ASEAN has been unable to take full advantage of the rapid growth of electronic commerce, given uneven levels of openness in data flows within and across the region. Strengthening domestic and regional regulations in this sector will unleash the region’s potential to help its post-pandemic recovery.
The rapid growth of electronic commerce (e-commerce) presents an opportunity for ASEAN firms to increase their participation in domestic and international markets. To foster stronger e-commerce, ASEAN governments can enhance data flows, which cuts transaction costs, speeds up the spread of ideas, and lets users utilise new research and technologies. E-commerce in ASEAN countries is currently hampered by different levels of domestic data flows and uneven policy and legislation, which in turn restrict cross-border data flows. Such restrictions make it costly for firms to use the most convenient data processing provider and to transfer data.
As the Covid-19 pandemic becomes more manageable, ASEAN’s retail e-commerce sales are forecast to grow faster than those of the rest of the world. Global retail e-commerce sales grew by 14.3 per cent from US$4.28 trillion in 2020 to US$4.89 trillion in 2021, compared to ASEAN’s retail e-commerce sales, which jumped 26.1 per cent from US$59 billion to US$74.4 billion in the same period. Businesses already established online or fast adopters from an offline to online presence have been better equipped to take advantage of the rise in online shopping volumes, which surged as pandemic restrictions were implemented. The surge of e-commerce during the pandemic underscores the importance of e-commerce in strengthening ASEAN’s regional trade recovery.
Ideally, a comprehensive regulatory framework would support the further development of ASEAN’s e-commerce, and increase trust amongst stakeholders on data sharing. An analysis of regulatory elements using data from the World Bank’s Global Data Regulation Diagnostic Survey in 2021 reveals that the regulatory regime surrounding e-commerce and electronic transactions (e-transactions) is the sole bright spot for ASEAN countries (Table 1). Most members have passed all or nearly all the regulations for such transactions.
However, the same analysis reveals how regulations enabling the access and reuse of public and private intent data are comparatively weak or non-existent. This denies ASEAN governments and companies the potential synergies that can come from creative combinations in repurposing public and private intent data to improve service delivery or solve data gaps, as a recent World Bank resource highlights. Enabling the reuse of public intent data — data collected with the intent of serving the public good — is only moderately developed. For instance, Indonesia and Thailand have passed all necessary regulations to enhance the access and reuse of such data, while Cambodia and Laos have not established any. Enabling the reuse of private intent data — data collected by the private sector as part of routine business processes, also called ‘big data’ — is the weakest area of performance. Four out of the nine ASEAN countries assessed have not established any regulations to enable access and reuse of such data. Different degrees of enforcement of e-commerce related laws and regulations may further exacerbate this divergence.
The limited reuse of public and private intent data means that governments, e-commerce firms and consumers in ASEAN cannot reap the full benefits of data flows. Establishing open data policies is a stepping stone to enable value creation for boosting growth. Governments, firms, and consumers can leverage on this openness to make more informed decisions, develop new products and services, and promote transparency.
At the domestic level, individual ASEAN countries should unlock data flows by enabling the reuse of public and private intent data. For the former, government-produced data such as administrative, census and survey information would be augmented by regulatory frameworks of common technical standards and open licensing regimes. Allowing access to public sector data that have not been published on open data platforms and establishing policies on open data and data classification are also good practices. For the reuse of private intent data, such as consumers’ transaction and browsing histories, governments can encourage open data licenses among private firms, promote the right to data portability for individuals, and strengthen the public-private partnership to utilise a digital identification system.
The limited reuse of public and private intent data means that governments, e-commerce firms and consumers in ASEAN cannot reap all the benefits of data flows.
At the regional level, ASEAN policymakers and regulators should embed international best practices into their domestic rule-making procedures and prevent conflicting regulations from creating unnecessary barriers to cross-border data flows. They should also explore establishing mutual recognition arrangements and/or harmonise their data-related regulations within and outside the region. These efforts should complement the ongoing implementation of the e-commerce provisions under the Regional Comprehensive Economic Partnership (Chapter 12, RCEP) and the ASEAN e-Commerce Agreement.
The rise of e-commerce coupled with the implementation of e-commerce commitments in ASEAN and RCEP presents a unique opportunity for ASEAN countries to establish new data reuse regulations or revise existing ones. This would speed up data sharing among ASEAN countries, especially Cambodia, Laos, Myanmar, and Vietnam, where the e-commerce sector is emerging. Strengthening e-commerce regulations would provide a much needed reset in the region as it forges through the pandemic.
Sithanonxay Suvannaphakdy is Lead Researcher (Economic Affairs) at the ASEAN Studies Centre, ISEAS – Yusof Ishak Institute.