enabled by the Internet and the online global marketplace. As such, such businesses are subjected to the changes in each market, having to consider factors like currency rates, political stability, local laws and varying expenditures based on each region. In their advertising, they would also have to consider the different worldviews of each country-group of consumers. However, it is encouraging for these internet businesses that the trend of Internet usage and online shopping has been on the rise globally. (Value Line, 2020) Additionally, it is commonplace to see such companies partnering up with strategic allies or acquiring smaller companies to extend their portfolio of offerings and gain a greater share of the market. Besides reducing competition, such partnerships also allow businesses involved to sharpen their technological capabilities by leveraging on each other existing resources instead of pumping in huge investments to develop new ones. (Value Line, 2020) 2.1.2 Global Trends E-commerce Market Growth According to Statista, it was reported that the e-commerce market is expected to show an annual growth rate (CAGR) of 9.1 percent from 2020 to 2024. It was also estimated that user penetration rate for e- commerce platforms is at 70.4 percent in 2020 and is expected to reach 73.7 percent by 2024. As such, this
Singapore University of Social Sciences (SUSS) | BUS489 GBA05 – Jan Semester 2019 10 shows that there is potential for further growth and expansion in the e-commerce market going forward. (Statista, 2020) The growth in the e-commerce market is attributable to the increasing trend of the number of people getting access to the internet in emerging markets over the years. Along with the trend of rising internet penetration, it is driving the demand of the e-commerce market. This trend is the most prominent within Southeast Asia’s fast-growing digital economy as more than half of the people living in Southeast Asia are millennials. Millennials prefer the use of the internet, basically anything that is convenient to them. Furthermore, with the global expansion of China’s smartphone manufacturers, such as Huawei, and improvements in technology to stream games or having a fastest network speed, it contributed to the rise in online users. According to a research done by Google and Temasek, it found out that the region will see over 3.8 million new online users each month (Enterprise Singapore", 2020). Underbanked Population in Southeast Asia According to The World Bank, it estimated that up to 80 percent of people are underbanked (Lago, 2020). This is mainly from people in countries such as Indonesia, the Philippines, and Vietnam, whereas about 30 percent of the people in Malaysia and Thailand are unbanked. Coupled with the increasing trend in the use of e-wallet and bank transfers to perform financial transactions, this brings about an opportunity for digital financial services providers to tap on the concept of providing “global wallet for everyone” (Hoppe, Baijal, Akhtar & Olsen, 2020). Given the success of companies like Grab using GrabPay and Alibaba having Alipay, companies can find growth in these areas.
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