Asia Pacific Web 2.0 industry to boom
ConvergenceAsia staff
03/08/2007

The homegrown Web 2.0 industry is projected to boom with a regional population of 900 million consumers under the age of 16.

This accounts for approximately a third of its population, compared to under 20 per cent in mature economies such as the US, UK and Germany. More than 80 per cent of these consumers are coming from India and PRC. In terms of users, IDC estimates that a third of all (unique) Internet users in 2007 are Web 2.0 users in India, 83 per cent for the same in Korea and 70 per cent in PRC, indicating that Internet users are quickly going beyond emailing, chatting and Web surfing.

IDC estimates that the total ICT spending from the provider community of this sector to range between 0.05 per cent to 0.2 per cent of the total ICT spending within most countries. While this proportion and the revenue generated by these providers are small, IDC believes that monetisation of business models will take off in the next 2-3 years. With the entry of new Web 2.0 providers in these markets, the local economies will attract new venture capital, angel investors and other investments.

Given the extensive localised nature of the consumer space in many parts of the Asia Pacific region, the entry of homegrown Web 2.0 companies and their extensive activities collectively, will generate a lot of momentum, interest, demand and excitement. This marketplace affects not only the providers and their consumers/customers, but also the regulatory authorities. The government bodies responsible for content, education and economic development often keep a close watch, in some cases discouraging certain activities (content and education) and in other times, encouraging efforts with incentives (education and economic development). Most governments, in general, encourage the flurry of investments and activities in this space as it creates a vibrant ICT industry that supports a IT/Internet savvy population.

While not every sector or provider has figured out ways to monetise their services, the collective opportunity is growing. Advertising and subscription are the most common business models today and these are expected to grow aggressively. Premium charges (at times on top of subscriptions) are a high margin model although identifying and going to market with commercial services that are extremely well received is never easy. This model however is generally well received among SMB users. Transaction charges typically on top of the commission or revenue sharing model is another popular business model as more online transactions are made and linked to Web 2.0 services.

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