Digital Transformation in Southeast Asia
Countries in Southeast Asia region are bracing themselves for the impact of digital revolution.
There is no doubt that Asia has experienced phenomenal growth over the last decade. Experts believe by 2030, the continent will account for the largest share of global GDP. As a result, marketers have been particularly keen on keeping close watch on business trends that shape the Asian market.
Like the rest of the world, Asia is also undergoing massive transformation thanks to digital disruption. Two of the largest economies in the continent, China and Japan, are actively promoting digital transformation policies. The ripple effects traveled as far as developing nations that occupy most of Southeast Asia.
Digital Transformation in ASEAN
When it comes to technology and how it reshapes industries, I think there’s nothing quite exciting as Southeast Asia countries. These countries are moving quickly to prepare their economies for the impact of the 4th industrial revolution. According to Google, the region has a fast-growing digital economy predicted to hit $200 billion by 2025, with 261% of growth expectation in e-commerce.
Naturally, the increase of the number of young professionals with disposable incomes is one of the factors contributing to this phenomenon. But I believe the rising mobile devices usage and internet penetration are the main keys that really catapult Southeast Asia’s digital market to a new level. ASEAN consumers, after all, rely heavily on digital data to make their purchasing decisions.
You can see the evidences of digital impact on the consumption of goods and services all over the countries. From new online grocers and marketplaces popping on the countries’ capital cities to e-commerce giants collaborating with government agencies to upgrade the countries’ logistical and technological infrastructures, it is clear that to capture the enormous opportunities offered by the region, businesses need a digital ASEAN strategy.
Effect of Digital Transformation in ASEAN
The prospects of ASEAN market is strong, which is why more investors look for a way to tap into the market either in logistical infrastructure or expanding partnerships. Here are some effects of the digital revolution that I believe are particularly relevant for any companies planning to develop digital ASEAN strategies.
Technology-driven Infrastructure
One of the issues, I notice, of the pre-digitalization in ASEAN is the lack of modernization in its infrastructure. Heavy traffic has become part of the daily routine of citizens living in Indonesia, Philippines, Thailand, Malaysia, and Vietnam. At such, digitization is transforming Southeast Asia’s economic growth, while stimulating demand for better living space and lifestyles.
Thanks to the digital revolution, government of Southeast Asia countries has begun to look for partnerships with other more advanced countries to upgrade the cities’ infrastructures and operations to drive the growth of digital economy. One of the examples is how Malaysia partnering with Alibaba Group for modernization of the city’s infrastructure to solve the heavy traffic issue that its citizens often face in regular basis. Online transportation provider such as Grab, managed to utilize this opportunity and collaborate with Malaysian government to provide better services and experiences for its users.
The rise of digitally conscious customers
Digital technology has transformed consumer behaviors. Mobile devices, apps, social media, influencers, all of these allow every day customers to get their hands on exactly what they want whenever they need it. What’s more, these technologies have created a shift in consumer expectations, resulting in a new kind of modern buyer, one that constantly looks for easy channels to deliver their products and services directly to their doors.
This situation also translates into dramatic changes in consumer demands for new customer experience and how business react while interacting with these modern buyers. From sharing relevant news to educate the digital customers, utilizing digital channels to market their products or services to constant tracking of online feedback and reviews, I believe businesses have to adopt the new ‘digital-first’ approach.
Influencer Marketing
Internet penetration and social media usage in Southeast Asia is among the highest. More potential buyers spend most of their time perusing social media websites and channels to look for news, information, and current trends. This is, in my opinion, where influencer marketing works best.
Thanks to technology, customers are more cautious nowadays when they are about to make a purchase. Social media savvies utilized this opportunity to become influential figures, sharing opinions and creative contents to gather loyal communities. These people, known as influencers or KOLs (Key Opinion Leaders) are the keys for modern marketing in Southeast Asian countries. Ad-resistant customers react better towards the words of an influencer simply because they trust him/her. There is no doubt that businesses trying to tap into ASEAN market needs to consider influencer marketing as one of the fastest ways to gain awareness and build a solid brand image.
Bottom Line
With the increase of business activities in Southeast Asia and market saturation in China and Japan, I wouldn’t be surprised to see marketers begin to invest their resources in ASEAN countries. As for businesses in ASEAN, thanks to today’s fast-moving and “always connected” society, it is imperative for companies to seriously consider implementing digital transformation strategy, if they are not already doing so.
More than that, it is also crucial to understand that as marketing goal shifted from traditional value of pitching sales to a more sophisticated mission of earning customer loyalty, marketers need to focus their effort on improving their online presence via real-time engagement as well as providing their target audiences with an authentic brand story that could resonate with them on personal level.
