E-commerce and Digital Connectivity: Unleashing the Potential for Greater India–ASEAN Integration

 -Journal of Asian Economic Integration

Technology is bringing rapid changes across the globe, with digital connectivity and e-commerce platforms emerging as important drivers connecting producers across geographies (United Nations Conference on Trade and Development [UNCTAD], 2019).

India and Association of Southeast Asian Nations (ASEAN) are among the fastest growing e-commerce markets in the world and are developing into potential digital economies of the future with fast adoption of fourth industrial revolution (4th IR). Some key drivers of this growth include high levels of mobile usage and reduction in prices of smartphones, rising internet penetration and broadband connectivity adaptation, an increasing urban and young population, to name a few (KPMG & FICCI, 2019).

A number of studies have shown that digital connectivity and e-commerce can help small and mid-sized businesses and marginalised groups such as women in developing economies of ASEAN and India to access global markets (see Chiu, Wang, Fang, & Huang, 2014Choe, 2016Rahayu & Day, 2015). E-commerce has a lower cost of entry compared to traditional businesses, requires less staff, and firms can reach their customers directly by cutting down on intermediaries. Small and mid-sized firms are also able to directly acquire a lot of information on their customer purchase behaviour (Organisation for Economic Co-operation and Development [OECD], 2019). E-commerce helps consumers access and compare a wide range of products and services, purchase from any location and at any time as per their convenience, and get the product delivered to the place of their choice.

India is one of the fastest growing digital economies, which has the potential to create over US$1 trillion of economic value and 65 million new jobs by 2025 (McKinsey, 2019). The digital economy of ASEAN constitutes around 7 per cent of its gross domestic product (GDP) and with digital integration among all its member countries, it is projected to have an increase in GDP by US$1 trillion by 2025.