Sharing Economy Revolution In Southeast Asia
“The Times they are a changing” - Bob Dylan
Truer words have never been spoken. The world that we currently live in; a world, governed by technology is ever evolving and keeping up with the latest trends makes or breaks the entire game.
Technology itself, if we look at, is a mammoth of an industry which twists and turns in an agile fashion to make itself relevant with time. Gone are the days when a particular trend took a decades to finally settle in. it’s now a time of blink and miss. If we look at the industrial revolution over the centuries, the gap between successive evolutions has considerably shortened and nowadays it might be as short as a few years. Every day millions of people are logging onto the internet, millions more are taking up smartphones, mobile tablets and computers. Every aspect of our lives are undergoing a rapid changing – the way we shop, the way we share the resources, the way the industries work to the way we actually view our surroundings. This magical phenomenon is true across the entire globe. And the major hotbed of this entire revolution is taking place right at our doorstep in Southeast Asia; a region with some fastest growing economies win the world, catapulted by its booming middle class, unhindered digitisation and huge number of unbanked population.
A joint research by Temasek holding and Google estimated the total internet economy at the end year to be worth at $50 Billion, with the value quadrupling by 2025. With this understanding as a base point let us have a look at the major technology trends that is going to govern the region in the coming years.
As internet makes its way into the day to day life of the common man, the entire region of South East Asia gets more and more connected. With a population of around 650 million, the region is slowly becoming the hotbed of various internet based services and one of the primary services that is making the round in this current scenario is the “sharing economy” – a loose amalgamation of the peer- to- peer services which helps in reducing costs for essential services like transportation and accommodation.
A study by Nielsen in 2014 found Indonesia and Philippines to be one of the top five countries where the population is willing to participate in this particular gig economy. In the same year, Forbes identified Singapore as a notable member of the SEA for its potential to be a hub shared economy services. The global market for the sharing economy is touted to reach $335 Billion by 2025 and needless to say, a lion’s share of that amount is going to be generated from eth SEA market.
Let’s take a look at the Ride sharing economy which has kicked off a storm in SEA and has revolutionised the way public transportation has been looked at for decades. According to a CNBC report of 50 Top disruptors of 2017, Grab ranks number four, with an accumulated valuation of above $10 Billion. In its latest round, it has garnered more than $2 Billion in investments from Didi and soft bank. The ride hailing app is now spread across 154 cities in 8 Asian countries. With the recent exit of US based Uber technologies from Asia, under the leadership of their new CEO, the incumbent Grab has further consolidated its hold on the market. Needless to say, this gap has lured innumerable players across the SEA market to buckle up and find niches to serves their own area of interest. The competition is getting stiff and the players while fighting it out with each other market share has doled out options, in the plenty to the benefit if the consumers, who now consider this particular mode of sharing economy as an inevitable part of the modern life. A study by Frost & Sullivan shows that ride hailing services were used at least 6. 1 billion times across Sea in 2016 itself. The company estimated the market to be worth around $20. 4 billion with the growth rate projected at 6. 4% every year.
Such positive market signs has enabled the business to rake in mullah from big multinational companies like Soft bank group, Honda motor and Hyundai motor, which have all staked a bit of their fortune on this particular mode of economy.
The ASEAN region is one of the most promising markets for sharing economy expansion, and a sizable consumer demand for shared services is well established. However, in order to harness the sharing economy’s potential for success and control its inherently disruptive nature, it is imperative that investors, incumbents, and legislators take a proactive and collaborative approach to this relatively new economic sector.
