APAC technology trends 2020

4 tech themes we will see in 2020

The 4 important key technology trends to watch out for in 2020 for consumer /enterprise space-

  1. 5G investments will start taking shape in a big way. There are questions regarding the business models for 5G technology but the basic decision around spectrum investments will start shaping.
  1. O2O convergence will intensify (Online to Offline and vice versa ) in the Digital startups -Ecommerce battle will intensify as growth continues in the market ( 35% YoY growth wrt GMV). Ecommerce players will increasingly look at a convergent business model.
  1. Consolidation in the platform economy – We will see convergence in many SE Asian markets wrt E-money/ Wallet players. Digital Banks – Some of the countries will launch/ start thinking of  Digital bank licenses.
  1. The Enterprises spending will increase, henceforth, security will start taking a lot more attention both for the Enterprise as well as the Consumer ( especially for the IoT devices )

Deep diving a bit on how these technology trends will impact APAC.

Trend 1: 5G investment

5G discussions will pick up in APAC and we will see countries (beyond China, Japan, Korea and Singapore ) finalise the spectrum and business regulations around 5G. The 5G Business case is a big question mark. Many MNOs are struggling to break even from their previous generation expenditures. Spectrum and network sharing may feature in 5G and are most suited for MNOs in developing countries, where the demand for 5G services is limited. In fact, the MNOs in these countries may need to share the spectrum and network to launch 5G sevice. The regulators may mandate this to introduce 5G in their markets earlier. As a result, some MNOs may take a step further and even divest their network altogether to focus on services. Regulation, licensing, and spectrum policy will be critical to tapping the 5G opportunity in APAC.

Trend 2: O2O convergence

Trends in O2O technology convergence

  • Volume growth

Ecommerce will becomes a mainstay in APAC especially the South east Asian region. Expected growth of 35%+ Y-O-Y in Ecommerce GMV with the market reaching more than 50 Bn USD by GMV in 2020.

  • Factionalization into AAT group

Investments from big boys will accelerate. Last few years have seen AAT’s expansion into the SE Asia as a major battlefront and in the meantime, we saw Alibaba increasing its stake in Lazada in 2018. Tencent has already invested in a couple of companies like SEA (which went public 2 years back), Go-Jek, JD Thailand etc. Amazon entered the SE Asia market a bit late with Singapore and Australia. Amazon is expected to be a bit aggressive with acquisitions to gain market share.

In 2020, as the players try to dominate we will see a bit more focus on Profitability.

  • The super apps battle for “super”

As the super apps expand beyond their core cab-hailing /eCommerce, they’re expected to be a lot more aggressive with technology acquisitions. There may be a big play for Omnichannel i.e the digital players acquiring physical companies which gives them reach. e.g Moka being discussed to be acquired by Go-jek

  • The revenge of the “Brick and Mortar”

Traditional brick-mortar retailers like Matahari (Indonesia) and MBK (Thailand) will significantly increase their online presence. At the same time, we expect the Cloud-first Online brands like Pomelo and Lazada move in retail to create Omnichannel experience.

Trend 3: Consolidation in the Platform economy
  • Aggressive Payments strategy

Payment space is expected to get crowded with entrants like GrabPay, Go-Pay (Indonesia) being aggressive for the expansion giving the other players like Alipay, Samsung etc a big competition.  Payment model will evolve – Payments will evolve with new Data analytics and services like SME /P2Plending based on Payment analysis.

  • Lending

Lending is emerging as a big area. Therefore, the payment companies will get into areas like Consumer lending, SME lending, Credit insurance for SMEs etc. There is a lot of untapped potential in SE Asia wrt Underbanked and Unbanked population. We’ll see Super apps and Payment companies trying to leverage their customer base and get into Financial services more aggressively.

Trend 4: Enterprise spending revival
  • Cybersecurity -Increasing spend in Cybersecurity as an escalation of new/sophisticated Cyberattacks

Digital transformation has exposed a broad attack surface that would-be belligerents. The IoT is pushing “connect-first secure-later” products to a range of industries and critical infrastructure in APAC countries. Cyber risk is escalating by increasingly sophisticated malware, record-breaking DDoS attacks and politically motivated state-sponsored threats.

We will see more spending from APAC CIOs to protect the enterprise with spending on Security services expected to increase over 25%. There will be a visible convergence of Traditional and Cybersecurity spending happening.

  •  Cloud – Public Cloud battle intensifies with AliCloud and Azure becoming aggressive. New models ( AWS Outposts )

While the Public Cloud will be an aggressive battle with AWS taking the lead, in 2020 we will see AliCloud and Azure trying to dominate. As decision making evolves and Hybrid Cloud strategy becomes important for most enterprises, we will see the emergence of System Integrators as the key decision influencer in APAC. Also, we will see new use cases for Edge Computing i.e the Computing is more and more on the edge of the networks. Furthermore, models like AWS offering Outposts will be the way to go as Cloud players tap the private Cloud market as players

  • Data security & Privacy

GDPR in Europe and we have APAC variants like Indonesia Regulation 82/OJK, Thailand, Malaysia etc all have some variants. Data security and privacy will be a big focus for regional regulators and we will see similar initiatives from other countries.

  • Network as a Service

The emergence of SD-WAN technology has helped speed-up enterprise edge virtualization. APAC Enterprises are embracing SD-WAN to achieve an agile, cost-effective hybrid WAN. The SD-WAN market entered the growth stage of the APAC market adoption curve in 2019. Managed SD-WAN—wherein the service provider (network service provider, managed service provider or value-added reseller) acts as a single point of contact for procuring, installing, configuring and managing the complete SD-WAN solution (the SD-WAN appliance, software license, WAN services)—is gaining traction. This provides new opportunities for Service providers from new Overlay ( SD-WAN solution ) as well as a threat when enterprises look for a relook at their overall Data Communication needs and the traditional MPLS/Internet links.

  • Data Analytics will come to the forefront

Data analytics will also come into the forefront as SMEs take the lead in spending for BD solutions, for instance, in verticals like Retail and Manufacturing.

You can watch the full interview at

https://www.bloomberg.com/news/videos/2019-12-23/asia-tech-outlook-for-2020-video

Sources /References
  • GSMA Telco 2020 – https://www.gsmaintelligence.com/research/2019/09/telco-2020-seeking-growth-beyond-the-core/811/
  • https://www.straitstimes.com/business/companies-markets/gojek-near-to-buying-mobile-payment-start-up-moka-for-163m
  • https://insideretail.asia/2017/09/06/matahari-department-store-puts-more-money-into-e-commerce/
  • https://cybersecurityventures.com/cybersecurity-market-report/
  • https://techcrunch.com/2019/12/04/aws-outposts-begins-to-take-shape-to-bring-the-cloud-into-the-data-center/
  • https://ajaysunder.com/challenges-and-opportunities-for-tencents/
  • https://ajaysunder.com/chinese-tech-stocks-and-their-impact/
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