SINGAPORE – Bringing South-east Asia’s small businesses into the digital economy could raise the region’s gross domestic product (GDP) by between US$780 million (S$1.07 billion) and US$1.13 trillion, an industry study has found.
This is up from about US$200 billion today, or 7 per cent of Asean GDP, the authors noted in a media briefing on Monday (Sept 3).
But non-tariff barriers such as logistics and cross-border digital regulations such as data localisation continue to be challenges, especially for small and medium-sized enterprises (SMEs), said the report from consultancy Bain & Co.
The trillion-dollar GDP boost could come by 2025, on the back of trade and growth within the region, with productivity improvements in sectors such as manufacturing, as well as expansion of digital markets and the growth of “enabling sectors” such as information communications technology, said the Bain researchers.
Findings from the poll of more than 2,300 small businesses in Asean showed, for instance, that SMEs in the retail sector saw sales go up by 15 per cent on average after turning to e-commerce.
Still, about one-quarter of SMEs fingered limited cross border payment options as the key barrier to selling online internationally, while half of those that do sell online cited complex cross-border trade processes or poor logistics as the main problem.
The Bain report was done in association with technology companies Google and Sea, as well as Rebecca Fatima Sta Maria, former secretary-general of Malaysia’s International Trade and Industry Ministry.
Forrest Li, chairman and group chief executive of Sea, said in a statement: “We see huge momentum in e-commerce as more SMEs tap into new, fast-growing markets online, but it is vital that more SMEs are given access to this opportunity.”
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