Coronavirus concerns aside, powerful trends point to boom time for Asian tech

Asian technology and innovation are underpinned by powerful structural trends promising growth, such as China’s 5G roll-out, Japan’s robotics dominance, and the region’s rapid adoption of enterprise services

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The humanoid robot Sophia, developed by Hong Kong-based company Hanson Robotics, appears on stage during a meeting about artificial intelligence in Kolkata, India, on February 18. Photo: AFP

Published: 3:00pm, 8 Mar 2020Updated: 1:07pm, 10 Mar 2020

Assumptions about Asian equity markets are being called into question amid a short-term reassessment by the region’s companies over the coronavirus fallout.

While much remains unclear, as people stuck at home flock to e-commerce platforms to shop, probably cementing online habits, there are powerful structural trends underpinning technology innovation across Asia – and those themes are unchanged. In fact, 2020 may be the year that Asian technology goes from exciting to in the ascendancy.

There is a massive, multi-year monetisation opportunity in gaming, e-commerce and enterprise software, while in hardware, there is demand for Asian supply chains in cloud computing, automated driving, smartphones and fintech.

Asian technology leaders have lagged behind their counterparts in the United States due to weaker sentiment, first from trade war worries and, more recently, from the coronavirus. These fears risk discounting the powerful growth potential of these companies. The rise of the middle class, the increasing need for technology insourcing and the 5G roll-out are some reasons to take a brighter view.

5G technology can help companies improve efficiency and expand margins. And the investible universe boosted by 5G is not limited to just smartphone hardware suppliers or telecommunication companies.

Improved connectivity offered by 5G will provide a better platform for gaming and online shopping. On the corporate side, there is huge potential in enterprise software platforms, with 5G enabling further developments related to cloud computing and the internet of things. Even banks could benefit from 5G, as mobile services are increasingly important in revenue generation.