SEA digital economy on track to hit US$200bn this year

Despite economic headwinds, Southeast Asia’s digital economy is on course to grow 20% year-over-year to reach US$200 billion in gross merchandise value (GMV) in 2022 – three years earlier than was anticipated in 2016's inaugural *e-Conomy SEA report.

Why it matters

By driving social progress, improving digital and financial inclusion, and making a positive impact on the environment, Southeast Asia will be able to realise its full potential as a US$1 trillion digital economy by 2030.

Takeaways

• Three digital sectors show growth: e-commerce continues to accelerate, while food delivery and online media return to pre-pandemic growth levels; but travel and transport recovery to pre-Covid levels will take time.

• The first growth-trajectory is S-shaped: in pole position is e-commerce, still thriving and expected to hit 16% GMV growth despite the partial resumption of offline shopping.

• The second is a return to trendline growth for food delivery and online media, which are facing slowdowns after peak periods triggered by the pandemic.
• The third is U-shaped: transport and online travel sectors are expecting strong recovery, 43% and 115% year-on-year growth respectively, as mobility exceeds post-pandemic levels and international travel resumes.
• The path to profitability and digital inclusion are necessary enablers to help SEA unlock the potential US$1 trillion digital economy by 2030.
• After years of acceleration, digital adoption growth is normalising, with the majority of digital players shifting from new customer acquisition to deeper engagement with existing customers, to increase usage and value.
• Digibanks are racing for mass and unbanked consumers while established banks fast-track digitalisation, with double-digit growth seen across all digital financial services sub-sectors – payments, remittance, lending, investment, and insurance.

Key quote

“While increasing profitability and maintaining growth momentum in the next two to three years has become a priority for companies across the region, it’s just as important to ensure the digital economy scales in an environmentally and socially sustainable way” – Stephanie Davis, Vice President, Google Southeast Asia.

“Through the waves, towards a sea of opportunity” is the seventh e-Conomy SEA report to come from Google, Temasek and Bain & Co. It tracked the digital economy sectors of six countries – Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.