Asia, with its mix of established and emerging economies, sees a significant inflow of foreign and domestic funds. In recent years, maturing local economies have driven growth in Asia, with countries such as China becoming a global force to be reckoned with. A surge in consumer affluence has led to powerful economic shifts in several industries. Many changes in the APAC region are driven to some degree by rapidly developing technology. This article examines some of the industries witnessing an explosion in growth in Asia’s technological ecosystems.
Fierce competition has had a transformative effect on fintech adoption, particularly among consumers and small businesses. Fintech start-ups are offering an ever-increasing range of virtual financial services, from online loans and credit cards, to digital insurance and foreign currency exchanges. Digital payment platforms have in turn buoyed other related services, with e-wallet platforms supporting ride-hailing and food delivery.
Online lenders are posing a formidable threat to traditional banks and incumbent financial institutions. Grab, a Singapore based fintech company, is an emerging giant in South East Asian markets. Starting as ride-hailing app GrabTaxi, their expanded offering now includes digital payment platform GrabPay, as well as GrabCar, GrabBike, GrabFresh and GrabFood. Bundling a range of services into one app is increasingly popular in a world where users tend to only interact with a small handful of apps each day. Grab is capitalizing on markets where a large percentage of people don’t hold bank accounts, offering peer to peer payment platforms that are enabling an explosion in investment and organic economic growth. Grab was valued at $14 billion in 2019. Its Indonesia-based competitor, Go-Jek, is valued at $8-10 billion.
Mainland China continues to spearhead financial services innovation for consumers and SMEs. The abundant growth opportunities witnessed in China inspire neighbouring countries looking to emulate their success, propelling rapid innovation and market penetration. We can expect to see other Asian markets continuing to follow China’s lead, spurred on in part by an increase in Chinese investment in these markets.
Tech literate countries in Asia who otherwise only have a limited option of financial services are seeing a swell in transactions that utilize new financial technology, fuelling the trend towards a cashless society. In the 2020s we can expect this trend to continue, as previously financially underserved individuals embrace a range of new fintech offerings.
In the West, social media and online shopping companies are still considering their future expansion into financial services. In China, companies such as Tencent and Alibaba are already key players in the financial services industry. Social media is recognized as a gateway to online shopping, providing a direct and seamless user journey from community to commerce, utilizing network recommendations and the power of peer influence.
China is the globe’s leading e-commerce market, with giants JD.com and Alibaba dominating the e-commerce ecosystem. Despite some recent slower growth due to geopolitical challenges, retail sales in 2019 are estimated to have amounted to $5.291 trillion. On key dates such as 11.11 the sales rocket: in 2019 the Singles Day shopping bonanza generated over $38 billion in 24 hours.
But it’s not just China. GoPay, Go-Jek’s online payment platform, is used in 370 cities across Indonesia. In a challenge to another element of banks’ traditional business, Go-Jek has launched a buy now pay later service, ushering in easy access to personal credit. Services like this combine financial facilities, spending habits and other lifestyle choices, yielding valuable data and providing a gateway for these companies to offer wealth management services. Fuelled by the booming e-commerce industry and enabled by constantly improving transportation networks, delivery and logistics companies are thriving.
Going forward, we will see e-commerce exhibit continuous growth across the APAC region, particularly in developing economies where consumer have an increasing disposable income.
From strategy games to simulations, the digital gaming economy is booming in Asia. China, Japan, South Korea, and India are leading the way, with heavy weight companies such as Nintendo driving a multimillion-dollar industry. In 2019, the games market generated $72.2 billion in the Asia-Pacific region alone, more than twice the revenue of the North American gaming market.
Fuelled in part by the ubiquitous presence of powerful smartphones, the mobile games scene is exploding, with everything from esports to casino experiences available. Gaming as a social experience is more popular than ever. Whether playing with a close group of friends or exploring massive multiplayer online games, community-based gaming is the new normal. When popular gamers live-stream their gameplay, thousands of viewers can tune in to watch, producing an optimal environment for marketing and advertising, driving e-commerce within the industry. In 2020, we can expect to see increasing advertiser investment in the esports and gaming industries in the APAC region.
4. High-Tech Meat Substitutes
Eating meat has long been a status symbol in many Asian countries. Despite this, a heightened awareness of the environmental impact of everyday choices is leading consumers to seek green alternatives. A small but significant amount of people are beginning to transition away from a meat-based diet, driving demand for ‘clean’ plant-based meat substitutes.
Responding to these growing consumer demands are some cutting edge start-ups experimenting with soy protein as a substitute for meat. It is predicted that plant-based, and even lab-grown, meat is to become a $140 billion industry in the next decade. US based Impossible Foods was established in 2011, launching in Hong Kong in 2018, and in Singapore in 2019. In the past five years, the valuation of Impossible Foods almost tripled from $700 million to $2 billion. And it’s not the only one. It has been reported that Beyond Meat, an American company founded in 2009, is planning to start production in Asia in 2020, recognizing a fast-growing niche for plant-based protein.
There are other reasons to why a transition away from meat may be desirable. China continues to combat the effects of the destructive outbreak of African swine fever that has forced it to cull around one million pigs. This has left a large void, and a market looking for alternatives, dovetailing with individuals looking to make sustainable and healthy lifestyle choices.
In 2020, we will continue to see green lifestyles choices as the new status symbol, with a transition towards plant-based meat substitutes as part of a wider consumer trend towards sustainability.
Changes in technology have generated considerable momentum in the pharmaceutical and biotech markets. Data driven advances in medical research are benefiting from increased computing power, allowing huge swathes of data to be analyzed. Cloud computing hosts a wealth of data, capable of being shared across the globe.
Detailed personal data can now be gathered through a range of consumer wearables, and machine learning has already transformed areas such as predictive analytics for diagnoses. Advancing technology also supports new models for improved patient access to medicine, allowing researchers to host virtual clinical trials or offer telemedicine, literally ‘healing at a distance’. These digital diagnostic tools are increasing access to medicine, increasing diversity within the industry.
All these advances result in an industry that is increasingly innovative, efficient, and cost effective. The SARS-CoV-2 pandemic will have only increased interest and growth in Asia’s dynamic pharmaceutical markets, making this an industry to watch in 2020 and beyond.
Investing in Asia in 2020
Whether you are looking to enter the Asia market, or already have a presence here, finding a reliable local partner can be key to establishing a successful business strategy. INS Global have an in-depth knowledge of local markets in the APAC region, meaning that we are perfectly placed to support your business. We can offer a range of services, from recruitment to human resource management, offering bespoke solutions expertly tailored to your company’s needs. Contact us today to learn more about how we could help your company flourish in Asia.