E-Business Development Services for SMEs in Selected ASEAN Countries and Southern China

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This rising affluence is translating into dramatic changes in the hottest growth sectors for consumer products. Moreover, these affluent consumers are internationally minded, discerning, and interested in unique and customized products and experiences—demands that digital commerce is particularly well positioned to fulfill. The choices of affluent consumers also exert a strong influence on the MAC segment overall. In Vietnam, for example, returning expatriates known as viet kius are opinion leaders when it comes to lifestyle, fashion, and eating out.

Urbanization is accelerating well beyond such major metropolises as Bangkok, Jakarta, Manila, and Ho Chi Minh City and into so-called tier-two and tier-three cities and districts. For example, BCG projects that the number of tier-one cities—those with more than a million middle-class and affluent inhabitants—will increase from 14 to 47 between and ; but the number of tier-two cities—those with MAC populations between , and 1 million—is expected to jump from 35 to 98 over that period, and the number of tier-three cities MAC populations of , to , from 90 to It is driving economic growth, stimulating demand for services, and creating big concentrations of middle-class and affluent consumers with common tastes and interests.

Infrastructure challenges in key cities and other factors are driving the growth of the digital economy. Where merely making a U-turn in heavy traffic can take half an hour, for instance, access to home delivery can be a major advantage. Growing Demand for Convenience. One outgrowth of increased population density is the demand for convenience. As people spend more time commuting to work, and as traffic congestion grows more severe, Southeast Asian urbanites are already shopping at supermarkets less frequently.

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Instead, they are buying in smaller quantities at neighborhood minimarts and convenience stores, many of which are open around the clock. The need for convenience is also fueling the so-called on-demand economy. Consumers in Southeast Asian cities increasingly are looking for channels that deliver groceries, essential services, and other daily necessities directly to their doors.

See Exhibit 3. Each of these trends augurs well for the future of e-commerce in Southeast Asia. The rapid adoption of digital technologies and social media will accelerate access to the entire ASEAN market—for companies large and small, whether they are based within the region or outside it.

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When people think of the penetration of digital technology into average households in an emerging market, China usually comes to mind first. Yet similar digital behavior and trends are apparent in most of Southeast Asia. The average Thai, Malaysian, and Indonesian spends nine hours per day online via PCs or tablets and four hours per day on his or her mobile phone—far more than in China.

Southeast Asians living in rural areas or in tier-two or tier-three cities are as digitally savvy as those in big cities. See Exhibit 4. In rural Thailand, for example, internet users engage in an average of eight digital activities—nearly the same as in greater Bangkok.

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But e-commerce remains underdeveloped in most of Southeast Asia. In Singapore, for example, only 5. Online marketplaces are important channels for certain products, however—particularly clothing, beauty products, and smartphones.

Regional Economic Integration of Laos into ASEAN, Trade and Entrepreneurship Development (RELATED)

See Exhibit 5. Amazon, eBay, and omnichannel companies such as Tesco engineered the first digital revolution centered in the US and the UK. Chinese marketplaces such as Taobao and Tmall powered a more rapid digital revolution in China. Southeast Asia has a distinct e-commerce model that mainly revolves around social media, in part because marketplaces were late to develop in the region.

Apps such as Instagram, Line, and Facebook Messenger are used for much more than alerting subscribers to flash sales and special promotions. Southeast Asian consumers frequently make purchases through these social media channels. They also like to engage directly through their apps with sellers—often small retailers or individuals offering secondhand items. Such small businesses tend to be more willing to allow cash on delivery and to not require payment by credit card credit cards are used less frequently in Southeast Asia than in other regions.

Part of the reason for these preferences may be cultural.

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  • Peer-to-peer e-commerce allows consumers to simulate that experience. Buyers can ask small retailers questions about different products, view photos, haggle over prices, and arrange convenient deliveries. Much of Southeast Asia appears poised to leap directly from cash to digital payments—skipping credit and debit cards. In the US, by contrast, there are credit cards for every people. In Thailand, there are 29 per , and in Vietnam only 5.

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    Use of ATMs and bank branches is also much lower than in developed economies across most of the region. But digital payment is growing fast. The next step is to use this trend to drive digital sales. One option might be to partner with Chinese players such as Alipay or regional challengers like GrabPay. Much work remains to be done in harmonizing tariff rates and regulations before goods can flow freely across borders within ASEAN. The project developed 16 training packages on trade-related subjects and introduced ToT courses for the officials of the Ministry of Commerce, Cambodia.

    The project focused on SME cluster development and Free Trade agreements FTA utilization by SMEs for integration into regional and global value chains through a series of capacity development activities including action research, trainings, policy research and dialogues, regional investor forum and structured learning visits. The project focused on SME development and trade facilitation through training and database development. The project analyzed the development trend of the international shipping and the connection and competition between international shipping and other modes of transport in P.

    The study also proposed opportunities for international shipping along Mekong-Lancang and other trade capacity building activities. The project focused on enhancing capacities of the chamber of commerce and provincial departments of trade and commerce to facilitate trade and investment in the EWEC in Lao PDR, Myanmar, Thailand and Vietnam.

    The project activities included a series of capacity building activities including research, trainings, workshops, policy dialogues, trade events and structured learning visits. Email: dutta mekonginstitute. Our Aim The aim of the Trade and Investment Facilitation Division is not simply to expand trade but also to focus on the broader goal of sustainable and inclusive economic growth for regional cooperation and integration.

    Business networking through development business data base of members of Chamber of commerce and business associations in GMS countries. Product market intelligence for SMEs entry into export market. Improve trade negotiation skills and trade policy development Logistic sector development by promoting certified Logistic professionals. Modalities Design and coaching on need based capacity building programmes for specific target groups in the Government and private sector particularly the Chamber of Commerce and Business associations.

    Conduct action research and policy research on trade, SME and logistic development.

    ASEAN inks first e-commerce agreement

    Inform policy makers on current trends, issues on trade and investment through policy dialogues and forums. Conduct structured learning visits for Business to Business development. Promote regional integration through networking and other regional and sub regional cooperation initiatives in trade and investment. Follow an impact creating project approach though modular based training and Training the trainers. Joint Development of Cross-Border Special Economic Zones SEZs Supported by: Lancang-Mekong Cooperation Special Fund; Duration: The project aims to promote SEZs in the Lancang Mekong countries and coordination among them, boost trade and investment both from within and outside the Mekong sub-region, improve supply chain, upgrade production base, facilitate and enhance trade, as well as reduce poverty, and better the livelihood of the people.

    However, these ambitious goals will demand detailed research, visionary policy-making, and substantial buy-in from regional stakeholders. The World Economic Forum, as a neutral, impartial institution, and the International Organization for Public-Private Cooperation, is leading important initiatives at a global level to craft policies, protocols and frameworks for developing and governing a digital economy.

    Our aspiration is to contribute to building a digital ecosystem that is sustainable, inclusive, and trustworthy. We bring together key stakeholders to debate critical issues, catalyze ideas, and incubate projects and initiatives that can support a healthy and thriving digital world. The initiative aims to work on the issues that will underpin a regional digital economy in ASEAN so that the benefits of the Fourth Industrial Revolution can be fully unlocked and become a force for regional economic inclusion. Four task forces have been established, one for each of the four focus areas.

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