Southeast Asia's internet sector is forecasted to be more than $240 billion-worth economy by 2025, according to the e-Conomy SEA Reports 2018 released on Nov. 19 by Google and Temasek, a Singaporean holding economy owned by the Government of Singapore.
The digital economy in the region will be driven primarily by the surging e-commerce and ride-hailing sectors, the report found.
The e-Conomy SEA Reports analyzed the trend in ride-hailing, e-commerce, online media, and online travel across six major drivers in the Southeast Asian region, namely Singapore, Indonesia, Malaysia, Vietnam, Thailand, and the Philippines. The report also looked into new sectors in the digital economy, including online food delivery, music subscriptions, and video on demand services.
In the report, authors Rajan Anandan, vice president for Google India and Southeast Asia, and Rohit Sipahimalani, head of the investment group for Singapore's Temasek, noted that the region is actually beating analysts estimated timeline for the success of its digital economy. With eight years more to go, the region, through its tech companies, has already achieved more than a third of $40 to $50 of its target.
In fact, just within the past three years, the region's online industry has generated a value more than the combined GDP of over 100 countries. By the end of this year, the value of Southeast Asia's digital economy which measured by gross merchandise value is estimated to be nearly $72 billion, jumping as much as 37 percent from 2017. Gross merchandise value is comprised of the total dollar value of merchandise sold online.
Since 2015, Southeast Asian tech companies have amassed an estimated $24 billion; hence, investor confidence grows with the industry as well.
The more investors ventured in the region, the faster the growth rate of the digital economy that in the first half of 2018, the industry already amassed $9.1 billion.
Investor funding extends even to much smaller startups, with the number of non-unicorns swelling four times in the first half of the 2018 year on year.
The achievement was driven primarily by the boom of e-commerce in the region, particularly by the performance of Lazada, Shopee, and Tokopedia which are homegrown in the region. This segment has delivered twice this year the value it brought in the last year.
Southeast Asia's e-commerce market alone is estimated to achieve a value of as much as $102 billion, relying primarily upon the 350 million internet users in the region. Since 2015, there have been a total of more than three million Southeast Asians going online for the first time every month.
As for ride-hailing services, 35 million Southeast Asian are using the related apps every month with eight million rides being taken every day across 500 Southeast Asian cities.
The food delivery service sector has also been driving the region's rapid growth, with GO-JEK and Grab leading the now $2 billion-worth segment.
