There have been several reports recently by think tanks and social media firms that point to the rapid expansion of internet companies in the region. The low cost of internet services combined with cut-throat competition by Japan, South Korea, China and Taiwan entities means that the internet business is growing rapidly – and it is not slowing down anytime soon. In 2018, the internet economy is valued at about $72 billion, up 37 percent from a year earlier.
This takes us to a short discussion in a recent meeting. One of our partners was visiting Myanmar, a country that is seeing rapid expansion in internet services. At one of the leading Burmese banks, a senior manager pointed out that the local population is being trained to use touch screens for retail banking services in branches. They walk in, see a screen pop up on a wall and start pushing “buttons” that are lights. These banking customers have never filled out any paperwork for banking, only touch screens. Moreover, these customer have only seen smartphones, and no other device. They have no idea how banking was done 25 years ago, many thinking that touch screens have been around as long as banking.
These same customers take a taxi home and use Uber or a similar service. They have never phoned a taxi service, as the only way to call a taxi is pushing a screen on a smart phone. In their minds, and their reality, smart phones and touch screens are the only banking and taxi systems that exist. Ask them how it was done 15 years ago, and they do not have a clue.
Banking services, mobile internet growth, will be in the hands of hundreds of millions of consumers in the next 10 years – many who will buy their first smart phone in 2019 and 2020. Indonesia is the fastest growing market in the region and is predicted to grown to $100 billion by 2025 and will account for a massive 40 percent of the region`s spending. The population of Indonesia is currently 243,000,000 with a fast growing population that is addicted to hand-held devices.
Southeast Asia is seeing its internet economy grow at a fast pace, and Japan, the US, and China are its key trading partners.