Economy, explained.
One of the mistakes businesses can make is to confuse buying technology with digital transformation (Grab/Unsplash)
Asia leads the world in e-commerce growth – but a fragmented approach to measuring success is holding policy back.
Subscribe to The Informer for monthly expert analysis, and to Events for advance notice of visiting world leaders and distinguished guests.
You may unsubscribe from Lowy Institute newsletters at any time. For information on our privacy practices and how to unsubscribe, see our Privacy Policy.
Counting clicks won’t explain Asia’s e-commerce successCounting clicks won’t explain Asia’s e-commerce success
Asia is at the centre of global e-commerce growth. Across the region, governments are investing in digital infrastructure, businesses are moving online and consumers are becoming increasingly comfortable with digital platforms.
But there is a problem: we have become very good at measuring how much e-commerce is growing, and much less good at understanding why it succeeds.
Transaction volumes, internet penetration, mobile use and the number of businesses selling online are all useful indicators, but they tell only part of the story. A country can have strong digital infrastructure and widespread technology adoption while businesses still struggle to turn those advantages into sustainable commercial performance.
This question is at the heart of our recent research, E-Commerce Research Trend: Transforming Qualitative Models into Quantitative Forms for Measuring E-Commerce Success in the Age of Digital Transformation (Opens in new window). Our study reviewed recent e-commerce research and found a surprisingly fragmented picture of how success is actually measured, with more than 50 different theoretical models identified and four established approaches dominating the field. The diversity of approaches suggests that measuring e-commerce success has become increasingly complex as digital business itself has evolved.
Better measurement leads to better questions, and better questions can lead to better policy.
This matters because many traditional approaches to digital success have focused heavily on whether technology is adopted or used. Adoption is necessary, but it is not the same thing as success. A business can invest in cloud systems, artificial intelligence, analytics and digital platforms without fundamentally improving the way it operates or the value it creates.
One of the mistakes businesses can make is to confuse buying technology with digital transformation. Technology may be present, but if it is poorly integrated into decision-making, customer service, logistics or business strategy, its value remains limited. This distinction also matters for governments trying to assess the progress of their digital economies.
Governments understandably track broadband access, mobile connectivity and digital-platform use because these are relatively easy things to count. It is much harder to measure whether businesses actually have the skills and organisational capability to make effective use of those technologies. Yet this may be precisely what policymakers increasingly need to understand.
If two economies have similar levels of digital infrastructure but very different e-commerce outcomes, the real question is no longer simply whether businesses have access to technology. We also need to ask what businesses are able to do with it and whether digital investment is producing meaningful organisational outcomes.
Our research on measuring e-commerce success (Opens in new window) offers one possible direction. It demonstrates how qualitative dimensions of e-commerce success can begin to be translated into quantitative measures at the business level. The exploratory EBS measurement model (Speed, Spending and Skills) used in the research identifies three broad critical success factors representing system performance, sustained financial investment and organisational capability. The model is not presented as a finished or universally validated measurement system. Rather, it demonstrates how we might move from simply measuring technology adoption towards assessing the business value that digital technologies actually create.
Many traditional approaches to digital success have focused heavily on whether technology is adopted or used (sam sul/Unsplash)
This shift becomes even more urgent with the rapid arrival of generative AI – the latest phase in the evolution of e-commerce, beginning in 2022. AI-enabled systems can create value through prediction, automation and adaptation in ways that may not be visible through traditional measures such as transaction frequency or technology usage.
Asia has an opportunity to think more carefully about what digital-economy success actually means. Infrastructure and access will remain relevant, but they should be considered alongside organisational capability, the ability to integrate technology into business processes and the capacity of businesses to translate digital investment into real value.
The broader environment also matters. Asia does not have a single digital market, and businesses operate across very different economic, institutional and regulatory settings. Consumer confidence, digital skills, access to finance and the ability of smaller businesses to participate effectively can all shape what happens after technology becomes available. These factors deserve greater attention when governments evaluate the health of their digital economies.
The aim should not be to create yet another complicated international ranking. It should be to give governments and businesses a clearer picture of where the real bottlenecks are. If infrastructure is strong but businesses lack digital capability, the answer may be training and organisational support rather than another technology investment. If companies are adopting new technologies without generating greater value from them, policymakers and business leaders need to understand why.
Better measurement leads to better questions, and better questions can lead to better policy. Asia’s digital economy does not suffer from a shortage of technology or ambition; what it needs is a more sophisticated understanding of what turns digital adoption into genuine economic value.
E-commerce success is not simply about putting more businesses and consumers online. It is about whether technology allows businesses to perform better, adapt more quickly and create sustainable value. If we want to understand which digital economies are genuinely succeeding, those are the outcomes we should start measuring.
About the authors
Niusha Shafiabady
Professor Niusha Shafiabady is an internationally recognised expert in the field of Computational Intelligence with many years of professional experience in both academia and industry.
Robert Wu
Dr Robert Wu is a Senior Lecturer in the Discipline of Sociotechnical Engineering at the University of Technology Sydney (UTS), where he specialises in Digital Transformation.
The most-pressing world events explained by Lowy Institute experts and global contributors, in your inbox, every Thursday.
You may unsubscribe from The Interpreter at any time. For information on our privacy practices and how to unsubscribe, see our Privacy Policy.
