Asian economies, including New Zealand, are more digitally engaged relative to their global peers at similar stages of development. This according to the recently released second edition of Deloitte’s Voice of Asia series.
Deloitte’s digital engagement indices show that the economies in the region are readily adopting digital technologies to win the connectivity race. Asia has become the centre of global economic growth and by embracing digital it will continue to lead global economic growth over the coming decade.
Deloitte partner and head of digital Grant Frear says that digital can encourage trade in the region by helping businesses, particularly small businesses, access global markets.
“In developed economies the use of online marketplaces – such as e-commerce platforms like China’s Alibaba and their consumer to consumer marketplace Taobao, and Japan’s Rakuten – has opened up new markets,” says Mr Frear.
At the same time there has been ready adoption of digital payment services in the region to support e-commerce. In China, there are hundreds of millions of users of Alipay and WeChat pay. While in countries with large unbanked populations, like in India or Indonesia, individuals have turned to digital solutions such as using the credit in their mobile phone accounts as both a store of value and a means of payment.
“The growth of online marketplaces in the region, fuelled by digital payments, presents a great opportunity for Kiwi businesses, including our small businesses,” says Mr Frear.
“To really make the most of this opportunity New Zealand companies need to develop their own digital savvy to participate in these emerging digital trading platforms in Asia.”
Deloitte partner and head of China services group Jenny Liu says there are opportunities here for Kiwi businesses to develop their digital savvy in relation to Asia.
“New Zealand’s EFTPOS system used to be world leading, but new technologies like WeChat pay and Alipay have left us behind. Now Chinese people in New Zealand, especially tourists and students, are using WeChat pay and Alipay to pay for goods and services here as more local companies are actively embracing these alternative payment methods,” says Ms Liu.
But Mr Frear warns that the potential rewards from embracing digital also carry risk and businesses could become victims of their own success.
“The markets opened up for Kiwi companies embracing digital platforms are so large that, for example, one order could clean an aspiring exporter out of product in one go,” says Mr Frear.
“While online platforms and digital payments offer a brave new world, companies still need to have a firm grasp of business fundamentals like supply chain, forecasting and cash flow,” he concludes.
The latest edition of the Voice of Asia series also canvasses the opportunities presented by digital to consumers and governments in the region:
• For consumers, digital can provide opportunities in terms of connectivity, mobility and social networks. India is leading the way with the highest number of Facebook users in the world (195 million in May 2016) and e-commerce is also expanding, with China now the world’s largest e-commerce market. Across all countries, the potential to harness consumer engagement is high.
• For government, digital aids in the development of public infrastructure, particularly around smart cities, which can help leap infrastructure development hurdles. Digital government initiatives can also help to improve efficiency, transparency and inclusiveness of government. Countries like Singapore and South Korea are global leaders. Their governments continue to actively explore how to embrace the latest waves of technological advances so that they remain at the forefront.
To read the second edition of the Voice of Asia series, as well as the previous edition released in January, please visit Deloitte University Press.