Southeast Asia’s internet economy is on course to reach US$100bn this year, representing a 39% increase from $72bn in 2018, and is then expected to triple in size to $300bn by 2025.
This is according to the e-Conomy SEA 2019 report by Google, Temasek and Bain & Company, which analysed current and future trends across the region’s six largest markets – Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
Now in its fourth year, the report attributed the growth to a surge in new online users, which increased by 100 million since 2015 to its current level of 360 million.
And it identified Indonesia and Vietnam as the fastest-growing digital economies in the region, with both recording growth rates exceeding 40% per year, although the other four economies still delivered impressive growth rates of between 20% to 30%.
Much of the growth has been driven by e-commerce, which is now valued at $38bn compared with just $5.5bn in 2015, and the report said the sector is on track to hit $150bn by 2025.
More than 150 million people in the region are now shopping online, the report added, and these include 40 million who like to use on-demand services, such as ride-hailing firms and food delivery. Indeed, ride-sharing, transport and food delivery services alone are valued at $12.7bn.
Another booming sector is online travel, which is estimated to be worth $34bn, while the online media industry – including advertising, gaming and subscription video and music streaming – is said to be worth $14.2bn. And this sector is expected to grow to $32bn by 2025.
Meanwhile, digital payments are expected to grow from $600bn in 2019 to more than $1 trillion by 2025, accounting for almost one in every two dollars spent in the region.
“Digital financial services offer the biggest opportunity for serving the underbanked, nearly 100 million adults in the region with limited access to financial services currently, by lowering costs and bridging gaps in data availability,” said Florian Hoppe, partner and leader of Asia Pacific Digital Practice at Bain & Company.
“Mobile technology is changing the way Southeast Asians work and live; providing them with greater access to new opportunities and markets,” added Rohit Sipahimalani, joint head of investment at Temasek, Singapore’s sovereign wealth fund.
“Together with businesses, governments and communities, we are committed to helping create a better, smarter, and more sustainable Southeast Asia.”
Sourced from Google, Temasek, Bain & Company; additional content by WARC staff
