While the Asia region has traditionally lagged behind in the global race to get onboard to the e-commerce wagon, it seems it is catching up at last. By 2025 the internet economy in the Southeast Asia region alone is likely to be worth $240 billion according to Temasek’s latest e-Conomy Southeast Asia 2018 report, which monitors investment opportunities for governments in the region. While five years ago few retailers were accepting digital payment as a form of currency, these systems are rapidly becoming the norm across vast swathes of Asia. In China, where consumers are in fact leapfrogging former payment technologies such as credit cards to adopt mobile payments, FinTechs already manage more than 60 percent of all online payments; while in India digital payment service Alphabet has now launched alongside PayPal; and in Singapore Paynow attracted more than 500,000 users within its first month of launching. There are three key companies have been credited for leading the way regionally in e-commerce – Lazada, Shopee, and Tokopedia – which are collectively estimated to have grown more than seven-fold since 2015. On November 11, 2018, Lazada provided services for more than 20 million region consumers, with global makeup brands Maybelline and L’Oréal Paris attracting the most online purchases on average.
Admittedly ecommerce is yet to gain popularity in the Southeast Asian countries of Cambodia, Laos, Myanmar, Brunei and Timor-Leste, all of which continue to suffer high electricity costs as well as other infrastructure challenges. That said, mobile commerce is reportedly growing rapidly in Cambodia as well as Myanmar, where 40 million users will have access to digital payment systems in 2019.
Why the sudden growth in the internet economy in a region that until now has struggled to achieve internet access rates on par with the rest of the developed world? Simple. The region is seeing its biggest ever boom in engaged mobile internet users, thanks in part to rising incomes, improved infrastructure, increased mobile adoption and the recent growth of online media, ride-sharing and popular online travel services. In June 2018, the countries of Indonesia, Philippines, Singapore, Malaysia, Vietnam and Thailand had over 350 million internet users – a whopping 110 million more than they did just three years prior.
But amidst the excitement of this sudden boom and all it symbolises comes trepidation in equal parts. Complacency in the face of such rapid e-commerce growth could mean significant cybersecurity risks for consumers, especially that of hacking. If regional players truly wish to forge the way in helping the region develop an ‘online’ economy, digital payment providers must pay attention to how best to balance the convenience of technology with the demands of customer privacy protection, as well as that of the right of consumers to protect and control their own data. Online privacy is a serious matter across all social, economic and cultural contexts. It is – for want of a better description – among the many ‘millennial problems’ we are increasingly faced with in a society that now depends largely on internet and mobile devices to function effectively. In a recent survey, over 80 per cent of responders based in Australia, Japan, India and the Republic of Korea cited online privacy as a personal concern, with cybersecurity and privacy recently having replaced cloud computing as among the top five policy concerns the Asia Pacific region.
But privacy laws in most Asian countries are still deemed ‘weak’ in comparison to the global scale and mostly incapable of mitigating the threat of government surveillance programs including China’s, which demands that government has the right to know what its citizens are up to at all times. No one is safe from government interference – anyone can be stopped on the street and checked for identification, it is considered a crime to board a train without a passport and closed circuit cameras can be found on most streets of China’s major cities. Advocacy groups continue to call on citizens to reject governmental surveillance programs such as those proposed in India and Singapore which would provide governments with citizens’ fingerprints and iris scans, suggesting that concern for personal privacy is mounting and with the rise of e-commerce platforms that rely on personal data there is no doubt these concerns will only continue to grow.
It’s also getting harder and harder to evade online spies, according to Stephanie Hankey, co-founder of Tactical Technology Collective – an international nongovernmental organization that teaches journalists and activists how to protect online privacy. But, she adds, it is still possible to protect oneself. Using social media tolls, mobile phones, digital security approaches and information design, developing and transition countries in particular are being targeted by hackers for their vulnerability but with forethought by users and consumers these risks can be avoided.
Ideally, governments and the private sector need to collaborate more on these issues to ensure safe, inclusive growth in the e-commerce area, shop owners should also invest in the services of a web development agency to assure that the platform is secure. Governments are now in a position where they are able to potentially prevent future crises by taking positive steps toward promoting transparency and openness in the internet economy space, particularly in regards to the use of personal data. The Indonesian and Philippines governments, for example, are two of eight founding members of the Open Government Partnership which focuses on exactly this – through empowering citizens to protect themselves, fighting corruption, and leveraging newer, safer technologies that in turn strengthen governance. That being said, the right to online privacy is at the same time often compromised by governmental demands for national security and surveillance measures, but this doesn’t mean positive steps can’t instead be taken by citizens and the private sector to ensure digital payment providers are doing all they can to protect consumers’ personal data.
Asia is at last catching up to the rest of the world – technologically speaking – in many ways, but will it fall behind in this one very significant area? Let’s hope not, for its own sake.