CARI Captures Issue 610: 2022 estimated gross merchandise value for e-commerce firms in ASEAN (US$ billion)
ASEAN
TikTok Shop grows estimated ASEAN GMV from US$600 million in 2021 to US$4.4 billion in 2022
(15 June 2023) TikTok Shop, the e-commerce arm of Chinese video-sharing platform TikTok, has managed to grown its estimated Southeast Asian gross merchandise value (GMV) from US$600 million in 2021 to US$4.4 billion in 2022, posing the fastest growth rate among e-commerce rivals like Sea Group’s Shopee, Alibaba’s Lazada and GoTo’s Tokopedia. This is according to a study conducted by Singapore-based consultancy Momentum Works. Having made its debut in Southeast Asia in 2021, the company now seeks to expand its footprint in the region, having recently announced that they will invest more than US$12 million in the region over the next three years to support over 120,000 local merchants and businesses. In comparison, Shopee’s GMV grew from US$42.5 billion in 2021 to US$47.9 billion in 2022, maintaining its position as ASEAN’s largest online shopping player with close to half of the region’s market share. On the other hand, Alibaba’s Lazada saw its GMV drop from US$21 billion in 2021 to US$20.1 billion.
SINGAPORE
Singapore’s non-oil domestic exports contract for eighth consecutive month in May 2023
(16 June 2023) Singapore’s non-oil domestic exports (NODX) contracted for the eighth consecutive month in May 2023, falling by 14.7%. This followed a 9.8% contraction seen in April 2023, as well as a 8.3% contraction seen in March 2023. Electronic product exports contracted by 27.2% in May, following a 23.3% decline seen in April. As well, non-electronic exports dropped by 10.7% in May, following a 5.8% drop in April. While NODX to Singapore’s top exports dropped as a whole in May 2023, NODX to China and the United States rose. On a year-on-year basis, total trade declined by 17.9% in May, following the 18.9% contraction in April. Exports and imports fell by 15.2% and 20.7% respectively.
CAMBODIA, SINGAPORE
Cambodian exports to Singapore increases by 1,819.9% year-on-year in May 2023
(14 June 2023) Cambodian exports to Singapore increased by 1,819.9% year-on-year in May 2023. This made Singapore the fourth-largest export market for Cambodia after the United States, China and Viet Nam. Singapore accounted for 6.1% of Cambodia’s exports in May, while the United States accounted for 38.4%, China accounted for 7.7%, and Viet Nam accounted for 7.3%. According to the latest data by the General Department of Customs and Excise (GDCE), for the first five months of 2023 Cambodian exports to Singapore rose by 508.3% year-on-year. As a whole, Cambodian exports rose by 7.9% year-on-year in May, after having dropped for the first four months of 2023. Between January and May 2023, Cambodia’s exports reached US$9.18 billion.
THE PHILIPPINES
Government targets doubling its merchandise and service exports to US$240.5 billion annually in the next six years
(15 June 2023) The Philippines’ government has launched an ambitious target of more than doubling its merchandise and service exports to US$240.5 billion annually in the next six years. Under the government plan, total exports are targeted to rise by 12.5% to 14% annually from 2023 to 2028, driven by electronics and electrical goods, information technology and business process outsourcing services and minerals. Authorities plan to attract more foreign investment, lower the cost of doing business, cut red tape, improve infrastructure, reduce power costs, and address the current mismatch in education and skills levels. The Philippines also plans to maximize preferential trade deals like the Regional Comprehensive Economic Partnership Agreement, of which the country is a signatory.
THE PHILIPPINES
The Philippines’ central bank expected to maintain key rate at current level for remainder of 2023
(16 June 2023) According to the Philippines’ Finance Secretary Benjamin Diokno, the central bank is expected to maintain the key rate at the current level for the remainder of 2023. The Bangko Sentral ng Pilipinas (BSP) is expected to keep the benchmark rate at 6.25% on 22 June, 2023, and possibly for the rest of 2023. According to the Finance Secretary, the BSP may consider a rate cut in the first quarter of 2024. The BSP has raised borrowing costs by 425 basis points since May 2022 to rein in the fastest inflation in the country in 14 years. Inflation had eased to an 11-month low in May 2023. Authorities forecast price gains to ease to within the 2% to 4% target by the fourth quarter of 2023.
INDONESIA
Indonesia’s first publicly-listed film production company MD Pictures looking to raise up to US$150 million
(15 June 2023) Indonesia’s first publicly-listed film production company MD Pictures is looking to raise up to US$150 million over the next six months. The company plans to do this through a rights issue and debt, with the company planning to offload around a 20% stake through the rights issue. Over the next two years, the company plans to raise a total of around US$300 million. MD Pictures also plans to enter into film distribution as well as launch its own content platform. In 2021, the company sold just under a 15% stake to Tencent for around US$50 million. MD Pictures is one of Indonesia’s largest film production companies, and produces content for different platforms. The company’s gross profit doubled to more than US$20 million in 2022.
VIET NAM
Vietnamese economy facing multiple headwinds including shrinking exports and frequent blackouts
(14 June 2023) The Vietnamese economy is facing multiple headwinds including shrinking exports and frequent blackouts. Although Viet Nam’s economy expanded by 8% in 2022, it has been slowing recently. Year-on-year, the January to May 2023 period saw declines of 11.6% in exports, 17.9% in imports and 2.5% in manufacturing. In the first quarter of 2023, GDP growth slowed to 3.3% year-on-year from 5.9% in the fourth quarter of 2022. Falling demand in key export markets such as the EU, the United States, and China may impact Vietnamese exports. Viet Nam has also been suffering from blackouts recently due to high temperatures impacting power supplies. This has negatively impacted business operations in the country. As well, stalled debt talks threaten to shut down Viet Nam’s biggest oil refinery.
RCEP Monitor
NEW ZEALAND
New Zealand officially enters recession in first quarter of 2023
(15 June 2023) New Zealand officially entered a recession in the first quarter of 2023, with a technical recession defined as two consecutive quarters of contraction. GDP contracted by 0.1% in the first quarter, well below the Reserve Bank of New Zealand’s (RBNZ) forecast of 0.3% growth. Meanwhile, GDP in the fourth-quarter of 2022 was revised to a contraction of 0.7% from a decline of 0.6%. Weakness in the economy was broad-based, with output from half of the country’s industries contracting. The New Zealand economy was also impacted by two major cyclones and flash floods in Auckland in January and February 2023. Inflation in New Zealand is tracking at 6.7%, well above the central bank’s target band of 1% to 3%.
CHINA
China’s central bank lowers short-term interest rates to support economic recovery
(13 June 2023) On 13 June, 2023, China’s central bank lowered its short-term interest rates for the first time in ten months. The cut to the lending rate signals possible easing for longer-term rates over the next week and beyond in response to weakening demand and investor sentiment. The People’s Bank of China (PBOC) slashed its seven-day reverse repo rate by 10 basis points to 1.90% from 2.00%. While the central banks of other major economies have raised rates to counter inflationary pressures, the PBOC has been loosening monetary policy to shore up growth. The rate cut suggests Chinese policymakers are increasingly worried about the health of China’s recovery from the COVID-19 pandemic. Bloomberg had recently reported that China was considering at least a dozen stimulus measures including cuts to interest rates to support areas such as real estate and domestic demand.
JAPAN
Bank of Japan maintains ultra-loose monetary policy on 16 June, 2023
(15 June 2023) The Bank of Japan maintained its ultra-loose monetary policy on 16 June, 2023, holding its short-term interest rate target at -0.1% while also electing to make no changes to its yield curve control policy. The Bank of Japan decided to continue with monetary easing amidst uncertainties surrounding economies and financial markets at home and abroad. The bank expects Japan’s economy to recover moderately around the middle of fiscal 2023, with first quarter growth recently revised upwards to 2.7%. Core inflation, which had stood at 3.4% in April 2023, has been consistently above the central bank’s own 2% target for more than a year. According to the bank, the year-on-year rate of increase in the CPI (which excludes fresh food) is likely to decelerate toward the middle of fiscal 2023.