The digital world is a trending topic across the globe, but in the western world, our attention is mostly absorbed by American internet giants like Google, Amazon and Facebook.
This is a shame – developments in Asia are accelerating and are surprisingly different. What will happen when West meets East?
Who is online?
Last year marked a historical milestone: For the first time, more than 50 percent of the world’s internet users were in Asia. The Asia Pacific region now accounts for more than 50 percent of smartphone users.
A large proportion of these users – more than 21 percent – are in China, where 1 in 2 citizens are online. India is already in second place worldwide with nearly 14 percent, although only 1 in 3 Indians use the internet.
India’s year-on-year growth of internet users was a staggering 30 percent in 2016. Other Asian countries, like Indonesia, Vietnam and the Philippines, are already ranked in the global top 15 countries for internet users.
An obvious conclusion would be that this is a great opportunity for the leading global internet players: more people on Facebook, more customers for Amazon and more searches for Google.
These players are indeed doing their utmost to gain market leadership in Asia. But they are not alone.
A large portion of the market is already served by major Asian platforms, such as Alibaba, Tencent and Baidu in China; Flipkart (ecommerce), Paytm (payments) and Hike (messaging) in India; and Lazada (ecommerce) in Southeast Asia.
These platforms have been able to withstand the American internet giants, partly due to their massive home markets and national regulations. Other barriers to entry, such as language and foreign fonts, have certainly also helped.
Given the astounding success of the leading American platforms, we could assume that Asian companies would develop as local clones: Alibaba and Flipkart as Amazon, Tencent as Facebook/WhatsApp, Paytm as PayPal, and Baidu as Google.
But nothing could be further from the truth. Asian digital giants have built a fundamentally different ecosystem with completely different rules of the game.
How has this come about? Of course, there are major Asian internet entrepreneurs paving their own way, such as Jack Ma from Alibaba, who is as progressive and visionary as Mark Zuckerberg, Steve Jobs or Larry Page.
More importantly, external conditions in Asia, in terms of economic development, infrastructure, as well as technology, are much more challenging than in the western world. This has forced Asian players to be very clever with innovative ideas.
The Swiss Army knife of apps
What are the key drivers for these differences? One important factor is the varying internet access infrastructure. Only a small part of the Asian population has access via fixed line broadband; the majority uses mobile. This has broad implications for the way the internet is used: Unlike in Europe and North America where hundreds of websites are found by search engines, in Asia, the internet is mostly accessed through a small number of apps.
In the West, the majority of apps have a single function such as chatting via WhatsApp, ordering a taxi via Uber or searching via Google, whereas Asian apps are multifunctional. For example, Chinese WeChat is rather like a Swiss Army knife. Users can chat or call as you’d expect but they can also watch TV, bank online, book taxis, order takeaways and more – all within the same app.
Interface preferences are also contrasting: In the West, we prefer a simple user interface, but in the East something like Google’s “empty” search page may be perceived as having too little to offer.
Money and access to banking
Another driver of difference is the lower income per capita in Asia. For many people, the costs of mobile data are a large portion of their monthly budget. A solution is ‘data light’ products which offer slimmed-down versions of popular sites that don’t eat up data plans, e.g. YouTube Go, Facebook Lite and Skype Lite.
Some major platforms, like Facebook, have adopted the strategy of partnering with national telecom companies, so that data access is provided for free to a limited number of apps, including, of course, their own.
Many in Asia do not have a personal bank account
The regional internet players have filled this gap with special apps that make electronic payment possible. A substantial percentage of payments in China are now made via Alipay and Tenpay.
In India, Paytm is an important electronic payment company and the messaging app Hike recently launched a payment service. These apps often start as simple payment services and develop over time into full-fledged payment portals, which offer many financial services, such as lending.
By Annet Aris, INSEAD Adjunct Professor of Strategy. This article is republished courtesy of INSEAD Knowledge. Copyright INSEAD 2017.
Read more at : Why Digital Asia Is Different | INSEAD Knowledge
A broader view of poverty in East Asia and Pacific
High turnout expected for Thailand’s first election since 2014 coup
Six priorities to strengthen the digital economy in Southeast Asia
The signs of Southeast Asia’s digital transformation are obvious from its impressive tech “unicorn” companies, such as GoJek, Grab and Lazada, Sea, Tokopedia and Traveloka
Digital lifestyles, cashless societies, app-based businesses, “smart” nations, virtual services – there is a tremendous amount of excitement in Southeast Asia now about the growth of the digital economy. (more…)
Thai Economy likely to miss the 3.5% growth target
Deputy Prime Minister Somkid Jatusripitak said the global economic slowdown hasweakened exports and reduced domestic consumption
Google shuts down Huawei’s access to Android updates after US blacklist
Holders of current Huawei smartphones with Google apps, however, will continue to be able to use and download app updates...
Drivers of Asia Pacific office space demand in 2019 remain strong
More employers plan to increase rather than decrease staffing levels in most Asia Pacific countries, with employers in Japan reporting...
First-home stimulus measure may have limited impact on Thailand’s housing market
The first-home buyers who make less than 25,000 baht per month however will not benefit from this scheme.
Real-time payments : An opportunity for the entire Asian financial ecosystem ?
Real-time payments (RTPs) are critical for bringing millions of people into the digital financial ecosystem, enabling the rise in the...
- Tech5 days ago
Thailand to use Biometrics scan to identify travellers
- Tourism2 weeks ago
Thailand extends free visa-on-arrival until 31 October 2019
- Business2 weeks ago
Political uncertainty weighs on Thailand’s consumer confidence
- Property1 week ago
Property slowdown looms over Thai market
- Business6 days ago
Thailand cooperates with Indonesia to push creative industries
- Corporate1 week ago
Challenges and opportunities await Thai businesses to reduce plastic use
- Corporate1 week ago
Flexible workspace key role in company’s success
- Real Estate6 days ago
Thai Property market : condo launches to slow to 61,000 – 64,000 units in 2019