Can you imagine a life without smartphones?

Smartphones are transforming SEA. This Japanese author recently visited this part of the world which changed his notion of it as one with developing economies

Image Credits: 1000 Words / Shutterstock.com

Image Credits: 1000 Words / Shutterstock.com

“The power of images”. The expression flashed in my mind when I saw the photo below on NBC News; both top and bottom images were taken at the city of Vatican in 2005 and 2013 respectively.

2005-2013

It plainly shows how far smartphones and tablets have changed our world in mere eight years.

Japan is no exception. In trains, on streets, and at social gatherings, we encounter an overwhelming number of smartphone and tablet users. According to a survey by the Ministry of Internal Affairs and Communications, smartphone users in Japan exceeded 50 per cent of the total mobile users in 2013.

In my observation, smartphone users should account for at least 60-70 per cent of the total mobile user population, but the survey might have been affected by dual users, who typically use company-provided feature phones for business.

And I assume, or am almost convinced, that many of you are reading this post on smartphones or tablets.

According to my personal experiences, the widespread use of smartphones disrupts three things in our daily life:

disrupted

A wide variety of things, such as digital camera, mobile music player etc, are also disrupted by smartphones, but my overall impression is that our life has become “more convenient”. Now, I cannot imagine going back to the life without a smartphone.

Before smartphones, the digital infrastructure was merely an “extended version of analog infrastructure”. Now, smartphones have given rise to a “new world”.

Easy communication
When mobile phones became standard, emails and text messages enabled communication, other than voice calls, with specific respondents. Text communication made everything so convenient that I assumed that further evolution would be impossible.

That was then. This is now:

  • Facebook, Twitter, and other sharing tools have become standard infrastructure.
  • Even communication conventionally meant for specific respondents has moved on to multiple-respondent infrastructures such as LINE.
  • Emoticons developed on the mobile environment have also evolved, and bigger and cuter stamps are now leading the trend.

The changing face of mass media
In the 2000s, the internet environment was nothing more than an extension of paper-based newspaper subscription. Newspapers posted articles they wanted us to read, and we either read or searched for them.

In this sense, smartphones might have altered the way we treat mass media.

Also Read: Smartphone sales in Southeast Asia reached 18 million units in Q1 2014

When you want to catch up with news, you access the Facebook Timeline and find an article which your friend has shared or liked. You then decide to read it because your friend is interested in it. Or you check NewsPicks and access an article on which a celebrity has made a comment. When a video clip is going viral, you feel pressed to watch it.

It’s e-commerce now
Since when have we become such heavy e-commerce users? If I remember correctly, not long time ago, goods available through e-commerce were limited, and the sites were not as expansive and complete as they are now.

Today, we are able to search and purchase goods within a few seconds through sites such as Amazon and Yahoo! Auction (in my case, I always tend to buy too much).

Now we have a variety of sellers ranging from professional stores to individuals. Goods are also diversified to include new goods, returned goods, surplus goods, etc. In short, everything is available.

Also Read: With 140% mobile penetration, Malaysia has 10M smartphone users

Personally, I still prefer buying branded goods and luxury items at brick-and-mortar shops after having a good look at them, but in five years’ time, I might be reminiscing about the good old time.

Fascinating SEA
Now let us have a look at Southeast Asia, the theme of this write-up. Recently, I had an opportunity to travel to Southeast Asia, where signs of the arrival of a “new world” were obvious. It was then that my notion of it as a region with developing countries was destroyed.

Southeast Asia is a popular business and leisure destination for many Japanese. Many of us must have visited the area in the past too. The scorching sun, noisy cities brimming with diverse religions, cultures, energetic people, and neon streets that never sleep. I am one of those who are completely fascinated by the charms of Southeast Asia.

At a glance, ASEAN consists of ten countries including developed member countries like Singapore and Brunei, as well as emerging countries like Myanmar and Cambodia. As a whole, it makes up an enormous market representing more than 600 million people.

We have opened DI offices in Singapore and Vietnam and have been working hard in hopes of taking part in the growth that the region is experiencing. A majority of Japanese might still associate Southeast Asia with the image of “emerging countries”. In fact, GDP per capita of ASEAN member countries is below US$3,000, which is less than a tenth of that of Japan.

However, in the smartphone and tablet market, the picture looks totally different.

Smartphone Penetration Rate in 2013

Smartphone Penetration Rate in 2013

In the graph, the area highlighted in green represents smartphone users in the entire mobile user population. As mentioned above, the proportion of smartphone users in Japan has just reached 50 per cent. In Singapore and Malaysia, however, the ratio goes above the stunning 75 per cent. Even in comparison with other developed nations (60 per cent – 70 per cent in the US, the UK, France and Germany), smartphone penetration rates in some Southeast Asian countries are remarkable.

This may suggest the irrelevance of economy size or GDP per capita and smartphone prevalence. In countries with overwhelming smartphone prevalence, such as Singapore and Malaysia, services beyond our imagination are being made available and transforming the existing infrastructure.

Let’s take “stars” as an example.

For many Japanese, TV idols are their stars. Johnny’s and AKB48 have tactfully cohabited with other TV programmes (music shows, variety and drama) and supplemented each other. Before TV became a standard household item, “stars” meant “silver screen stars”, movie stars from other world.

A similar shift, equivalent in its magnitude to the rise of the television, is taking place in Southeast Asia right now.

In the region, YouTube has been establishing dominance in the visual market in place of TV. Talents are rising to stardom through the channel. YouTube stars or “YouTubers” have been garnering overwhelming popularity in Southeast Asia. .

The majority of viewers are teenagers who place YouTube above TV as the main visual platform. For example, Pew Die Pie, one of the most popular YouTubers, enjoys the fan base of 30 million subscribers. If some of the 30 million subscribers “like” or “share” the post, it spreads across the network with amazing speed and scale. Eventually, his post achieves tens of millions of views with ease.

Young fans waiting for their stars”, outside the event venue, Singapore; photo taken by the author

Young fans waiting for their stars outside the event venue in Singapore (Photo taken by the author)

This May, an event hosting YouTubers from Southeast Asia and across the world took place in Singapore. In the photo above, the fans are waiting at the stage door for YouTubers, not TV stars. For teenagers in Southeast Asia, an event where the worlds’ biggest YouTubers are brought together is equivalent to a dream collaboration of AKB48, Johnny’s, Beyoncé and Johnny Depp for the Japanese audience.

The moment when YouTuber made an appearance”, inside the event venue, Singapore; photo taken by the author

The moment when a YouTuber made an appearance at the event venue in Singapore (Photo taken by the author)

Smartphones are not so prevalent in some SEA countries. And, for some reason, these countries tend to be very populous.
This means that the smartphone sale in this region is set for an explosive growth. Some people forecast further two billion smartphone sales in Asia in the coming five years.

In 2019, about three billion smartphones will populate the Asian region, representing the majority of total smartphones in the world.

Estimated Smartphone Penetration Rate

Estimated smartphone penetration rate

Smartphones and tablets have caused a fundamental shift in the lifestyle of developed countries. The shift in the Southeast Asian society will be greater both in speed and scale.

Lastly, the youth in the region have a good command of English. Facebook and YouTube comments/self production are overwhelmingly in English. Therefore, the young generation in SEA is not only able to receive content from the US and other English-speaking communities, but is also capable of competing with counterparts around the world with their English user generated content.

This stands in stark contrast to the Japanese content, protected behind the language wall but at the same time unable to compete on the global stage.

My next post will focus on  the shift that smartphones and tablets have brought to the content industry, and how they are to change it further.

References

(1) ASEAN GDP and GDP per Capita

(2) Nielsen report: the Smartphone Adoption Gap in Asia Pacific

(3) The West Is Over — Asia Will Dominate The Smartphone Industry In The Next 5 Years

The views expressed are of the author, and e27 may not necessarily subscribe to them.

e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested to share your point of view, please send us an email to writers[at]e27[dot]co

Hide Ono

Hide is an investor and incubator from Dream Incubator Inc. (DI), a global venture capital/private equity and management consulting firm headquartered in Tokyo. His main goal is to break the language and cultural barriers among Japan and the world. Prior to joining DI, Hide spent seven years at Goldman Sachs in Hong Kong and Tokyo covering various operations. Hide studied Political Philosophy at Keio University, earning a bachelor's degree of Law. Email: ono.hideaki@dreamincubator.co.jp LinkedIn: http://jp.linkedin.com/in/hideakiono

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