Businesses in the diverse region of Southeast Asia need to prepare for upcoming technology shifts to reap new opportunities, according to a report by performance management company Nielsen.
A panel of 50 Nielsen experts identified 14 technological shifts that are likely to be in play over the next five years, four of which — the sharing economy, the spread of existing technology and infrastructure, big data and artificial intelligence, and cashless payment technology — will have the biggest impact in Southeast Asia.
The findings were concluded in a report titled “What’s Next in Tech” published in March this year.
“By recognizing and understanding these shifts, retailers and consumer-facing brands can anticipate future need-states and shape their strategy to tap into the opportunities that unfold in the years ahead,” Regan Leggett, Nielsen’s growth and emerging markets executive director, said in a statement on Friday (08/09).
Nielsen identifies Southeast Asia as a “diverse region” that has both emerging and mature markets. Markets dominated by rural unconnected populations, such as Indonesia, will gradually be transformed on the back of infrastructure development.
The first technology shift that will transform businesses in the region is the sharing economy, in which technology will connect buyers and sellers closer online.
Individual consumers can use online marketplaces to find goods, accommodation rentals, financial loans, crowdsourcing and car sharing. Early-adopter companies that have been first to facilitate the connection “are doing extremely well” while also promoting entrepreneurship and reducing the role of middlemen, according to the report.
Indonesians, at least in big cities like Jakarta, are already familiar with the sharing economy concept since they now regularly use online platforms such as ride-hailing apps Grab, Go-Jek and Uber, or Airbnb to quickly find accommodation online.
According to a separate survey conducted by Nielsen in 2014, 87 percent of Indonesians are willing to use products or services from others in a shared community. That compared to 66 percent of the global population.
The second shift is the spread of existing technology and infrastructure. Internet users in Indonesia make up 132.7 million or nearly 52 percent of the total population, according to a report by the Indonesian Internet Service Provider Association, or APJII, in November last year.
As the government stepped up to provide connectivity in the outermost parts of the country, connectivity will increase and provide an opportunity for more banking and e-commerce services.
The third is big data and artificial intelligence which includes technologies to gather and process “huge amount of data” to enhance system management.
The AI can be used by authorities to provide traffic flows insights as well as by companies to better understand consumer behavior, enhance logistics and financial trading.
“Consumers living the on-the-go lifestyle will appreciate the simplicity and time-saving benefits that programmatic consumption provides,” Leggett said.
The fourth major shift is cashless payment technology. Bank Indonesia, the country’s central bank, has been promoting the so-called cashless society since 2014, encouraging the public to use non-cash payment instrument. For banks and retailers, having more people making cashless transaction simply means more transactions.
“The convergence of secure payment technologies with the often insecure currency systems in many developing countries will likely drive a massive upsurge of cashless payment technology and usage,” Nielsen’s report said.