- Southeast Asia’s internet economy is set to grow but experts say that providers must focus on building trust by showing that mobile technology can help the marginalized.
- Companies must show that the purpose of the data they are accumulating is not to “snatch information” but to enable people to succeed,” Varun Mittal, global emerging markets Fintech leader at consultancy EY said at the Credit Suisse Asian Investment Conference in Hong Kong,
The race is on for a "super app" for Southeast Asia as mobile-based e-commerce makes inroads in the region, experts say.
"It's a race to be a super app in ASEAN," Varun Mittal, global emerging markets Fintech leader at consultancy EY, said during a panel discussion at the Credit Suisse Asian Investment Conference in Hong Kong on Tuesday. He was referring to the Association of Southeast Asian Nations, a regional political and economic grouping.
A super app allows users to access multiple services from a single mobile app, such as enabling them to make financial transactions, and order food or hail a ride.
"Everyone is looking to payments as the first step to go into the rest of financial services," Mittal said, adding that "making money in payments alone is not a viable business."
But to be successful, providers must focus on building trust and showing that what they offer improved livelihoods through connecting marginalized people to the broader economy, according to the panel discussions.
Southeast Asia's internet economy is expected to be exceed $240 billion by 2025, according to a study released in November by Google and Singapore's Temasek Holdings. The report said that as mobile internet becomes more affordable, it will drive growth in sectors like ride-hailing and e-commerce.
The region's internet economy was predicted to be about $72 billion by the end of last year, up 37 percent from a year earlier, as measured by gross merchandise value —which is a key industry metric measuring total dollar value of merchandise sold online, the study said.
Companies must show that the purpose of the data they are accumulating is not to "snatch information," Mittal stressed. "It's more of we're trying to help enable you, we want to help you become part of this economy, let's work together to help you succeed."
The ride-hailing sector, which includes transport bookings on the internet and online delivery, has skyrocketed in the region, led by companies including Indonesia's Go-Jek and Singapore's Grab.
Last week, the latter's Grab Financial unit said it was rolling out several financial services across the region. They included an online checkout system that would let sellers accept Grab's digital payment service, GrabPay.
But according to management consultancy McKinsey and Company, 99 percent of transactions by volume in Indonesia — Southeast Asia's largest economy — are still done in cash.
Anthony Thomas, president and CEO at Mynt, the Philippines-based e-payment and fintech arm of Globe Telecom, Ant Financial and Ayala, said the super app needs to be able to help people get through daily life more smoothly. As it is, tech can now help people who don't have basic access to things that are taken for granted elsewhere, such as credit access.
"The problem in the Philippines is really an access problem to formal financial services because two out of three Filipinos don't have access to a bank account," he said at the Credit Suisse conference. "And maybe nine out of 10 don't have access to formal credit."
— CNBC's Saheli Roy Choudhury contributed to this report.