Asia’s Growth in the Smart Mobility Market
2021/08/25
Image by David Peperkamp on Shutterstock
Asia’s Growth in the Smart Mobility Market
Smart mobility – a concept once considered abstract and futuristic – has now become a global reality. As more smart cities emerge in Asia and worldwide, societies are inevitably witnessing the rise of smart mobility, as both of these developments are intrinsically intertwined.
What is smart mobility? It is essential to understand that the concept of smart mobility emerged as a response to the transportation issues faced by many countries. Essentially, smart mobility taps into technology to deploy an intelligent transport and mobility system through various mobility devices, such as cars, bikes, personal mobility devices, and other channels. These solutions are designed to reduce carbon footprints, increase societies’ quality of life, and provide communities with a seamless and efficient travel system.
It is estimated that by 2027 the global worth of the smart mobility market will be US$70.5 billion, with a CAGR of approximately 20.5%. It is forecast that Europe will hold the largest share of the smart mobility market. However, Asia Pacific is projected to have the fastest-growing CAGR due to smart cities emerging in South Korea, Singapore, and China, among others.
In 2019, China held the largest share of the Asia Pacific GPS smart mobility market and it was predicted to have a market value of US$1.76 billion by 2026. Japan and India are also considered to have highly favourable growth rates, with projected CAGRs of 18.7% and 20.1%, respectively. These growth rate projections take into account the effects that COVID-19 has had on the growth of the smart mobility industry between 2020 and 2021.
Asia Pacific’s growth in this industry is not surprising, especially given the surging popularity that smart mobility businesses are enjoying in this region. In Asia, companies such as Grab, Uber, Gojek, Didi, and Ola have seen tremendous demand, allowing them to expand their services into other areas of smart mobility besides ride-sharing, such as delivery services. For example, Grab, a ride-sharing company from Singapore, is now valued at US$40 billion, nine years since its debut in 2012. It is estimated that the value of the online ride-hailing market will be almost quadruple its value as of 2020, hitting US$42 billion by 2025 within the Southeast Asia region alone.
One of the critical factors to the rise of smart mobility in Asia Pacific is the region’s adoption of the Internet of Things (IoT), which is significantly on the rise. It is estimated that by the end of this year, Asia Pacific will have spent almost US$288.6 billion on IoT. While the pandemic did affect spending on the development of IoT within the scope of transportation, market experts have projected that this challenge will be overcome in the next few years as countries in the region continue to invest in further development of the smart mobility market.
At the same time, it is critical to note that the growth of smart mobility in Asia can be attributed to the easing of everyday life that this industry offers. For example, Indonesia is known for its massive traffic congestion, especially in its capital, Jakarta. With ride-sharing solutions offered by the popular app Gojek, Indonesians can significantly reduce their travel time by opting for a ride on a motorbike, thus avoiding car congestion. In countries like Singapore and Hong Kong, where owning a car is very pricey, smart mobility offers a cost-effective solution that allows for seamless travel.
As the smart mobility market continues to develop, it is to be expected that the Asia Pacific region will witness a surge in new and innovative businesses that will aim to provide practical solutions to benefit the population. These new players in the industry could prove to be game-changing for how the smart mobility industry will blossom in the region.