We
estimate Asia adopts new technologies 8-12 years ahead of the West,
making it much like a time machine to the future. While its
infrastructure has historically been underdeveloped relative to the
West’s, Asia’s high internet connectivity, young and increasingly
affluent and urban demographics, and entrepreneurial spirit have driven
the region to adopt many technologies at a faster pace. In doing so,
Asia provides a glimpse of what the future could look like in more
developed, Western economies.
The
key drivers behind Asia's faster adoption of technology include
underdeveloped infrastructure, especially in retail, banking, and
healthcare, as well as high internet penetration, young digital natives,
urbanization, a rising middle class, and an entrepreneurial spirit.
Key areas where Asia currently holds an advantage over the West include:
- Super apps — mobile apps that
integrate multiple functions under a single umbrella — are unique to
Asia, yet they are ubiquitous across the region. Driven by younger
demographics and high digital adoption, Asian users are immersed in
super apps and enjoy the convenience, ease of use, and multitude of
services they provide.
- Asia leads the rest of the world in
adopting mobile payments both online and offline. According to FIS, in
2021, digital/mobile wallets accounted for nearly 70% of the e-commerce
transaction value in Asia, more than double that of North America or
Europe. Likewise, for purchases at physical points-of-sale, nearly half,
or 44%, of transactions in Asia were done via digital/mobile wallets, a
share 4-5x larger than in the West.
- Social commerce is a subset of
e-commerce that offers consumers an integrated platform with social
features, providing more immersive and interactive shopping experience.
Asia was the first region to introduce several social commerce formats,
such as livestreaming e-commerce. According to Insider Intelligence, the
U.S. is expected to reach China's 2018 level of social commerce
penetration in 2026, indicating that China is roughly eight years ahead
in social commerce.
- Short-form videos have revolutionized
the way people consume and creators develop video content. The
commercialization of short-term videos took off in China, most notably
through TikTok. Taking note of this video format's success, Western tech
giants have been racing to create their own products with similar
features, as the competition for users and advertising budgets
intensifies.
- While South Korea is widely regarded
as the "home of eSports," the eSports boom quickly spread to other Asian
countries, making the region central to the world of competitive
gaming. Over the past decade, countries in the West have followed in
Asia's footsteps by professionalizing eSports, organizing eSports
tournaments, devleloping successful eSports teams, attracting
sponsorships, and supporting a growing livestreaming market. Meanwhile,
Asia continues to explore new frontiers in eSports: refining the eSports
value chain, popularizing and scaling the mobile eSports ecosystem, and
creating eSports hubs.
- Webtoons — digital comics optimized
for viewing on mobile devices — originated in Asia, where the industry
continues to dominate, and are now making inroads into Western markets.
South Korean companies have launched local-language versions of existing
webtoons, venturing outside of Asian markets. They have also acquired
local Western players, exporting their respective original webtoon
content via acquired platforms. Like anime, manga, and K-pop, webtoons
are softly permeating into Western media and entertainment.
- In Asia, digital healthcare is
significant in terms of both scale and penetration. Digital healthcare
is reported to have touched the lives of around 1.5 billion people in
Asia (in terms of registered users across emerging healthcare
platforms), and its user base is continuing to grow. Furthermore,
studies suggest the adoption rate of digital healthcare in developing
Asia is 2.5 times the rate in the U.S. Moreover, unlike the West, where
various scaled players specialize in each vertical of healthcare
services, the digital healthcare industry in Asia has evolved from a
standalone play to a comprehensive ecosystem of services.