ASEAN Enterprises On Track For Digital Transformation — EY
11 Aug 2021
About 39 per cent of ASEAN enterprises have made substantial progress towards digital transformation, according to accounting firm EY.
EY, formerly known as Ernst & Young Global Ltd, reckons 65 per cent of ASEAN enterprises will start their digitalisation journey in the next three years.
EY ASEAN regional managing partner Liew Nam Soon said COVID-19 has significantly accelerated digital transformation across businesses in the region.
He said a new EY study, entitled “Building successful digital ecosystems in Southeast Asia,” has found that companies will continue to transform their business digitally to drive profitable growth.
“A partnership model can provide significant momentum for their digital transformation journeys,” he said during a virtual media briefing on Wednesday.
Liew said the growing digital ecosystem in Southeast Asia offers the potential to generate revenue opportunities of US$23 billion by 2025 from about US$6 billion in 2020.
Between 2016 and 2020, Southeast Asia witnessed technology transactions worth a total of US$408.5 billion. Mobile applications, cloud computing, artificial intelligence, big data and analytics, blockchain and Internet of Things (IoT) were the technology areas that saw the most investments.
Industry players will seek a win-win proposition through mergers and acquisitions (M&A), joint ventures and investments, Liew reckons.
EY-Parthenon partner and ASEAN specialist Joongshik Wang said surveys done among executive level managers involved in M&A or digital strategy have found that 90 per cent of respondents prioritise digital investment in their capital allocation, while 74 per cent of corporates buy or make investment approaches for digital growth.
“Meanwhile, most traditional firms have been focusing on their core business and may be hesitant to build a platform-based business due to legacy systems and corporate culture.
“Thus, traditional firms are turning to collaborating with e-commerce and last-mile platforms to offer digitalised, streamlined and omnichannel experiences to their customers,” he added.
Asked about Malaysia’s position among region peers, he noted that the country has fewer unicorns compared to other countries.
“I’m surprised to see that because more than 80 or 90 per cent of unicorns are very concentrated in Singapore and Indonesia and we seeing emerging unicorns getting more active in Vietnam.
“Malaysia has overall market maturity and high readiness for the digital economy, but interestingly we don’t see many unicorns,” he said.