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Subscription Business Models as Tools to Maintain Strong Growth

When the COVID-19 pandemic restricted people from moving out of their homes, they explored digital channels to shop, socialize, and keep themselves entertained.

Subscription Business Models as Tools to Maintain Strong Growth

Subscriptions services continue to outperform product-based companies even after the lockdowns have been eased out.

Subscriptions have seen steady growth across industries and verticals, owing to the convenience, personalization, and value they provide to the consumers. It is estimated that by 2023, nearly 73% of direct-to-consumer brands will offer subscription-based services to their users.

What drives the success of the subscription model

The major reason behind the continued success of subscription services is the agility with which subscription models can adapt and align to changing consumer needs to provide them with appropriate services, regardless of prevailing economic uncertainties.

For instance, amid social distancing norms, consumers can use direct carrier billing to conveniently pay for digital services and products using their payment-enabled internet-connected devices such as mobile phones, tablets, and smart TVs.

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Merchants can quickly tailor their digital payment options and offer direct carrier billing through VIA OpenPlatform to meet the evolving needs of their customers.

The number of internet users in Southeast Asia is on a steady rise, reaching 400 million in 2020 with nearly 40 million new digital users.

This influx of new digital users and heightened online activity in the region has accelerated e-commerce activities, resulting in the region’s internet economy exceeding $100 billion for the first time in 2020, which is projected to reach $300 billion by 2025 at the current rate of growth.

A new way to purchase digital services and products

Subscription e-commerce is the new way of shopping online that enables consumers to buy products on a recurring basis. Subscriptions are usually available for consumables and services that can be used up within a fixed duration.

Owing to the success of the subscription model, even traditional businesses are innovating to benefit from this popular business trend.

For instance, Grab introduced a subscription plan for bubble tea in Singapore, whereas there is an uptick in car subscriptions such as GoCar and Flux in Malaysia.

Having said that, subscription e-commerce is not restricted only to physical products. The software industry and Software as a Service (SaaS) companies were hardly affected due to the pandemic. In fact, e-learning software registered an impressive growth rate of 80% during the pandemic.

Streaming emerged as one of the fastest-growing media channels in Southeast Asia as an estimated 180 million consumers across the region streamed eight billion hours of Over-the-Top (OTT) content per month.

Media streaming subscriptions such as Netflix and Spotify have been around for a while, and have seen impressive growth in the number of subscribers during the pandemic.

In addition, there are regional versions of Video-on-demand (VOD) services in Southeast Asia including iFlix, HOOO, Viu, Viki, Catchplay, and OONA, that are driving the popularity of streaming services in the region.

Subscription services expected to continue growing

As consumers continue to use digital channels for day-to-day activities, new subscription services are emerging and becoming popular.

Given the convenience and ease of use that subscription services provide to consumers, they are expected to grow steadily in the near future.


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