Spending on blockchain solutions is forecast to reach US$2.1 billion in Asia/Pacific excluding Japan (APeJ) by 2022, according to an update of the IDC Worldwide Semiannual Blockchain Spending Guide.
IDC expects blockchain spending to grow rapidly over the forecast period 2017-22 with a five-year compound annual growth rate (CAGR) of 72.6%.
Just this year APeJ blockchain solutions spending is expected to reach US$272.7 million, which is almost a 100% increase against US$138.1 million from 2017.
“What we are witnessing in the APeJ market is that those that have already adopted blockchain technologies are seeing the savings that can be derived,” says IDC Asia/Pacific IT security practice business vice president Simon Piff.
“This translates into savings in time, removal of complexity, and an increased velocity in transactions. This is providing a first-mover advantage to those that have already embarked on this journey. Over time the savings will be industry-wide, but the early adopters will see better returns than the latecomers.
“Concurrently, the technology providers are stepping up and providing several pre-packaged platforms and services that can help accelerate implementation, building upon the lessons learned by the early movers,”
APeJ contributes around 17.8% of the overall worldwide spending on Blockchain in 2018 and is ranked third in terms of spending, topped by the US and Western Europe.
Cross-Border Payments & Settlements and, Trade Finance & Post Trade/Transaction Settlements and Regulatory compliance are the top three use cases driving the spend in the region.
APeJ is all set to adopt Blockchain technology to improve the payment methods and assist in maintaining records for regulatory compliance and checks.
“APeJ is still in its nascent stages of adoption as it received scepticism earlier because of its security issues,” says IDC Asia/Pacific senior market analyst Swati Chaturvedi.
Now, this digital ledger technology has grown beyond borders as we have seen governments/ central banks and financial institutions in countries like India, China, Singapore, Australia, South Korea among others test out pilot projects to reap maximum benefits.”
The top three industries contribute about 66.5% of the overall Blockchain spend in 2018 which are Banking, Discrete Manufacturing and Insurance.
The fastest growing industries in terms of Blockchain adoption are Process Manufacturing with (81.3% CAGR), followed by Retail (78.4% CAGR) and Discrete manufacturing (72.9% CAGR) over the forecast period (2017-22).
From a technology aspect, Services are the largest in terms of catering Blockchain spending, accounting for around 57.7% in 2018, and this trend is likely to continue over the forecast period.
However, Software is estimated to grow at a faster pace registering five-year CAGR of 81.6%, majorly driven by Blockchain Platform, along with security software.