Biggest E-Business Opportunity in the World29 December 2004
The Asia-Pacific region presents both a market opportunity and a competitive threat to the west. China, especially, is a vast and still relatively untapped market with growing demand for a broad array of consumer and business goods. Yet, the Asia-Pacific countries are producing a growing variety of products that sell at prices that are difficult for foreign companies to match.
According to the new eMarketer report, IT and E-Business in the Asia-Pacific Region, the area is viewed as a homogenous market for the sake of discerning trends and marking global comparisons, but since this obfuscates some of the real differences that exist between countries, the report also takes a closer look at individual countries and at their national information and communications infrastructures. Each is coming to e-business from a different direction — and at different speeds.
Of course, the leading countries in the region — Japan, Australia, Hong Kong, Singapore, South Korea and Taiwan — have stable and advanced information and communications technology (ICT) infrastructures. They boast high Internet and broadband penetration rates. But they are still sometimes difficult to gauge. For instance, despite a high degree of network connectivity, Japan's Internet is underutilized as a tool for e-commerce.
China, India and Malaysia are emerging as the fastest growing markets for ICT equipment and services. But they come with risks and opportunities for western companies seeking to expand into new markets, and they can be enigmas. Take India for example. The city of Bangalore is the outsourcing capital of the world, and to support this business, the city has an advanced network infrastructure. At the same time, there are large sections of the country that lack basic phone service.
Currently, Indonesia, the Philippines and Thailand are laggards. These countries have considerable room to grow and have experienced civil strife that makes them less than desirable markets for foreign investment.
Overall, the region represents an impressive opportunity.
Nearly one-quarter of global spending for ICT originates in the Asia-Pacific region, according to the World Information Technology and Services Alliance (WITSA), a consortium of leading IT industry associations in 65 countries. This share will only rise as China and India continue to undertake strong private and public infrastructure programs, vital to each country's outsourcing ambitions.
Japan is still the heavyweight responsible for over 50% of ICT spending in the Asia-Pacific region. However, India and China are the fastest growing markets. Most ICT spending goes for computer hardware; however packaged software, followed by IT services, is the fastest growing IT segment. The Asia-Pacific region is not only a growing consumer of IT services, but also a major supplier in the form of offshore outsourcing. While India is the world's undisputed leader, China and a number of other regional players are eager to emulate India's success.
eMarketer believes that firms wishing to enter Asia-Pacific markets will benefit from partnering with established, local companies.
Source: eMarketer
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