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Article25 May 2023

Asia as a Time Machine to the Future

Seven Areas Where Asia Gives Interesting Insights Into the Future
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. 
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