22 Apr 2019
Blockchain Solutions Spending in Asia/Pacific excluding Japan to Reach USD 2.4 Billion by 2022, IDC Reports
SINGAPORE, April 23rd, 2019 – IDC expects blockchain solutions spending in Asia/Pacific excluding Japan (APEJ) to reach nearly USD 523.8 million in 2019, an increase of 83.9% from the USD 284.8 million spent in 2018, according to the latest update of the IDC Worldwide Semiannual Blockchain Spending Guide. Furthermore, IDC forecasts blockchain spending in APEJ to grow at a robust pace over the 2018-2022 forecast period with a five-year compound annual growth rate (CAGR) of 77.5% and total spending of USD 2.4 billion by 2022.
"Networked Integrity, Distributed Power, Value as Incentive, Security, Privacy, Rights Preserved and Inclusion are the seven basic design principle of Blockchain Economy, and are providing the confidence for industry leaders to accelerate their adoptions of this maturing technology, and we have reached an inflection point where implementations are moving quickly beyond the pilot and proof of concept phase for the adoption of Blockchain in APEJ,” said Ashutosh Bisht, Senior Research Manager for Customer Insights and Analysis at IDC. “Blockchain that emerged out of the financial sector is more well-established in this vertical industry. The financial sector accounts for about half of the spend, throughout the forecast period,” Bisht added.
From the financial sector’s perspective, IDC sees banking, securities and investment services, and insurance industries will invest USD 294.8 million combined in blockchain solutions this year. The manufacturing and resources sector, driven by the discrete and process manufacturing industries, and the distribution and services sector, led by the retail and professional services industries, are forecast to see blockchain spending of USD 95.0 million and USD 90.6 million respectively this year. The infrastructure sector will see the fastest growth in blockchain spending over the 2018-2022 forecast with a five-year CAGR of 99.6%, followed closely by the distribution and services sector with a CAGR of 83.0%.
Trade Finance & Post Trade/Transaction settlements and Cross Border Payments & Settlements are the two blockchain use cases that will receive the most investment (USD 82.1 million and USD 79.0 million, respectively) in 2019. The banking industry will be the largest investor for both these use cases.
Manufacturing will focus much of its blockchain investment in LoT Lineage/Provenance as well as Trade Finance & Post trade/Transaction settlements use cases. On the other hand, Regulatory Compliance use cases will receive significant investments from the finance sector followed by manufacturing.
“After much experimentation, this technology is beginning to emerge in a range of production environments driven by the thought leadership of early adopters and an ever-growing industry of blockchain businesses helping their customers realize the value of this technology,” added Simon Piff, Vice President for Security and Blockchain Research at IDC Asia/Pacific. "Indeed, as we see the emergence of the concept of Digital Trust, blockchain is a key ingredient in delivering this trust, at scale, across many markets, allowing a new pace of business interaction that had previously been restricted by process and approval challenges.”
From a technology perspective, IT services and Business Services combined will account for nearly 71.1% of all blockchain spending in 2019 with IT services receiving additional new investment over the forecast period. Blockchain platform software will be the largest segment of spending outside of the services category and the second fastest growing category overall with a five-year (2018-22) CAGR of 77.9%, followed by IT services with a CAGR of 72.0%.
APEJ contributes around 18.4% of the overall worldwide spending on Blockchain in 2019 and is ranked third in terms of spending, topped by US (37.6%) and Western Europe (23.7%). PRC will contribute to about 70% of the APEJ overall spend in 2022, Trade Finance & Post Trade/Transaction Settlements and Transactional Agreements are the top two use cases in PRC contributing to about 30% of the spend.
The Worldwide Semiannual Blockchain Spending Guide quantifies the emerging blockchain market by providing spending data for ten technologies across 19 industries and 16 use cases in nine geographic regions. IDC defines blockchain as a digital, distributed ledger of transactions or records. The ledger, which stores the information or data, exists across multiple participants in a peer-to-peer network. There is no single, central repository that stores the ledger. Distributed ledgers technology (DLT) allows new transactions to be added to an existing chain of transactions using a secure, digital or cryptographic signature. Spending associated with various cryptocurrencies that utilize blockchain and distributed ledgers technology, such as Bitcoin, is not included in the spending guide. Unlike any other research in the industry, the comprehensive spending guide was designed to help IT decision makers to clearly understand the industry-specific scope and direction of blockchain spending today and over the next five years.
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About IDC Spending Guides
IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of IDG, the world's leading technology media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC.