For many years, when it comes to e-commerce, there has been one undisputed leader — Amazon. However, as consumers began changing their buying behaviour, newer brands began to pop up to upend the online shopping juggernaut. Take Shein for instance, the Chinese company that only recently took the world by a storm for its ultra fast fashion approach has overthrown Amazon, topping the chart as one of the most downloaded shopping apps in the world in 2021.

In fact, Shein is not the only one. According to the newest data from Apptopia, two other e-commerce companies leapfrogged Amazon in the global rankings: Shopee, based in Singapore, which serves Southeast Asia and Latin America; and Meesho, based in India, which specializes in social e-commerce for categories including fashion and home products.

All data is iOS + Google Play combined, except for data from China which is iOS only. Source: Apptopia

The US e-commerce giant came in fourth place overall in global shopping app installation last year. Just the year before, Amazon had the most app installs worldwide. It is fair to note though that Amazon is still first in Apptopia’s US rankings for shopping app installs in 2021. This is given considering data from Statista that shows the Seattle-based company holds 41% of the US e-commerce market in 2021.

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Singapore-based Shopee came in first with a total 203 million downloads while China-based Shein came in second with 190 million downloads and the company has been a growing force in the fast fashion market. India-based Meesho took the third spot with 153 million downloads.

Amazon, Shein, Shopee vs social commerce

At this point, online is growing at a torrid pace. New data from fintech and payments research specialists Kaleido Intelligence has found that B2B and B2C e-commerce spend on physical goods and digital services will reach US$6 trillion this year, up from US$4.8 trillion in 2020. 

But it is shopping on social media platforms that will top the chart as it is currently growing three times faster than traditional e-commerce platforms. In fact, it is on pace to reach US$1.2 trillion globally by 2025, according to a study by Accenture. Most of that growth (62%) will be driven by Gen Z and millennial shoppers.

“The social commerce opportunity will nearly triple by 2025. Growing at a CAGR of 26%, the social commerce opportunity will reach $1.2 trillion by 2025. This accounts for 16.7% of the US$7 trillion e-commerce total spend,” Accenture said in a separate report.

The report also believes that China will remain the most advanced market both in size and maturity, yet the highest growth will be seen in developing markets such as India and Brazil. As for the US, social commerce is expected to more than double, reaching US$99 billion by 2025.

The post Shein, Shopee and Meesho overtake Amazon in 2021 appeared first on Tech Wire Asia.

Kicked in on 1 January this year for 10 countries in the Asia Pacific, it was initiated in 2012 by the Association of Southeast Asian Nations (ASEAN) in order to strengthen ties with China and other APAC nations.

Asia and cross-border trade

The Asia Pacific, especially ASEAN, has long had a history of close and successful cross-border trading, primarily due to proximity and similarity of cultures, which facilitates logistics and market demand for goods. 

However, unlike the European Union (EU), the APAC region had been a little on the slower side to rectify existing bottlenecks in processes, laws, regulations, tariffs, and access to financing, especially in relation to global value chains. 

Furthermore, most trade agreements tend to be within these countries’ sub-regional parameters, i.e. Greater Asia, or Southeast Asia. 

Leading tech nations in Greater Asia — namely, Japan, South Korea, and China — have been embroiled in political tensions for decades, slowing inter-regional trade there.

This RCEP, interestingly, will mark the first time that China, Japan, and South Korea would be in a free trade agreement — certainly a movement that has gotten the world on the edges of their seats to see how it plays out.

Who are in the RCEP?

Ushered in four days ago, the RCEP agreement kicked into action for Brunei Darussalam, Cambodia, Laos, Singapore, Thailand, Vietnam, China, Japan, Australia, and New Zealand.

South Korea would join the bloc on 1 February 2022, 60 days after its ratification. Other signatory nations including Malaysia, Indonesia, Myanmar, and the Philippines are expected to ratify it soon. 

Their agreements will enter into force 60 days post ratification instrument deposit, acceptance, or approval to the Secretary-General of ASEAN. 

What will the RCEP bring for signatories?

The RCEP comprises a mix of low, medium, and high-income countries. Its key selling point is the elimination of tariffs for cross-border trade in goods. 

It is a big deal, as inter-Asia trade already is bigger than trade between Asia, North America and Europe put together. 

Once the RCEP came into effect, 65% of tariffs have gone down to zero — and this number is expected to rise to as much as 90% within 20 years. 

For RCEP exporters to enjoy these tariffs, they would need to abide by its common “rules of origin” framework, shared Ajay Sharma, HSBC’s regional head of global trade and receivables finance for the Asia Pacific, in a report by SCMP. 

This means sourcing at least 40% of inputs from within the RCEP bloc, in order for their end-products to enjoy the tariffs when they’re exported to other member nations. 

Sharma further opined that diversification of supply chains and FDI (foreign direct investment) will be accelerated as companies will find it easier to use ASEAN as a base of production, given lower associated business costs. 

He also added that it would “streamline existing FTAs in APAC and strengthen intra-regional trade linkages.”

Digitalization and cross-border trade in ASEAN

As previously mentioned, cross-border trade in ASEAN has been strong and will keep growing as regional cooperation between private and government players further harness the power of technology, given the pandemic’s movement restrictions.

According to Google, Temasek, and Bain, Southeast Asia is predicted to reach a US$1 trillion digital economy by 2030. 

Whilst trade was admittedly negatively impacted by the pandemic in the past two years, heavy damage was largely averted through several approaches. 

Digitalization in the form of enhanced digital connectivity, automation of operational services, and strong governmental policies prioritizing digitalization in cross-border trade played a huge role in dampening the effects of the pandemic in ASEAN.

Furthermore, the region is one that’s quick to recognize and take advantage of fintech. This is largely applied to foster better financial inclusion, in the region home to the world’s largest population of unbanked and underbanked consumers. 

The Asia Pacific has a huge appetite for fintech — reflecting the changing finance and banking landscape, as well as consumer demand, in these regions.

According to Findexable, five ASEAN nations — namely Singapore, Indonesia, Malaysia, Thailand, and Vietnam, are also in the top 20 Asian fintech nations. Findexable publishes the annual Global Fintech Rankings.

For example, the central banks of Malaysia and Thailand launched a cross-border QR payment system in June last year. The retail payment linkage enables consumers and merchants in both countries to make and receive instant cross-border QR code payments.

Both countries had recently undergone pivotal shifts in digitalizing payments. Malaysia promoted its real-time retail payment system and DuitNow, whereas Thailand charted an e-payment roadmap to bolster intra and inter-country retail e-payments.

Multiple countries in Asia have or are in the process of embarking on their own sovereign digital currencies, or, CBDCs (central bank digital currency). 

Singapore has taken the lead to develop retail CBDC through the Global CBDC Challenge, whereas Malaysia is still experimenting. 

In September last year, it was reported by Tech Wire Asia that central banks of Singapore, Australia, Malaysia, and South Africa will develop prototypes and test shared platforms to process cross-border digital currency transactions. 

China has successfully carried out multiple iterations of its digital yuan trials, and Japan is reportedly looking at starting its own too.

The RCEP and ASEAN’s digital economy dominance

Aside from fostering smoother payments, digitalization brings with it a host of other benefits for businesses and consumers alike, especially in the digital payments powerhouse that is Southeast Asia. 

E-Commerce has been identified as a key driving force of strong intra-regional trade between countries, and its potential is immense in developing nations such as the Philippines.

The role that technologies such as AI and analytics play, especially in e-Commerce, cannot be underestimated too. 

E-Commerce players are not just concerned with swimming with small fish — they have far bigger fish (markets) to fry.

Last year, China-based fashion mogul Shein overtook Amazon as the biggest fashion mobile e-Commerce platform in the US. Shein has quietly racked up a valuation that exceeds US$15 billion, too.

In Thailand, fashion e-commerce players such as Pomelo have developed their own machine learning system to boost their platform presence. 

Furthermore, emerging fintech such as BNPL also play a part in growing financial inclusion for not just consumers, but MSMEs (micro and SMEs) as well. 

A report by Deloitte predicts that digital trade will further accelerate, and leapfrog the region into the golden age of digital trade within the next three years.

The report also suggests that this pivotal shift will be largely facilitated by increased dynamic cross-border e-Commerce activities, which are further strengthened by regional cooperation through the RCEP, increased digitalized lifestyles, and the ongoing development of digital infrastructures.

It’s just a matter of when — not if.

The post APAC will dominate the digital economy with RCEP appeared first on Tech Wire Asia.

The automotive industry has entered into an intense era of collaboration among carmakers, technology giants, and even software start-ups, among others.

This trend comes as countries, including China, accelerate into increased usage of EVs and AVs. Numerous partnerships have sprouted up in the past year, adding density and life to this ecosystem. 

Among Chinese automakers themselves, a handful of significant partnerships were made to accelerate the developments of EVs and AVs within the country.

In fact, China is shaping up to be the first real test of Big Tech’s ambitions in the world of car making. 

Take tech giant Baidu for an example, just 11 months after announcing that it is collaborating with automaker Geely to start a new company to build connected, autonomous electric vehicles, Baidu, which runs Chinese top search engine and a mapping app, announced that they would start mass production of its first “robot” EVs in 2023.

JiDU Auto, the electric vehicle venture between Baidu and Geely, would make EVs that are of the autonomous Level-four (L4), which needs no human intervention, Baidu Chief Executive Robin Li said during the company’s Baidu’s annual developers’ conference on Monday. 

JiDU was established only in March this year and in a mere 207 days, the venture reached the stage of developing intelligent driving and intelligent cockpit for a SIMU car.

This has set a new record in the industry, according to the CEO — last August, the internet company had launched a robocar with L5 autonomous driving capabilities. 

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This time, the automotive robot, deemed by Baidu as the ultimate form of vehicle transportation in the future, will demonstrate JiDU’s three aspects of their product philosophy.

First, the vehicle will have L4 autonomous driving capabilities to empower freedom of movement.

Second, the robot vehicle can communicate naturally with human beings thanks to the accurate recognition of human-vehicle interaction and speech semantics. 

Finally, the robocar is expected to have the capability to self-learn and self-iterate, which will continue to study user habits and improve user experience based on the habit data.

According to Baidu’s vision, intelligent transportation is the result of the deep integration of technologies as Artificial Intelligence (AI), 5G, and cloud computing into the transportation segment, based on autonomous driving, smart vehicles, and intelligent roads. 

The company also said that intelligent transportation can cut traffic accidents by 90%. Baidu’s autonomous driving capabilities have made rapid progress in recent months. As autonomous driving technologies develop, these vehicles will eventually be safer than human drivers, the company claims.

According to reports, with 115,000 rides provided in the third quarter of the year, Baidu’s autonomous ride-hailing platform Apollo Go has become the world’s largest autonomous mobility service provider.

Just last month, Baidu and self-driving startup Pony.ai won approval to launch paid, driverless robo taxi services that will see the firms deploy not more than 100 vehicles in Beijing.

According to Baidu’s statement, it would be its Apollo Go service’s first commercial deployment on open roads. The company is aiming for the Apollo Go service to be in 65 cities by 2025 and 100 cities by 2030, Li said during its latest quarterly results.

Besides Baidu, Geely and Pony.ai, Chinese electric-car maker BYD Co. is also apparently building a joint venture with tech startup Momenta to develop autonomous driving technology, according to Reuters.

It is said that BYD and Momenta have established a 100 million yuan three-way partnership to deploy autonomous driving capabilities throughout BYD automobile mannequin strains.

Known as DiPi Intelligent Mobility Co, the new partnership will combine BYD’s expertise in the auto sector with Momenta’s experience in smart driving algorithms, the startup said in a statement on Monday.

Reports are claiming that the preliminary scope of labor will embrace deploying “Level 2 plus” autonomous driving functionality throughout some car mannequin strains.

Separately, even SAIC Mobility, a unit of Chinese automaker SAIC Motor and Momenta, started providing autonomous robotaxi test rides to the general public in a Shanghai district as a part of a trial, earlier this month.

The post More Chinese automakers collaborating on EVs, AVs appeared first on Tech Wire Asia.

Update: Intel issued an apology statement briefly after this article was published.  The tech giant said that its commitment to avoid supply chains from Xinjiang was an expression of compliance with US law, rather than a statement of its position on the issue.

The United States has long criticized China over the alleged widespread torture and repression of the mostly Muslim Uyghurs and other religious and ethnic minorities in Xinjiang.

At the same time, Beijing has repeatedly dismissed all those allegations and claimed it to be borne of “political motivation” and “disinformation.”

Allegations and retaliation from both parties have resulted in continued tit-for-tat sanctions with Washington banning imports from the region and China taking “necessary measures” to prove its steadfastness.

To recall, the Chinese government’s oppression of Uyghurs and other Turkic Muslims in the region is not a new phenomenon, but in recent years, has reached unprecedented levels.

By July this year, the White House opted to issue a tough warning to US companies doing business in the Xinjiang province.

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Calling US investments a potential threat, the government has warned American firms that they may wind up breaking the law if they don’t leave the region, a move that has prompted accusations of hypocrisy from Beijing.

In a Xinjiang Supply Chain Business Advisory published jointly by the State Department, Treasury, Commerce, Homeland Security, Labor, and the Office of the US Trade Representative, it was stated that “Businesses and individuals that do not exit supply chains, ventures, and/or investments connected to Xinjiang could run a high risk of violating US law.”

Between a rock and a hard place, there is Intel

In 1985, when Intel entered the Chinese market, it was one of the first American companies to do so following China’s reform and opening-up.

Inevitably, the company has reaped huge benefits from China over those decades — by 2020, 26% of Intel’s revenue came from mainland China and nearby Hong Kong.

Nearly 10% of the company’s properties, factories, and equipment are located in China. 

Yet, to the surprise of many, especially Chinese netizens, the US chipmaker told its suppliers in a public letter to not source products or labor from the northwestern region of Xinjiang.

According to a report by Reuters, Intel said it had been “required to ensure that its supply chain does not use any labor or source goods or services from the Xinjiang region”, following restrictions imposed by “multiple governments”.

Intel just joined sanction on suppliers frm #Xinjiang, China pic.twitter.com/2T7TSJEd1Q

— Carl Zha (@CarlZha) December 21, 2021

The letter has caused a stir and led to severe criticism from Chinese users on Chinese social media, especially Twitter-like service Weibo.

In fact, Bloomberg said a hashtag on the topic has generated more than 250 million views on Weibo.

As the nationalist tabloid run by the ruling Communist Party’s People’s Daily, Global Times puts it, the move by Intel is “an attempt to prove the company’s own innocence under the pressure of the extreme political environment in the US, as well as pleasing US society with some fine words.”

To date, not many American companies have done what Intel did.

Global Times, in a separate report, added: “Most US enterprises, which Chinese people are familiar with, hesitantly and negatively support Washington’s demands to boycott Xinjiang’s products made by the so-called forced labor,”

Experts reckon that Intel “could afford this move simply because there are very few Xinjiang products in its current supply chain, and its CPU is rigidly demanded in China.”

It seems that Intel isn’t worried about retaliation from China and sees this as a move that favors the US and Western world, never mind that China is Intel’s largest international source of business revenue for six consecutive years. 

Even in Europe earlier this year, French authorities opened a “crimes against humanity” probe into four fashion brands namely Uniqlo, Zara-owner Inditex, and French textile firm SMCP (not to be confused with news outlet South China Morning Post).

The move came after complaints from the European Uyghur Institute and other pressure groups that those retailers were profiting from the use of forced labor from Xinjiang.

For context, the Xinjiang region produces 85% of China’s cotton and accounts for about a fifth of global cotton supplies.

A quick apology

Briefly after this article was published, Intel issued an apology statement over its open letter to suppliers. “We apologise for the trouble caused to our respected Chinese customers, partners and the public. Intel is committed to becoming a trusted technology partner and accelerating joint development with China,” Intel said as per Reuters‘ report.

The post Intel under fire in China after shunning Xinjiang appeared first on Tech Wire Asia.

Alibaba, one of the world’s largest e-commerce companies, have lately been doing all it takes to navigate a new regulatory environment amid Beijing’s crackdown on the country’s tech sector. It started with a recent biggest reshuffle and now the company is looking at accelerating its overseas expansion, targeting a long-term goal of quintupling gross merchandise value (GMV).

During the Alibaba Investor Day conference call last week, the company’s CEO Zhang Yong shared that the e-commerce giant is targeting a long-term goal of quintupling GMV, the sum of transactions across Lazada’s platforms, to US$100 billion. Alibaba is eyeing for Lazada to serve more than 300 million users eventually, according to a slideshow posted on its website.

Zhang also said that the company’s three strategies including domestic demand, globalization and advanced technology have progressed. To recall, based on the earnings report released by the company on November 18, Alibaba’s global business volume grew 41%, with extensive coverage in approximately 200 countries and regions around the world. 

To recall, Alibaba took over Singapore-based Lazada in 2016 and have ever since been the Chinese corporation’s main e-commerce business in the booming Southeast Asian market. Based on a Bloomberg report, Lazada has grown its GMV to about US$21 billion over the past 12 months, after enlarging its active consumer base by 1.8 times to 130 million from March 2020 through September this year.

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Lazada’s Zhang is optimistic and sees a “huge potential in the international markets” going forwards. “In Southeast Asia, ecommerce penetration is only 11%, and Lazada’s annual consumers have reached only 34% of regional Internet users. There’s tremendous potential in both the overall market size and our penetration,” he added.

Lazada, however, has been losing out to Sea Ltd. ‘s Shopee, which also operates in Southeast Asia and Taiwan over the last few years. For context, Shopee reported more than US$56 billion of transactions over the four quarters to the end of September. 

Alibaba’s incoming chief financial officer Toby Xu said during the presentation last week that its China commerce segment has faced “near-term challenges of a slowing macro-environment and a heightened level of competition.” That, he said, has resulted in slower GMV and the revenue growth in the most recent quarter, Xu said. “But we also see opportunities to tap into new addressable markets to grow new users that will position us well for the long term.”

The post Alibaba targets US$100 billion SEA e-commerce business appeared first on Tech Wire Asia.

In fact, just Southeast Asia alone is predicted to reach a US$1 trillion digital economy by 2030, according to Google, Temasek, and Bain.

It might even overtake the West’s digital economy, and this is quickly showing potential with just how cross-border trade is flourishing in the region.  

According to a new report by Deloitte published yesterday, the ‘Technology-empowered Digital Trade in Asia Pacific’, the firm predicts that digital trade will further accelerate, and leapfrog the region into the golden age of digital trade in the next three years.

The report accounts for this dramatic shift through increased dynamic cross-border e-Commerce activities, strengthened regional cooperation through the RCEP, increased digitalized lifestyles, and ongoing development of digital infrastructures.

According to Taylor Lam, Vice-Chair and Technology, Media & Telecommunications Industry Leader at Deloitte China, the combination of the Covid-19 pandemic together with these other factors will see new development opportunities in digital trade.

“Digital technologies enable global sellers to participate in global trade without any entry barriers,” said Gary Wu, Deloitte Global Lead Client Service Partner.” 

Wu also added that the continuous improvement of digital infrastructure will effectively resolve the two major constraints affecting cross-border trade: logistics and payments, with blockchain technology also “creating a new space of imagination for digital trade.”

Digitalization, mMNEs will drive cross border trade

The report highlighted some key insights for the Asia Pacific, with the first revolving around key technologies and the important role they play. 

According to Deloitte, data factors will feature prominently alongside how other critical infrastructure such as 5G, which will help build data distribution platforms and new network architectures and facilitate the Internet of Everything (IoE). Unsurprisingly, AI will continue working alongside big data to bring deeper insights for better decision making. 

Secondly, the report identified and analyzed various APAC markets for the development and maturity of digital trade across two dimensions: cross-border e-Commerce (60%) and digitalization (40%).

Deloitte classifies the markets as follows: 

• Mature markets: China, South Korea, Singapore, and Japan;
• Developing markets: Thailand, Malaysia, Indonesia, Vietnam, and the Philippines;
• Early-stage markets: Myanmar, Cambodia, Laos, and Brunei.

Comparison of the three market types in terms of development (IMG/Deloitte)

Thirdly, there is a substantial rise of micro-multinational enterprises (mMNEs) in the region, which has been identified as the main driver of the transformation of digital trade across the Asia Pacific.

With the help of digital platforms, entrepreneurs and small businesses have become mMNEs as they are engaged in cross-border e-commerce across global markets.

mMNEs provide diversified “locally-made products” and light customization services for global buyers while contributing to over 85% of Asia Pacific’s cross-border e-commerce activities.

Here are the main characteristics of an mMNE:

• More adept at leveraging digital platforms
• Small in scale, typically with fewer than 100 employees
• Globalized operations with an average of 3.56 overseas outlets

Regional cross border business opportunities 

Invariably, the degree of digitalization differs across markets, depending on their maturity stage. As digitalization is a yardstick by which market maturity can be measured, it is crucial to track the development of digitalization across developing and early-stage markets.

Matured markets generally fared better in terms of sales, payments, and logistics, whereas developing markets tended to lead in production and trading. 

Understandably, early-stage markets are still in their nascent stages of digitalization across all facets of cross-border e-Commerce. 

Vietnam, as expected, leads digitalization in terms of production, whereas Indonesia leads in trading. Singapore, a mature market, leads in digital payments as well as logistics digitalization. 

However, this isn’t always linear. 

Degree of digitalization in cross border e-Commerce verticals (IMG/Deloitte)

Interestingly, the report found that Malaysia, classified as a developing market, leads the APAC region in e-Commerce market size at US$6.3 billion. This is a whopping 61.4% of the total e-Commerce market size in China. 

The Southeast Asian nation of 32 million also has the highest penetration rate for sales digitalization for cross-border e-Commerce, at 65.7%. However, Malaysia suffers from bottlenecks such as logistics and production (20.2%). 

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At present, cross-border consumption only accounts for 42% of the market size of the internet economy in Malaysia, which is much lower than mature markets.

Although Indonesia leads digitalization in trading, they are still lagging far behind in production, sales, payments, and logistics. Indonesia has been pointed out by experts to lead the Southeast Asian region in terms of the digital economy. 

Vietnam seems to be steadily rising and doing decently in digitalization across most other facets of e-Commerce, whilst also leading digitalization in production. 

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For these developing markets to move towards maturity, these areas, especially logistics, would need to see more work in terms of development and sophistication.

But at the same time, this presents huge opportunities for private players to come in and develop these industries in these countries.

The state of e-Commerce: Opportunities and analyses

Deloitte expects that the e-Commerce consumer market in APAC will continue increasing in line with continuous digitalization penetration. Here are other key takeaways:

• Singapore: Within Asia Pacific, Singapore continues to act as a central hub for many cross-border e-commerce platforms in Southeast Asia, with companies such as Shopee, Lazada, Amazon, and Zalora setting up their headquarters there. The e-commerce market in Singapore is predicted to double in size in 2025 compared with 2020, with gross merchandise volume (GMV) amounting to US$8 billion.
• Indonesia: Demographic dividend, internet penetration rate, and consumer habits create great potential for developing e-commerce and cross-border e-commerce in Indonesia. Social e-commerce is thriving, and consumers are fond of trading on social media. Indonesian consumers like buying in-expensive products, and the average transaction is low at US$36, much lower than Malaysia (US$54) and Singapore (US$91). Users also prefer e-commerce platforms in their local language, which greatly affects their shopping experience.
• The Philippines: E-commerce has huge growth potential but is constrained by a low internet penetration rate and an undeveloped e-payment industry – the penetration rate of e-commerce users only accounts for 39% of the total population.
• Thailand: The penetration rate of cross-border e-commerce in Thailand is relatively high and has a certain digitalization foundation, but their degree of development is limited. However, quality improvements of internet infrastructure will raise the efficiency of information exchanges and unleash the vitality of e-commerce platforms.
• Vietnam: Although high logistics costs are almost the biggest challenge in cross-border e-commerce in the APAC, 61.8% of the surveyed enterprises in Vietnam believe that the largest challenge is the difficulty in customs clearance inspections, with more than 60% of businesses focusing on green development goals.
• Brunei: Brunei takes the lead in internet penetration rate in Asia even though early-stage markets have a relatively low overall level of digitalization, and generally have no sophisticated infrastructure and platforms in place to develop the digital industry.

The post Asia Pacific’s golden age in cross border e-Commerce has begun: Here are the opportunities appeared first on Tech Wire Asia.

We are living through times where the opportunity for social media as a sales channel cannot be ignored. It is the sheer amount of time spent by people, especially younger generations, on social media apps that are making social commerce the new indisputable market trend.

Being one of the youngest and largest communities in the world, Southeast Asia has been and is expected to continue being the biggest market for social commerce. Especially given how a large chunk of its population is entering its prime of technology adoption. 

In fact, according to the latest report by Google, Temasek Holdings, and Bain & Company, more than 75% of the population in six major Southeast Asian countries have access to the internet. To top it off, this year alone, as many as 40 million people across Singapore, Malaysia, Indonesia, the Philippines, Vietnam, and Thailand came online for the first time. 

That has led to the total number of internet users in those six countries rising to over 440 million people, of which 80% made an online purchase at least once, the report said. In short, it is clear that social commerce offers significant long-term potential for businesses willing to leverage it.

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Tech Wire Asia had the opportunity recently to speak with iKala’s CEO & Co-Founder, Sega Cheng to discuss the potential for social commerce within the Southeast Asian region. For context, iKala recently published a report titled ‘Riding the Pandemic Wave & Beyond’ which surveyed 1600 social shoppers and more than 23,600 social sellers across Thailand, Malaysia, the Philippines, and Singapore to identify emerging trends in the region’s social commerce space.

What does the rise of social commerce mean for SEA’s retail industry?

Southeast Asia is home to some of the most avid social media users in the world, and in recent years, many of them have started leveraging social platforms not just to connect and explore, but also to shop. According to our new research report, social commerce (78%) has overtaken traditional brick-and-mortar (35%) to become the second most preferred shopping channel in the region, second only to e-commerce platforms (91%).

As usage continues to increase, social media platforms — from Facebook to TikTok — are rapidly adding new shopping features and capabilities to support the surge in demand. This is creating new channels and opportunities for retailers to easily reach shoppers and provide them with unique, engaging experiences.

But these opportunities are not without their challenges. Higher shopper expectations mean retailers need to work harder than ever to win consumers’ attention and share of wallet. Fortunately, technology is evolving at an equal pace — and leveraging the right tools will enable them to unlock growth.

How has the pandemic played a role in accelerating the transformation of the industry?

The agility and convenience of shopping on social media had already made it a popular alternative to e-commerce and brick-and-mortar in recent years, but the pandemic has played a huge role in accelerating the growth of this format. The closure of physical stores amidst Covid-19 restrictions saw consumers flocking to online mediums for all their shopping needs. 

Those who weren’t already selling via online channels had to quickly pivot towards a digital-first strategy, while those who did have an online presence began to look at new, innovative ways of engaging with their customers. These shifts in shopper behavior are here to stay. For brands, the key to success is to focus on ways in which they can continue to engage and hold the attention of their customers through emerging digital platforms and channels.

Which of these trends are the most crucial for brands to note & take action on?

Our research found that not only are consumers buying in higher volumes and more frequently on social media, they’re also exploring newer shopping categories. Social commerce is no longer restricted to categories like clothing, beauty, and electronics. 

Pandemic-induced lockdowns and restrictions across Southeast Asia have prompted more people to turn to social media for essentials, including food and beverage (F&B) and grocery shopping.

In fact, the latest report by Facebook, Bain & Company found that groceries were the fastest growing online shopping segment in the region for this year.

As the landscape continues to evolve, opportunities are emerging in new and underpenetrated sectors. It is imperative for brands to keep an eye on these changing trends and adapt quickly in order to achieve success in the new shopping world. In fact, retailers who are quick to make shifts are already reporting tremendous success. 

One example is e-grocer HappyFresh, which reported a 10-20x growth in online traffic in Indonesia, Malaysia, and Thailand amidst the pandemic last year.

What does the future of retail look like (bearing in mind these new trends)?

The retail industry is undergoing a massive shift right now. As physical retail came to a standstill amidst global restrictions and lockdown orders, online shopping thrived. Trends like social commerce and live-selling are growing at an exhilarating pace — and this is only going to intensify.

The rules of retail are changing, which means that brands and sellers must either adapt now or lose out. The key to success lies in adopting emerging technologies and providing consumers with new and unique experiences. It is crucial for brands, retailers, and even individual sellers to start looking at social commerce as a long-term sales solution instead of a short-term gimmick. They need to be willing to invest in a growing array of value-adding technologies to lay the foundations of a robust strategy.

The post The age of social commerce will be powered by Southeast Asia appeared first on Tech Wire Asia.

In April this year, the Bank of Japan (BoJ) launched the first phase of its central bank digital currency (CBDC) experiment. Although the country’s central bank has no definite plans to issue a CBDC anytime soon, it’s executive director Shinichi Uchida did say that if BoJ were to do so, the digital currency would need to co-exist with private-sector payment services.

The private sector were fast enough to respond to the idea, with a consortium of approximately 70 Japanese firms and three of the country’s mega-banks now planning to test out a yen-based digital currency, tentatively known as “DCJPY”, in the coming months.

Post trial period, the consortium has an end goal of launching the DCJPY by fiscal 2022. A report by Reuters noted that the digital currency will be backed by bank deposits and will use a common platform to speed up large-scale fund transfers and settlement among companies.

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Jamilah Lim | 7 July, 2021

The consortium includes Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc, Sumitomo Mitsui Financial Group Inc, and other lenders such as Japan Post Bank Co Ltd, brokerages and insurers, as well as non-financial firms such as Nippon Telegraph & Telephone Corp, Kansai Electric Power Co Inc and East Japan Railway Co. Some will even participate in experiments to gauge such a currency’s use in industries ranging from energy to retail.

The group have apparently been meeting regularly since last year to study ways to build a common settlement infrastructure for digital payments. Although the three mega-banks have each introduced their own digital payment systems, it has lagged efforts by technology firms such as PayPay, according to Reuters.

To recall, last year, BoJ published a CBDC document in which it outlined three stages of trials, including two phases for Proofs of Concept followed by a pilot. Japan’s objectives have been a little different from most countries because of the heavy use of cash in retail payments.

Although the cash usage is still high, the BoJ is keen to be prepared for change. As per data available, around 82% of payments involve the use of cash, and whilst the pandemic has encouraged the cash-loving Japanese to move away from physical money, the country’s fast-ageing population are resisting change.

According to a report by Reuters, Japan’s currency in circulation and bank deposits even rose at a record pace during the pandemic, which prompted businesses and households to continue hoarding cash. 

Even the BoJ reckons that for the time being, it is unlikely that the cash in circulation would drop significantly. “If, however, this should become the case, and if private digital money will not substitute for the functions of cash sufficiently, the Bank might provide general purpose CBDC as a payment instrument alongside cash. As long as there is public demand for cash, the Bank will stay committed to supplying it,” said the bank.

In short, even without the decline in cash circulation, if CBDC is needed from the viewpoint of enhancing the stability and efficiency of the overall payment and settlement systems, the central bank would  only issue CBDC in order to support private payment services.

The post Japan plans a new bank-deposit-backed digital currency appeared first on Tech Wire Asia.

Some of the recent cyberattacks in Singapore include a data breach at an employment agency and a massive ransomware attack on a specialist medical clinic, the Eye & Retina Surgeons.

INCREASING CYBERATTACKS TARGETING THE CLOUD SECURITY NETWORK IN SINGAPORE

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According to the Cybersecurity Agency of Singapore, ransomware incidents, online scams, and Covid-19-related phishing activities dominated the cyber landscape of 2020. The agency also feels the cyber pandemic will persist to affect organizations in 2021, as cybercriminals continue to find ways both new and old to wreak havoc on organizations.

Several security vendors have warned that organizations in the region particularly in Singapore are at imminent threat of cyberattacks, especially with many organizations still not implementing enough cyber security protection, as well as not updating their solutions as much as they should.  Cisco’s Cybersecurity for SMBs: Asia Pacific Businesses Prepare for Digital Defense study showed that two in five Singaporean SMEs have suffered a cyber incident in the past year, with more than half (56%) of these incidents seeing customers lose information to the hands of malicious actors.

And just as predicted, the Singapore healthcare industry has suffered another breach. This time, personal details of Fullerton Health customers, a leading integrated healthcare platform provider, was stolen by hackers and hawked online — after a vendor of the private healthcare group suffered a breach earlier this month.

The Straits Times reported that the data was put up for sale on hacking forums from Oct 11 and could be bought for US$600 in Bitcoin. Hackers have since removed the data sale set, indicating someone may have bought it, or to avoid the authorities. The hackers claimed they managed to steal the data of some 400,000 people, including the insurance policy details of many Singaporeans.

Singapore media also reported that the data uploaded included customer names, identity card numbers, information about bank accounts, employers, and medical history as well as the personal details of the customers’ children.

Reports show that the breach was of a server used by Agape Connecting People, a social enterprise that provides contact center services. Agape was engaged as a vendor to handle bookings by Fullerton Health customers. The medical service provider discovered the breach shortly before informing Agape on Oct 19.

Kamal Brar, Vice President and General Manager, Asia Pacific and Japan at Rubrik shared his views on the data breach with Tech Wire Asia. For him, any organization that falls victim to a cyberattack, is just a victim.

“The truth is, there is no silver bullet to stop 100% of all cyberattacks. Some of the world’s largest businesses and government agencies have also been compromised and they would have had all the latest anti-malware and perimeter security solutions. The challenge is that the fight against cyber attackers is asymmetric. An organization needs to stop all attacks to be successful, while a hacker only needs one malicious email to be clicked to completely compromise an organization,” said Kamal.

With this in mind, Kamal believes organizations need to look beyond their perimeter defenses and consider how quickly they can remediate and their business back up and running following an attack.

“The Singapore Computer Emergency Response Team explains that businesses need to maintain backup copies of their database and files regularly. They further advise that businesses regularly monitor and review administrator-level accounts and privileges for access and activities,” added Kamal.

As such, with the cyber pandemic still a pervasive concern in Singapore and the ASEAN region as well, enterprises need to ensure they have sufficient backup and recovery solutions in place, to ensure their services and operations are not disrupted for any meaningful length of time.

The post Cyber pandemic drags on in Singapore with another healthcare data breach appeared first on Tech Wire Asia.

The semiconductor market in China is by far the largest, accounting for about 35% of the global market share, surpassing the US, Europe, Japan and even Taiwan, which is home to the largest manufacturer of semiconductor chips. Yet, the development of China’s semiconductor technology lags behind, and it exposes the urgent need of new talent to meet the growing market demand while supplies are squeezed due to the pandemic.

In fact, according to a report published this year by the China Institute for Educational Finance Research at Peking University, the shortfall of talent in the country’s semiconductor industry doubled in 2019 to about 300,000 from 150,000 in 2015.  In fact, it is predicted that China will still have a shortage of about 250,000 specialists by 2022, a White Paper on Talents in China’s Integrated Circuit Industry 2019-2020 claimed.

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Dashveenjit Kaur | 21 October, 2021

While the problem is not unique to China, a recent report by South China Morning Post (SCMP) said it could be increasingly detrimental to the country’s quest to gain self-sufficiency in its fledgling semiconductor industry to fend off supply chain risks.

But based on a recent report by investment bank China International Capital Corporation (CICC), it is not a number issue, but it is regarding quality. In short, there is a lack of industry leaders, especially in chip manufacturing.

The current semiconductor job landscape in China

China had 510,000 people employed in the semiconductor industry, as of the end of 2019, up by 11% year-on-year (YoY), with 350,000 of those working directly in either design or manufacturing, according to SCMP. By comparison, the US had about 280,000 professionals in semiconductor design and manufacturing.

It is not that the government is not doing something about it. To recall, in August last year, China issued its Number 8 policy, three months after the Trump administration barred Huawei from sourcing chips from the global foundries. The policy is a detailed guideline to shore up its semiconductor industry with tax incentives, supportive financing and better training schemes emphasizing a blend of academia and industry.

Fortunately, Tsinghua University in China, a locally-claimed prestige university,  established a specialised chip college in April this year. The semiconductor school is based on Tsinghua’s original departments of microelectronics, nanoelectronics and electrical engineering, according to state news. The goal is to train much-needed semiconductor engineers and ultimately to achieve the national goal of chip self-efficiency amid a global shortage which is exacerbated by the tech war between Washington and Beijing.

The post China is fighting a chronic talent shortage in the semiconductor industry appeared first on Tech Wire Asia.