There is a huge, untapped market opportunity in Asia, driven by under-served populations. Today, there are over one billion people in Asia who live in poverty. Yet, they are already spending over US$2 trillion annually on basic goods and services such as food, housing, clothing and telecommunications. And poverty levels across Asian countries have been declining in the recent years, with income levels of the poor in Asia expected to increase significantly over the next decade.
According to Brookings, by 2030, there will likely be more than 600 million people who would have transitioned out of poverty. In the next 10 years, they will not only be buying more goods and services, but also demanding higher quality.
At the same time, the region is experiencing rapid growth in digitalisation. According to Statista, Internet penetration in Asia has doubled in the last 10 years (from 25 per cent to 48 per cent) and is expected to continue to grow, reaching 62 per cent by 2025. This equates to another 900 million people in Asia who will be online, primarily via their mobile phones. Investment by companies and organisations on digital services in the region has also been growing significantly, and this has not only improved efficiency in existing businesses but also led to new tech-enabled business models.
The result of these two forces is new digital access at an unprecedented scale, reach and affordability. Digitisation is transforming many industries, including transportation, food, healthcare, education, finance and supply chains in general.
Small and medium enterprises are often best positioned to capture this opportunity by developing these new digital business models. One example is the Indonesian education technology company Ruangguru (Teachers’ Room), an investee of the Asia Impact Investment Fund, managed by UOB Venture Management, with Credit Suisse as the Impact Advisor. Starting out as a private tutoring marketplace, the company now also offers app-based lessons that mirror the Indonesian state curriculum, providing compelling, “gamified” content that supports and enhances the learning experience. It now has millions of subscribers and is a prime example of the disruptive digital innovation we are seeing across developing Asia.
Read the rest of James Gifford and Joyce Chee’s article here at The Business Times