The latest report released by Deloitte, Technology-empowered Digital Commerce in the Asia Pacific, highlights the latest trends in cross-border commerce in the Asia Pacific. The report also underlines how small and micro businesses play an important role as the region advances towards a more digitalised, greener and sustainable future.
The report predicts that digital commerce will continue to accelerate due to dynamic cross-border e-commerce activities, rapid shifts toward a digital lifestyle by customers, ongoing development of digital infrastructure and strengthened regional cooperation led by the RCEP (Regional Comprehensive Economic Partnership). Over the next three years, the region is expected to experience a golden age for digital commerce.
The formation of digital trade in the Asia Pacific region is accelerating because of Covid19, the growth of digital technology and improved regional cooperation. Digital commerce is presented with brand-new development opportunities. In addition, the RCEP will facilitate regional digital trade and enhance regional cooperation.
Moreover, digital technologies enable global sellers to participate in trans-border commerce without any entrance restrictions.
The continuous digital infrastructure enhancement will effectively resolve the two key restrictions impacting cross-border commerce: logistics and payments. Furthermore, Blockchain technology is also opening up a new realm of possibility for digital commerce.
Key takeaways from the report
1. The era of intelligence has arrived in global commerce
- Global commerce has entered the era of intelligence, where data factors will play a key role. By the time, digital technologies continue to be developed, the use of digital technology in commerce advances to a deeper and more comprehensive level.
- Critical infrastructure like 5G will help in the development of data distribution platforms and new network designs, as well as the Internet of Everything (IoE). Meanwhile, artificial intelligence and the massive collection of big data will play a major role in intelligent decision-making.
- Global commerce in this era is rapidly shifting from digitalisation to intelligence. Furthermore, “digital commerce” is the most recent development form.
2. Digital commerce development and maturity in the Asia Pacific
There are two dimensions to assess the growth and maturity of digital commerce in the region’s major economies: 60% cross-border e-commerce and 40% digitalisation. Following the examination, Asia Pacific markets were differentiated into the following:
- China, South Korea, Singapore and Japan are categorised into mature markets.
- Thailand, Malaysia, Indonesia, Vietnam and the Philippines are categorised into developing markets.
- Myanmar, Cambodia, Laos and Brunei are categorised into early-stage markets
3. The growth of micro-multinational enterprises (mMNEs) as the primary drivers of Asia Pacific’s digital commerce transformation
- Entrepreneurs and small businesses have transformed into mMNEs because of digital platforms, as they participate in cross-border e-commerce across global marketplaces.
- They offer worldwide buyers a diverse variety of “locally-made products” and light customisation services, contributing to over 85% of Asia Pacific’s cross-border eCommerce activity.
- Among the defining characteristics of mMNEs are:
- Have a better understanding of leveraging digital platforms
- Small scale business with generally less than 100 employees
- Multinational enterprises with an average of 3.56 overseas outlets
4. Payments and sales as the two trade functions with the highest level of digitisation
- Payments digitalisation has a penetration rate of 55%, while sales digitalisation has a penetration rate of 53%.
- For payments, sales and logistics, mature markets utilise more digital technology.
- Digitalisation levels in manufacturing and commerce are greater in developing countries.
SMEs play a critical role in the economic recovery in the region. With the help of cross-border online sales and payment infrastructures, as well as the RCEP coming into effect next year, SMEs in the region will have a stronger foothold in cross-border commerce. Many platforms seek to provide one-stop financial services to enterprises of all sizes, including payment, collection and exchange services. Therefore, business owners can focus on company growth.
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