Southeast Asia will be the top region for digital economy growth over the next five years, ahead of the US, European Union, South Korea and Japan, with an anticipated 100% expansion in the e-commerce market driven mostly by buy now, pay later (BNPL) methods.
This is according to the third edition of a report commissioned by payments platform 2C2P and Ant Group, produced by market intelligence firm IDC. The report is titled “How Asia Buys and Pays 2023, Tapping into Asia’s Regional Commerce Opportunities”, and underscores the potential of regional connectivity and trade in Asia driven by cross-border e-commerce revenue.
It is anticipated that the Southeast Asia, South Korea, and Japan (SEAKJ) digital economy will grow from US$501.7 billion ($688.36 billion) in 2022 to US$914.9 billion in 2027, a 82% leap in five years.
This growth will be supported by a 100% expansion in the e-commerce market, driven by BNPL (38%), mobile wallet (18.9%), domestic payment (16.9%) and credit cards (14.4%).
On the backing of this, the public and private sectors are expected to inject US$232.4 billion in cross-border revenue into the SEAKJ economies during this same time frame, driven by e-commerce and tourism spending gains.
Finally, cross-border e-commerce revenue is primed to grow by a striking 70% to US$148.1 billion by 2027, faster than the growth of domestic e-commerce revenue. The offline tourism in SEAKJ is projected to grow by 334% by 2027, contributing US$171.4 billion to the region's economy.
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Douglas Feagin, senior vice-president of Ant Group and head of Alipay+ cross-border mobile payment services, says: "The rapid rise in the number and diversity of digital payment options 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."
Aung Kyaw Moe, founder and CEO of 2C2P, adds: "Our mission at 2C2P is to empower businesses to navigate and thrive in the ever-evolving payment landscape in Asia. We hope the findings of this report encourage businesses to unlock the immense potential of Asia's digital economies by tapping on existing public- and private-sector initiatives and tools. Through our comprehensive payment solutions, we stand ready to partner with businesses to seize the exciting opportunities that lie within and across the region."
