SINGAPORE: Southeast Asia's internet economy could be worth more than US$200bn by 2025, representing a massive sixfold increase from its current value, a new report has revealed.
The bold predication was released by Google and investment company Temasek, at a conference in Singapore convened to discuss the future of the e-economy.
Google and Temasek based their findings on proprietary Google data, economic statistics and interviews with regional entrepreneurs, and they focused on six countries in the region – Indonesia, Malaysia, Singapore, Philippines, Thailand and Vietnam.
Beyond the headline finding of US$200bn, which covered everything from online shopping to advertising, the study also revealed that e-commerce in Southeast Asia could be worth US$88bn within a decade after growing at a rate of 32% a year.
Meanwhile, the online travel market is forecast to reach US$90bn, after growing at 15% a year, while online media – such as games and advertising – could grow at 18% a year to US$20bn.
In addition, the on-demand online market, such as taxi-hailing service Uber, is expected to reach US$13bn after recording 18% annual growth.
These impressive rates of growth are being driven by the region's rapid adoption of smartphone technology as well as its burgeoning young population, but the report also highlighted some obstacles.
It said making Southeast Asia a £200bn internet economy will require additional investment of $40bn to $50bn over the next ten years as well as overcoming five key challenges.
These include improving the talent available for start-ups, making them less reliant on technical expertise from Chinese and American expats.
Payment mechanisms need to be improved along with overcoming slow internet speeds and low penetration caused by regulatory and geographical constraints.
State investment is also required to improve the region's logistics infrastructure, such as the road and rail network. And finally, the report said more needs to be done to improve consumers' trust in making online transactions.
Data sourced from Google, Tamasek; additional content by Warc staff