THE digital ecosystem in Southeast Asia is seen to generate revenue opportunities amounting to $23 billion by 2025, a report by professional services firm Ernst & Young Global Ltd. (EY) showed.
EY Asean Regional Managing Partner Liew Nam Soon said that the growth of start-ups and digital natives offering interconnected services—including ride-hailing, food delivery, grocery, logistics and financial services—will support the regional bloc’s digital ecosystem.
“Consumer-focused digital ecosystems are forming across Southeast Asia to deliver value at unprecedented speed and scale, in response to industry digital disruptions and accelerated by the pandemic,” he explained.
The so-called super digital platforms have generated investments amounting to $50 billion in the Southeast Asian region between 2016 and 2020, EY said. The regional digital ecosystem grew to $6 billion last year from $4 billion in 2019.
According to EY report, 39 percent of the Asean companies have made significant progress in their digital adoption while 61 percent expect to do so in the next three years.
“Today’s consumers expect speed, responsiveness and access with a hyper-personalized experience,” Liew said. “Digital ecosystems help companies create value through revenue growth, gain new market access, decrease customer acquisition costs, and ultimately strengthen and retain customer relationships.”
For traditional players, partnerships and strategic alliances in developing digital ecosystems are a way to participate in the technological disruption.
The professional services firm noted that technology transactions reached $408.5 billion between 2016 and 2020 in Southeast Asia. Among the areas that booked the most investments during the period include mobile applications, cloud computing, artificial intelligence, big data, analytics, blockchain and Internet of Things.
“Being part of a digital ecosystem allows businesses to leverage the network effect to create a competitive advantage. However, to do so, companies must get their digital transformation strategy and capabilities right,” EY-Parthenon Asean Leader Joongshik Wang said.
“Most traditional firms have been focusing on their core business and may be hesitant to build a platform-based business due to legacy systems and corporate culture. Thus, traditional firms are turning to collaborating with e-commerce and last-mile platforms to offer digitalized, streamlined and omnichannel experiences to their customers,” Wang continued.
In the Philippines, the majority or 73 percent of the micro, small and medium enterprises (MSMEs) need capacity-building to digitize their operations, according to a survey by the Department of Trade and Industry (DTI) in September last year.
The Trade department noted that the top needed skills by the respondents are financial, marketing, content management, basics of e-commerce and starting an online business.
Trade Secretary Ramon Lopez said the department is crafting modules that can aid the MSMEs in their digital transformation. “Digitalization…helps MSMEs to increase productivity, reduce costs, offer and/ or diversify new products and services, improve competitiveness, and increase sales and revenues by managing transactions at a distance,” Lopez said earlier.
The DTI aims to boost the contribution of the e-commerce industry to P1.2 trillion by 2022, which is equivalent to 5.5 percent of the country’s gross domestic product.