Digital divide risks sustainable growth in SEA’s online economy

Across Southeast Asia, the top 30% of online spenders account for more than 70% of digital economy spend, a new study finds.

According to the e-Conomy SEA 2023 report, from Google, Temasek and Bain & Company, high-value users (HVUs) spend more than six times the amount non-HVUs spend online and are more likely to increase spending over time. 

Why SEA’s digital divide matters

Engaging high-value users has become critical to achieving sustainable unit economics, the report notes, with such users typically found in the region’s metro cities that are nearing saturation point in terms of digital penetration.

But there’s a risk of a digital economic divide appearing, as consumers outside the metros are not treated in the same manner by e-digital service providers. To continue growing in a sustainable way – and unlock the region’s full monetisation potential – companies will need to embrace these consumers in more rural areas and develop cost-efficient supply models.

Takeaways 

• There remains significant headroom in SEA: favourable demographics, growing wealth, and an increasingly urbanised population.
• The digital economy is and will continue to be a major growth driver in SEA, with expected CAGRs significantly above those for GDP in all countries in the next few years. 
• GMV projections suggest the current figure of $218bn in 2023 could reach more than $1trn by 2030. 

Key quote

“We’re now seeing a major trend in a focus and shift towards profitability. What we need to see is more of a focus on impact and outcomes” – Sapna Chadha, Southeast Asia vice president at Google, speaking to Bloomberg TV. 

Sourced from Google, Bloomberg