
44. #asiamatters ASIATECHRESEARCH
Graham D Brown
Report Author
Thanks for reading my #asiamatters Report
âThe Digital Frontierâ.To learn more about
what I do, and get regular updates and
insights from my Asian research, connect
with me on Linkedin.
Connect with me on Linkedin
45. download them free from www.AsiaTechResearch.com
#asiamatters
Get All 4 Reports in this Series
ASIATECHRESEARCH