Southeast Asia internet economy exceeds $100B, online population hits 360M
The Southeast Asian internet economy has expanded by 39% to hit $100 billion for the first time this year, with Indonesia and Vietnam clocking growth rates of more than 40%, while Singapore, Malaysia, Thailand, and the Philippines register growth of between 20% and 30%. And with more than 150 million shoppers hitting online stores, the region’s e-commerce sector now is worth $38 billion, a far cry from 2015 when it was valued at just $5.5 billion.
The biggest and fastest growing sector, e-commerce was projected to be worth $150 billion by 2025, according to this year’s e-Conomy Southeast Asia report released by Google, Temasek Holdings, and new research partner Bain Company. First published in 2016, the annual report assesses the region’s six largest markets–home to 570 million–across five sectors, including online travel, online media, and digital financial services.
Digital economy can push Asean GDP up $1T, if markets operate as one
Currently representing just 7 percent of GDP, Asean’s digital economy can drive an uplift of US$1 trillion by 2025 across the region, but digital trade barriers and lack of seamless cross-border payments are key barriers.
Worth $72 billion last year, the Southeast Asian internet economy was expected to be worth $300 billion by 2025. Between 2015 and 2019, it expanded at a compound annual growth rate of 33%.
In fact, the gross merchandise value of the region’s internet economy contributed 3.7% of its gross domestic product (GDP) this year, up from 1.3% in 2015, and was expected to grow to 8% by 2025.
Southeast Asia’s robust growth was fuelled largely by its growing online population, which saw some 10 million logging on for the first time this year to reach a total of 360 million this year. More than 90% of this online community accessed the web primarily via their mobile phone.
On-demand services, in particular, this year had been tapped by 40 million online users for transport and food, amongst others, up from 8 million in 2015.
Increased connectivity also had pushed the adoption of digital financial services, where online payments registered $600 billion this year and were projected to clock more than $1 trillion in gross transaction value by 2025. This meant that almost one in every two dollars in Southeast Asia would be spent digitally.
The region remained a haven for tech startups seeking new funds, chalking up more than $37 billion of capital over the last four years. Some $7.6 billion in funds were secured in the first half of 2019, up 7% over the same period last year.
E-commerce and ride-hailing companies led the way, pulling in two in every three dollars raised since 2016, as the two sectors saw high growth with consumers increasingly adopting these services.
E-commerce, in particular, raised another $2.5 billion in the first half of the year after snagging a record $4.3 billion in funds last year. The report noted that unicorns in this market had shored up billion-dollar in funds including Bukalapak, Lazada, Shopee, and Tokopedia.
Estimated at $40 billion in 2019, Indonesia’s Internet economy has more than quadrupled in size since 2015 at an average growth rate of 49% a year. As the largest and fastest growing Internet economy in the region, Indonesia is well on track to cross the $130 billion mark by 2025.
In pa icular, the e-Commerce and Ride Hailing sectors are ring on all cylinders, fueled by intense competition between Indonesian and regional players. All sectors are also bene ting from the growing adoption of Digital Payments.
Vietnam’s Internet economy is booming as well, as it reaches for $12 billion in 2019 on a 38% annualised growth rate since 2015. With the GMV of its Internet economy set to account for over 5% of the country’s GDP in 2019,10 Vietnam is emerging as the most digital of all economies in the region. e-Commerce is a key driver behind the impressive numbers, where homegrown marketplaces like Sendo and Tiki compete with regional players like Lazada and Shopee.
Google’s Southeast Asia managing director Stephanie Davis noted that consumers in the region were turning to digital to perform many of their daily tasks, fuelling “unprecedented growth”. To ensure the region’s internet economy continued to expand, Davis urged for support to help small businesses grow, digital skills to be taught, and for “smart” policies and regulations.
Bain Company’s partner and Asia-Pacific digital practice lead Florian Hoppe added: “Digital financial services offers 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. This segment will be the main battleground for most players, with consumer technology platforms well-positioned to serve their needs given their large and engaged user base.”
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Digital economy can push Asean GDP up $1T, if markets operate as one
Currently representing just 7 percent of GDP, Asean’s digital economy can drive an uplift of US$1 trillion by 2025 across the region, but digital trade barriers and lack of seamless cross-border payments are key barriers.
Article source: https://www.zdnet.com/article/southeast-asia-internet-economy-exceeds-100b-online-population-hits-360m/#ftag=RSSbaffb68