The burgeoning digital economy led the pandemic recovery in South and Southeast Asia. Heavy smartphone penetration is facilitating digitalization in these regions.

Greater government support is needed to advance the digitalization process.

Digital transformation worldwide was already increasingly changing how companies make and offer their propositions and interact with their customers. But the COVID-19 pandemic has intensified this, with technology emerging as a critical means of resolving public health challenges and continuing to facilitate the new online consumer landscape.

This accelerated digitalization is disrupting the world’s economy, making it one of the most significant growth engines for many developing nations.

We are already seeing how digitalization is reshaping Asia. The digital transformation of South and Southeast Asia is opening a range of opportunities for its citizens, especially for younger generations. Many Asian countries are even in the lead globally in certain sectors of digitalization.

For example, the Philippines and Malaysia have become the top two countries in e-commerce retail growth, increasing by 25% and 23% per year, respectively.

Asia countries are performing impressively on e-commerce growth

What’s more, with the advent of rapid digitalization, Asian countries like India, Bangladesh, Pakistan and the Philippines are tapping new opportunities by exporting online labour to the West. In Bangladesh, for example, the digital economy is bringing employment to hitherto excluded sections of the population.

The pandemic effect

During the COVID-19 pandemic, digital connectivity in Asia played a vital role in overcoming the difficulties of conventional trade. The digital economy acted as a key enabling factor in the Asian recovery, Observer Research Foundation reports. According to Nikkei Asia, the pandemic has had a striking impact on Southeast Asia’s digital economy: 60 million people in the region became online consumers during this period. With this accelerated uptake of technology, there was an increase in nearly all e-commerce during the pandemic, with solid growth in sports equipment and supermarket items.

The pandemic had a beneficial effect on most areas of e-commerce

Asia now accounts for nearly 60% of the world’s online retail sales. Asian-Pacific e-commerce is expected to nearly double by 2025, reaching $2 trillion, according to Euromonitor International.

From online retail to ride-sharing services to exporting online labour, this digital boom is reshaping almost every aspect of business and social life in this region.

The smartphone gateway

How digitalization is making South and Southeast Asia engines of growth
The digital transformation of South and Southeast Asia is opening a range of opportunities for its citizens, especially for younger generations. Many Asian countries are even in the lead globally in certain sectors of digitalization.

Asia, the most populous continent, has the most significant number of mobile phone users globally; around two-thirds of people use mobile services, and there is still room for further expansion. The fastest growth rates are in South and Southeast Asian countries.

Despite high smartphone penetration in South and Southeast Asia, there is still room for growth

c. However, in the case of smartphone market growth in 2020, the Philippines has the highest increase: over 90%. Similarly, according to…

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