At the end of 2019, there was growing optimism from many economists that 2020 would be a better year for the economy, a year of "stabilisation", after the trade war between President Donald Trump and Emperor Xi Jinping seemed to mellow down (thanks to Trump's 'Art of the Deal' or Xi's Go strategy?). Here we are in 2020, the reality could not be harsher - Q1 has yet to end and we have witnessed a number of major events that spark turmoil:
- One of the worst bushfire disasters in Australia - at least AUD$4.5 billion expected damage from tourism sector alone
- Saudi-Russian oil war that has sent the price of oil down to close to USD$20
- The UK officially left EU - uncertainty on the trade deals and economic impact post-Brexit
- The first pandemic caused by a coronavirus, COVID-19
As if these are not bad enough, a number of countries in ASEAN such as Indonesia and Malaysia are also grappling with their problems locally. Jakarta has been facing numerous huge floods, the worst for more than a decade, that halted the economy and claimed more than 60 lives. The number of dengue cases in Indonesia has also risen steadily since January, killing 104 and infecting 17,000 people nationwide as of mid-March. The situation in Malaysia does not pale in comparison. Malaysia is facing a political crisis at the moment after Dr. Mahathir, the world's oldest Prime Minister, was ousted by his ally and political opponents. Pundits expect this political mess to exacerbate the economic malaise further in Malaysia.
To curb the COVID-19 outbreak, countries in ASEAN have implemented measures such as shutting down their borders, public places and enacting social distancing and quarantine procedures. Although measures have been put in place, COVID-19 will definitely leave an economic impact on the ASEAN economies, though many are still unsure how bad it will be. The financial markets in the region have slumped with a sharp drop by around 30% on average to date. Trading has been halted multiple times on the IDX and SET while the Phillippines has suspended the stock market for 2 days this week. The ASEAN currencies are also depreciating against USD with Indonesian Rupiah performing the worst, ~20% depreciation against USD and both Thai Baht and Malaysian Ringgit depreciated by ~10%. Many believe that the worst is yet to come. Take China as an example. A recent report published by South China Morning Post that compiled data for economic indicators in January and February showed that the economic impact is far more than analysts expected:
- Industrial production fell by 13.5% instead of the forecasted 3%
- Retail sales down by 20.5% instead of the forecasted 4%
- Fixed asset investment collapsed by 24.5% instead of the forecasted 2%
A mix of both monetary and fiscal policies, as well as coordination amongst the regional governments, is crucial to dampen the economic impact. Singapore was the first one to introduce a stimulus, $4 billion Stabilisation and Support Package in February and a second stimulus package of up to $14-16 billion is expected to be rolled out as well. Following Singapore, Indonesia unveiled an emergency fiscal stimulus plan worth more than $3 billion last week - Finance Minister Sri Mulyani has also promised that more measures are on the way.
Enterprise Digital Transformation in ASEAN
This situation has started to cause a paradigm shift in our daily lives, from how we conduct business to how we interact with family and friends. Many enterprises have turned to digital tools to assist with these changes and realised how digital transformation could assist them greatly even during downturns. Imagine if you have complete visibility on your company including workforce, assets, finance, and operations just from an integrated dashboard - this will empower you to make better and measured decisions especially for crafting a business continuity plan in this time of crisis and uncertainty.
While physical travel has been restricted, we continue to actively engage our local stakeholders in ASEAN and here are some of the updates on their digital transformation initiatives:
- Big tech firms are putting their chips in Indonesia - Google, AWS, Alibaba and Microsoft are committed to building data centers in Indonesia. President Jokowi has promised to expedite the regulatory framework to facilitate these investments
- Microsoft has signed a number of MOUs with local enterprises including Sinar Mas Land (smart city project), Telkomsel (5G and enterprise solutions) and Bank Mandiri (digital banking project)
- Airports of Thailand together with the Ministry of Digital Economy and Society (MDES) has come up with a plan to monitor and control the COVID-19 outbreak in Thailand. Efforts include the utilisation of apps such as Vwatch and AoT App to gather data of people arriving and track their locations if necessary
- NCOVI application & Vietnam Health Declaration application are rolled out by VNPT-IT in collaboration with the Ministry of Health and the Ministry of Information and Communication. Similar to the ones in Thailand, these apps are used to monitor and control the COVID-19 spread in Vietnam
- Celcom launched 5G Intelligent City and Public Safety initiatives in conjunction with the launching of Petaling Jaya Smart Center - a project by the Petaling Jaya City Council amidst smart city ambitions
- Large conglomerates in Philippines are beginning to put a focus on innovation with several corporate VCs being set up - prominent examples include Gokongwei's US$50M JG Digital Equity Ventures and Ayala's US150M venture capital managed by Kickstart Ventures
- Globe Telecom has enabled UnionBank to become the first 5G enabled bank in the Philippines, cementing their focus on building positive customer experience through their fully digital branches.
Navigating New Business Environment
It is apparent that initiatives by local enterprises in ASEAN, though slowing down, have not been completely halted. Our team here in Asia IoT Business Platform is relooking how we can still assist our partners and here are some ways we can help you with your business development in this new environment:
Bespoke New Business Development Activities
- Consulting on GTM strategy for specific industries/countries within ASEAN
- Conduct virtual pre-arranged one-on-one meetings to explore business opportunities throughout ASEAN
- Custom reports and lead generation
- Dedicated emailer introducing the firm's role in IoT developments and/or digitalisation projects in the region to explore opportunities
- Dissemination of white papers or webinars on successful digital transformation case studies
- Build a custom digital campaign to generate interest from your target audience
Drop me a note at email@example.com if you are interested in the latest ASEAN enterprise digitalisation updates or if you are interested to collaborate with us for your new business development activities.