The digital decade has arrived in Southeast Asia, and there is no turning back


Be enthusiastic: The Roaring 20s report predicts a digital economy of $ 1 trillion in the region by 2030.

GUESS how many people started using the internet in Southeast Asia this year? 10 millions? Really too low. Try again. 20 millions? Double that number and you’ll be there.

Forty million new users have joined the region’s 440 million who are already online, 80% of whom are digital consumers, spending their dollars, pesos and ringgits on fashion, food, transportation and games.

Not really surprisingly, the rush for online transactions will only skyrocket. “In 2030, we imagine a scenario where consumers literally live and breathe digital,” said Stephanie Davis, vice president of Google Southeast Asia. “The digital decade in Southeast Asia has arrived. “

The e-Conomy SEA annual report – compiled by Google, Temasek and Bain and Co – estimates that the e-commerce sector could exceed US $ 120 billion in gross value of goods (GMV) by the end of 2021 and reach US $ 234 billion by 2025.

“If you look at the supply, it’s 84%. We think this is a really important signal for the economy as a whole, ”said Davis.

The report sheds light on the internet economy over the next 10 years in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, and looks at trends in five key sectors: commerce electronics, online media, transportation and food, online travel and digital financial services and two emerging sectors – health technologies and electronic technologies.

The title of the report, “Roaring 20s: The SEA Digital Decade,” points to a $ 1 trillion digital economy in the region by 2030.

His conclusion, in three words: Boom, boom, boom.

The SEA e-commerce sector could exceed US $ 120 billion in gross merchandise value (GMV) by the end of 2021 and reach US $ 234 billion by 2025 (Image credit: Andrey Suslov / Getty Images)

About 10-15% of total retail trade is traded online today, and Google predicts that figure will grow to 50% by 2030, thanks to the online healthcare, education and fintech sectors. .

The Covid pandemic has accelerated growth. The confined citizens went online to shop for their clothes, pizza deliveries, and – to a lesser extent – plan trips they could only dream of.

Since the start of the pandemic, the region has added 60 million more digital consumers, including 20 million in the first half of 2021.

And it does not stop there. More than a third of digital merchants, those small B2C-driven businesses, say they would have perished during the Covid pandemic had it not been for the increase in the number of people shopping online. That number reached 43% of digital merchants in Malaysia, where the survival of businesses was closely tied to the severity of the country’s lockdowns.

In turn, the digital rush will increase the demand for tech-savvy talent, the report predicts.

Going forward, digital lending services are expected to grow due to appetite for consumer finance options and supply chain finance.

“Resilience has given way to a resurgence,” said Florian Hoppe, Partner and Head of Digital Practice in Asia-Pacific, Bain & Company.

“The region has garnered tremendous interest from investors over the past two years, and we believe the ‘Roaring Twenties’ will really put Southeast Asia’s internet economy on the global map, as it charts a unique growth path and reshaping all industry sectors in the Region.

Hoppe says the platforms that have fueled this growth have built a solid infrastructure both on the payments side, where it’s mostly electronic and digital, but also on the logistics side. “The battle now is really for depth and loyalty. You can see the game evolve to get more transactions per consumer, thus increasing the depth of the platform. “

Food delivery is the star:

The home food delivery industry grew 33% year-over-year to $ 12 billion in gross merchandise value (GMV). It has now become the most penetrated digital service, with 71% of all internet users ordering meals online at least once.

The Philippines is the country to watch:

Indonesia contributed 40% of the region’s total GMV to the tune of $ 70 billion; while the Philippines has led with an impressive 93% growth to become a $ 17 billion digital economy. “We have seen a huge increase in GMV in the Philippines, as well as a number of other markets like Vietnam and Thailand, which have become theirs and have grown stronger,” Hoppe said.

Grocery deliveries are the big driver.

The grocery industry is expected to soar once cold chain logistics can catch up with demand. “We’re especially excited about online grocery shopping, which has always been under-penetrated,” Davis said.

The game is gaining ground:

Gambling saw a huge increase during the pandemic, the report notes. A new generation of players have entered the game or rediscovered the game during the blockages.

The journey is the slow burner:

While the growth of online travel remains subdued, the e-Conomy SEA report indicates that travel is expected to experience a recovery in the medium to long term, driven by pent-up demand and the gradual easing of restrictions such as vaccinated travel routes. (VTL).

Digital financial services are accelerating:

Contrary to expectations, digital credit has not slowed down during the pandemic. The region’s loan portfolio grew 48% to $ 39 billion. Digital investments have also seen strong growth.


As talent continues to be an unresolved challenge, a set of emerging catalysts that require multilateral solutions between consumers, merchants, platforms and regulators will drive the growth of SEA’s digital economy, according to Google.

These enablers include a commitment to sustainability, robust and user-friendly data regulation, a data infrastructure to support larger and more frequent data flows, and a fair system to protect gig workers and interests. consumers while stimulating innovation.

“Managing this growth in a sustainable manner for the benefit of all stakeholders will be a key mission for all participants in the ecosystem,” said Hoppe.

Featured Image Credit: metamorworks / Getty Images

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