While China, India and Indonesia rank low in today’s regional ecosystem, they are set for major jumps in the future and are projected to lead APAC in the years to come
Singapore ranks top app-based economy in Asia, but the city and other regional leaders must address market gaps or see themselves leapfrogged by up and coming ecosystems like China, Indonesia and India, according to a new study by CA Technologies, one of the largest independent software companies in the world.
When the report was focussed exclusively on mobile applications and analysed three main pillars — government support, infrastructure and business agility. Singapore, Australia, South Korea, Japan and Hong Kong were pegged as the leading app economies, with the Lion City claiming the top score.
However, with more future-focused analytics — the number of people who use mobile Internet daily, social media activity, the use of apps and country demographics — China and India lead the report with Indonesia, Singapore and Hong Kong rounding out the top-5.
“China, India and Indonesia have the potential to leapfrog to the top three places if they capitalise on the opportunities before them. And, the earlier leaders of Singapore, Hong Kong, South Korea, Australia and Japan run the risk of falling behind in this next evolution of the Internet if they do not take actions to address the gaps in their markets quickly,” the report said.
Let’s break down the key takeaways for each country mentioned in the report. We will go in order of present-day ranking.
On the positive side, the report cited pro-active government policies — like aggressively rolling out a fibre network and the country’s role in shaping the future of 5G — as the reasons to be optimistic for Singapore. The city-state also scores high in social and private metrics like mobile payment readiness, credit card penetration rate and Internet usage.
However, the report expressed concerns of a maturing economy in which the ecosystem lives within a small number of apps. It cited a statistic that in mature smartphone economies, 80 per cent of users use only five apps, and expressed concern about the ability for an up-and-coming app to gain market share.
Finally, the country ranks sixth in cybersecurity, an area in need of improvement.
Australia is a market that, today, is consistent across all sectors but is less active, culturally, on smartphones than much of the region. It ranks well on Internet penetration, average mobile speed and is the top country for business agility.
However, when the report started to analyse future-focused indicators, Australia fell from number two to number eight on the list. It ranks second to last in daily mobile use and is the third smallest market after Singapore and Hong Kong (both of which are much more contained economies than Australia).
Melbourne is often pointed to as a potential startup hub of the future, so it will be interesting to see if it can reverse negative outlook for the future.
The South Korean government comes in first place for use of technology and the fast Internet speed, as well as large mobile presence (about 42 million) make it a regional leader. Also, the report cited the impact of Daum Kakao as evidence that domestic companies can influence the global tech community.
South Korea’s biggest problem is demographics. The youth population on mobile only makes up 13.5 per cent of the total users, which CA Technologies thinks may mean the economy will shrink in the future. South Korea is also less active on social media than the rest of the region.
Also Read: 4 cool O2O startups to watch in Korea
Like Singapore, South Korea ranked low on IP security (eighth).
Japan has the highest Internet penetration rate of the 10 APAC economies CA Technologies investigated. It is also second in average mobile connection speed and IP protection.
Somewhat surprisingly, mobile penetration was eighth in the region (54 per cent) despite having one of the best infrastructures in Asia. That number seems especially low for the reputation Japan holds as a leader global technology development.
The country was middle of the pack in terms of innovation, last in daily use of apps and eighth in social media usage.
However, Japan has a unique consumer quirk that makes it difficult for a report like this to analyse (which CA Technologies readily admits). Culturally, gara-kei phones (basically flip phones reminiscent of the early-aughts) are extremely popular. The phones cannot download apps but rather are pre-loaded with functions popular (or necessary) in Japanese culture.
While the gara-kei trend hurts Japan in this particular report, it does not necessarily point to a weak ecosystem.
On this list, Hong Kong might be the model for consistency.
Factors like a decreasing digital-native population, ranking ninth in smartphone usage and a shrinking youth population will probably prevent the city from every challenging for the top spot.
However, the country came in second for government support of technology and innovation, IP protection was third and it was the top city for ‘daily use’ of mobile Internet.
The city ranked fifth in both the ‘today’ metrics and the ‘tommorow’ analytics.
The report was not overly optimistic about Malaysia’s app economy. The country ranked in the six to nine range in mobile connection speed, mobile payment readiness, innovation rank and government use of technology. Social network usage is low as well as total mobile Internet usage.
“This suggests that Malaysia’s familiarity with the new mediums and modes of communication within the application economy may not be as ready as some other markets in the rest of the region,” the report said.
However, it did tie for first with Australia for cybersecurity strength, and the report cited a fairly young population as reason for optimism. Also, it specifically pointed to a deal between U Mobile and ZTE to develop 5G capabilities as an example of future-focussed infrastructure development.
Unsurprisingly, Asia’s largest economy also shows signs that it may make the biggest jump and eventually become the most important mobile ecosystem in the region.
China has the largest mobile usage rate in the world and today is being dragged down by low IP protection, poor government use of technology (official communication still often requires the use of fax machines), low app usage and weak social media interaction.
However — as a global leader in mobile payments, IoT development, e-commerce and big data analytics — the strengths of China’s mobile economy seem to be well-suited for the coming years. Furthermore, the report admits the social media metrics may not be overly relevant, as China willingly harms itself in that metric by banning or censoring much of the sector.
The final important note to mention is China is a massive country, and there are huge disparities in metrics like ‘app usage’ between the urban centers and the rural population.
In one word, the report defined Thailand as a ‘paradox’.
While the military junta hurts the country’s ranking in innovation (specifically the fact some Telcos only received 4G licences in November 2015), the report did admit the government has put into action strategies to improve the situation.
Furthermore, the country ranks low in mobile penetration rate (seventh), mobile speeds (ninth), mobile payment readiness (eighth) and debit/credit card penetration (sixth). But, as per the definition of paradox, those who have phones use it often (fourth in daily usage) and enjoy social media (also fourth).
CA Technologies did not give it the growth potential of India or China, but ‘future’ metrics did have Thailand jumping two spots to number six.
While China was pegged as having the potential to be the region’s top mobile economy, CA Technologies pointed to India (along with Indonesia) as a country with the ability to make a large leap.
Ranked ninth in the present-day metrics, India consistently ranked low across all metrics except for cybersecurity (third). The report cited inconsistent coverage, the fact that large parts of the country do not have Internet and a complicated mobile tariff schemes as reasons why today the app economy ranks low.
But, analysts project the country will have 256 million smartphone users in 2016 and the country is working with the BRICs (Brazil, Russia, India, China) countries to develop its 5G network. This, along with the fact that 18.1 per cent of the market are between 15 and 24 years old, and it has a strong talent pool, made India one of the most optimistic markets for the years to come.
While poor scores across all metrics means Indonesia placed last in the mobile app economy today, much like India it is predicted to make a huge leap forward and is ranked third in the forward looking metrics.
Today, it ranks in the eight to ten range in mobile penetration, smartphone penetration, mobile payment readiness, business agility and cybersecurity. The report specifically calls out the inability to create a 4G deployment plan and a “exasperated request from the Indonesian government urging its telcos to submit business plans for 4G
But despite the frustrations of today, the report was actually optimistic for the country. It called Indonesia a country which strongly supports its entrepreneurs and highlighted the startup ecosystem as a leader in Asia. It has a sizeable population of mobile-savvy people and it is a young country.
Finally, CA Technologies felt confident that Indonesia would embrace the mobile app economy and help it develop moving forward.
Along with India, Indonesia was listed as the country with the highest potential for improvement.
The report is no longer a snapshot of a niche part of the regional economy. Mobile phones are a dominant part of everyday life in Asia, and being a successful mobile company is condusive to being prosperous company in general. As the report says,
“In our increasingly connected world where devices talk to each other, storefronts fit in pockets and services are accessible over the internet — applications are everywhere. This means every business is really in the software business and needs to embrace digital transformation.”
The post Singapore tops mobile app economy, but for how long? appeared first on e27.
from e27 http://ift.tt/1WNmqzV