Southeast Asia

Southeast Asia’s internet economy booming (The ASEAN Post)

Southeast Asia’s internet economy has reached US$100 billion for the first time and is expected to triple by 2025.

This year’s edition of the e-Conomy Southeast Asia report released by Internet giants Google, Singaporean sovereign wealth fund Temasek and global consultancy firm Bain & Company last week showed how Southeast Asia’s internet economy has more than tripled in size over the last four years amidst a fundamental shift in the way people shop, eat and get around.

Southeast Asia currently has 360 million internet users, an increase of 100 million from four years ago – paving the way for a 39 percent increase in the value of Southeast Asia’s internet economy, from US$72 billion in 2018 to US$100 billion in 2019.

Another key finding would be that the region’s internet economy will be worth US$300 billion by 2025. Crucially, the 2016 and 2017 reports foresaw a US$200 billion regional Internet economy by 2025 while last year’s estimate was US$240 billiion thanks to “drastic market acceleration”.

The fourth in a series of annual reports, the e-Conomy Southeast Asia study is a multi-year research program aimed at providing insights into the region’s internet economy and covers the six largest markets in ASEAN; Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. 

This year’s edition covers five key sectors of the internet economy: online travel; online media; ride hailing; e-commerce; and a first in the series – digital financial services.

E-commerce, ride hailing

Both e-commerce and ride hailing, which includes food delivery services, are experiencing a burst of demand as a result of both, rapid adoption and fundamental shifts in consumer behaviour according to the report. 

Both have become an integral part of daily life for millions of Southeast Asians – especially those living in big cities – as they offer convenience, value and access to services and products that were previously difficult to obtain.

E-commerce is the biggest and fastest-growing sector in the report, and with more than 150 million Southeast Asians now buying what they need online, the sector is valued at US$38 billion today – seven times more than the US$5.5 billion it was valued at in 2015.  

While in the past, e-commerce consumers would visit such marketplaces hoping to get discounts on big-ticket items such as electronics; today’s shoppers are turning to the internet for more frequent purchases of lower-cost items including groceries, personal care and apparel.

Ride hailing has also exploded over the past few years, with 40 million people ordering transport, food and other services on demand compared to just eight million people in 2015. 

Now worth US$13 billion, the ride hailing sector is especially popular in cities where private vehicle ownership is costly and traffic jams are the norm. Similarly, an increasingly time-conscious middle-class segment is relying on food delivery services for meals they would otherwise have to cook at home or buy from vendors.

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The ASEAN Post

8 October 2019

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