The Next Wave Emerging digital life in South and …

1 & quot ;The next Wave& quot ; Emerging digital life in South and Southeast AsiaThis report is produced by Deloitte in partnership with the INCLUSION Fintech Conference. With the inaugural three-day event held in September 2020, INCLUSION aims to bring together members of the technology and financial communities, to foster a global dialogue on building a more inclusive, green, and sustainable world through digital Summary 1 Chapter I The Rise of digital life 5 trends and characteristics of digital life 5 Large populations and young demographics 5 digital life boosted by social media 6 Factors driving the rise of digital payment 7 Demographic advantage 8 Rapid penetration and adoption of smartphones 8In contrast with the lack of inclusiveness of traditional finance.

2 10 digital payment reduces the time and cost of transactions Strong policy support for the digital economy 10 digital payment the key enabler for digital life 11 digital payment has boundless potential 11 Mobile e-commerce has become the cornerstone of digital life 13 Interconnecting digital finance 14 Accelerated adoption of & quot ;zero contact& quot ; digital payment 14 since the pandemic 14 Chapter II digital life Consumer Portraits 18 Characteristics of digital life 18 Regional differences in digital payment 19 The attractions of digital payment 19 Petty payments dominate 20 digital life Habits 21 Mobile APPs actively used in different scenarios 21 Diversified modes of digital entertainment 21 Popularity of online shopping but concerns remain 22 Surge in the use of digital services since the pandemic 24& quot ;The next Wave& quot ; Emerging digital life in South and Southeast Asia | ContentsChapter III Unique digital life in South and Southeast Asia 26 digital life & quot ;Leaders& quot ; 28 Singapore: Exemplary digital model for 28 developed countries 28 Indonesia: perfect payment pattern, boundless 32 online shopping prospects Malaysia: Advanced digital application scenarios 34 digital life & quot ;Followers& quot ; 36 Thailand: Street-based digital economy 36 Philippines: Tech-driven digital age 38 digital life & quot ;Prospects& quot ; 42 India.

3 digital life from a small perspective 42 digital life & quot ;Challengers& quot ; 44 Bangladesh: Inclusive digital finance for low income people 44 Pakistan: Every area of digital life needs to developed 47 Chapter IV Unleashing the Potential of digital life 50 Continuous promotion of digital communication infrastructure 50 Encourage and develop consumer and merchant adoption of 50digital payment Grasp opportunities to serve those with inadequate access to 51financial services Building an information security mechanism & quot ;trinity& quot ; 51 Collaboration and communication to reduce business risks 52 Encourage localized digital innovation 52 Actively cultivate digital talent 53& quot ;The next Wave& quot ; Emerging digital life in South and Southeast Asia | Contents1& quot ;The next Wave& quot ; Emerging digital life in South and Southeast Asia | Executive SummaryExecutive SummaryYoung and vibrant

4 Economies in South and Southeast Asia are rising stars in the development of the digital economy. The region has become the Emerging & quot ; next wave& quot ; presenting enormous opportunities in digital life adoption. There are four factors behind the rapid rise of digital consumption in South and Southeast Asia: First, the population in the region is huge in size and young in age, with digital lives boosted by social media; Second, the large number of unbanked and underbanked population in the region has spurred the growth and fast adoption of digital financial services accessible via smartphones, which further promotes the adoption of digital payment; Third, with a high mobile penetration rate in the region, consumers are more inclined to opt for m-commerce than those in developed economies.

5 And Fourth, most governments in South and Southeast Asian countries have introduced supportive policies to boost development of the digital economy and digital infrastructure. We surveyed people across age groups in eight countries (Singapore, Malaysia, Thailand, Indonesia, the Philippines, India, Bangladesh and Pakistan). The findings show that young adults aged 21-40 are the leading force enabling the rapid adoption of a digital life in the region in the post Covid-19 world, with 78% of those surveyed in the age group indicating they have increased their use of digital payment as a key enabler is creating and connecting digital life for consumers, making a fundamental shift in social interactions, financial services, digital entertainment, daily life services and shopping habits.

6 The survey also uncovered regional trends in the digital lives of people in South and Southeast Asia, which are summarized below. Source: Deloitte ResearchChart 1: Portrait of digital Payment in South and Southeast AsiaTop 3 scenarios of digital paymentAfter the pandemicPetty payment in dominanceFor 67% of consumers, the value of each transaction is less than $3078% of consumers have increased their use of digital services1. convenience2. contactless3. value-added benefits and promotionsTop 3 reasons for use of digital paymentLess than $15%70%69%62%33%29%$1~$10$11~$30e-commer ce / m-commercein-store purchasepeer-to-peer transfer2& quot ;The next Wave& quot ; Emerging digital life in South and Southeast Asia | Executive SummaryThe survey also uses indicators to measure the seven dimensions of digital life in each country.

7 Overall, Singapore and Malaysia are the & quot ;leaders& quot ;, with top performance in every digital life indicator. However, there are several & quot ;follower& quot ; countries that are poised to catch up soon. Thailand is a model in this category. Its high per capita income has led to greater smartphone penetration. Thailand performs strongly by virtue of having vigorous social media and online shopping activity and a mature digital payment segment. The Philippines, while having room to grow its mobile penetration, has a unique leading edge in digital peer-to-peer transfers, live e-sports broadcasts and other segments of digital life . Although they are not yet equal to the & quot ;leaders& quot ; in their richness of digital life scenarios, these & quot ;follower& quot ; countries are set for rapid expansions in their digital economies and are set to catch up rapidly with the leaders through their good digital foundations and effective policy impetus.

8 In South Asia, India is doing well in cybersecurity. However, because of a wide income gap, it still faces challenges such as slow internet speed and consumers' preference for cash payment. This puts it behind other & quot ;follower& quot ; nations in the seven indicators. Bangladesh and Pakistan in South Asia have the farthest to catch up in digital life . Their lower levels of social and economic development have resulted in a large gap with other countries in digital infrastructure and mobile penetration rates. digital payment: The top three most common daily life scenarios where consumers choose to use digital payment include e-commerce / m-commerce, peer-to-peer transfer and in-store purchase, of which the majority are of smaller value.

9 Users choose digital payment mainly because it is convenient, contactless and offers extra benefits and discounts. Most frequently used mobile APPs in South and Southeast Asia Mobile banking and digital payment are the two most used functions in financial services APPs; Films or video streaming, social media and music streaming are the three most popular modes of digital entertainment; Ride-hailing, news and books, and workplace collaboration are the most frequently used daily life services; The top three reasons for consumers to choose e-commerce/m-commerce are convenience, product variety and low prices; Since the pandemic, the use of digital services has serviceHighest frequency of use1. mobile banking2. digital paymentDigital entertainmentMost favored by youths1.

10 Films and video streaming2. social media3. music streamingDaily life serviceHighest frequency of use1. ride-hailing2. news and books3. workplace collaborationE-commerceThree reasons1. convenience2. product variety3. low pricesChart 2: Four Main digital Payment Scenarios in South and Southeast Asia3& quot ;The next Wave& quot ; Emerging digital life in South and Southeast Asia | Executive SummaryDigital payment is the key enabler enabler of digital life . Compared with mature models of digital payment in other countries and regions, South and Southeast Asian countries have demonstrated the following characteristics: (1) For various reasons, consumer habits including a continued preference for cash, digital payment in many of these countries relies more on the e-wallet model, which enables ready exchange for cash; (2) These countries need to rely on offline channels such as convenient store networks to connect consumers due to wide gaps in the availability of traditional finance and weak binding relationships between digital payment, bankcards and bank accounts;(3) Differences in per capita income result in variations in smartphone penetration.