Southeast Asia’s booming internet economy is set to double to $363 billion by 2025, eclipsing the previous forecast of $300 billion, research from Google, Temasek Holdings Pte and Bain & Co. shows.
E-commerce, travel, media, transport and food are driving the region’s digital growth, with online spending rising 49 percent in 2021 to $174 billion, the companies said in their latest annual report. The region added 60 million new internet users since the start of the pandemic, led by Thailand and the Philippines.
Southeast Asia, home to Alibaba Group Holding Ltd.’s Lazada and Tencent Holdings Ltd.-backed Sea Ltd., will see a 62 percent increase in e-commerce gross merchandise value (GMV) this year as home-bound consumers pick up groceries and essentials from the likes of Lazada’s RedMart and Sea’s Shopee.
Online shopping is now forecast to hit $234 billion in 2025 versus a previous $172 billion estimate, making up 64 percent of the region’s total estimated digital GMV of $363 billion, the research shows.
“Continued shifts in consumer and merchant behavior, matched with strong investor confidence, have ushered Southeast Asia to its ‘digital decade’ -- and the region is on its way towards $1 trillion GMV by 2030, Google and its partners said in the report.
Deals for internet companies in Southeast Asia totaled $11.5 billion in the first half of this year, putting the region on track to surpass the $11.6 billion investment in all of 2020. Some of the region’s most valuable tech startups including Grab Holdings Inc. and GoTo are preparing to go public to raise capital or allow early investors to monetize their holdings.
Indonesia is the region’s largest digital economy where online spending will probably double to $146 billion by 2025. Venture capital deals in the country in the first half of 2021 surpassed the full-year totals of each of the past four years, the report showed. Vietnam is expected to grow at the fastest rate among the six countries tracked by the study, nearly tripling in online GMV over the next four years.
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