E-commerce, food delivery to bring SEA’s e-economy to 360 billion dollars by 2025


As many as 60 million new digital consumers have been added to the Southeast Asian (SEA) internet economy since the start of Covid-19, with 20 million people added in the first half of this year.

The growth is supporting the region’s internet economy to reach $ 360 billion by 2025, Google, Temasek and Bain & Company said in the sixth edition of the e-Conomy SEA report. The goal is an upward revision from the previous forecast of $ 300 billion.

The region is also on track to become a $ 1 trillion digital economy by 2030.

Support is seen from a rapidly growing base of digital consumers and merchants and an acceleration in ecommerce and food delivery.

The region has reached 440 million internet users

For 2021 alone, SEA is estimated to reach $ 174 billion in gross goods value (GMV).

The region now has more than 440 million internet users. “Catalyzed by the pandemic, existing digital consumers have ventured further into online services and have begun purchasing services in four new verticals since the outbreak began. Existing users are also relying more on digital services and spending more on most verticals, “the report reads.

Image credit: Google, Temasek, Bain & Company

It also revealed that more and more SMEs are turning to digital platforms to survive the pandemic.

“Digital financial services have emerged as critical enablers, with over 90% of digital merchants now accepting digital payments. Over the next five years, eight out of 10 of these merchants expect more than half of their supplies purchases and sales to come from online sources, “he said.

Eight out of 10 of SEA’s internet users are digital consumers. Penetration is strongest in Singapore among other SEA nations, with 97 percent of Internet users having made at least one online purchase.

Thailand and Malaysia are the next two countries with more internet users making at least one online purchase than other neighbors, by 90% and 81% respectively.

Image credit: Google, Temasek, Bain & Company

Food delivery drives growth, while e-commerce continues to support

The food delivery industry has emerged as a bright spot, growing 33% year-on-year to reach US $ 12 billion in GMV.

It has now become the most penetrated digital service, with 71% of all internet users ordering meals online at least once.

Image credit: Google, Temasek, Bain & Company

Meanwhile, e-commerce continues to strengthen in its pace. SEA’s internet economy is expected to push forward over the next decade, said Google, Temasek and Bain & Company.

“In a strong advance to 2030, GMV e-commerce could exceed $ 120 billion by the end of 2021 (almost double from 2020) with the potential to reach $ 234 billion by 2025.”

Image credit: Google, Temasek, Bain & Company

Resumption of funding and IPO

Investments in SEA’s Internet economy are expected to reach an all-time high in 2021.

The value of the deal reached $ 11.5 billion in the first half of the year, exceeding $ 11.6 billion for the whole of 2020.

“Investors see SEA as a profitable long-term investment destination, especially in sectors such as e-commerce and digital financial services, which continue to attract the majority of investments,” the report said.

It also noted that more tech companies are exploring initial public offerings as viable routes to raise capital or allow early investors to monetize their holdings, especially in view of strong valuations and new listing approaches such as special purpose acquisition companies ( SPAC).

Image credit: Google, Temasek, Bain & Company

In recent months, tech companies have enjoyed the ride-haling giant to dig Other property guru announced mergers with SPAC and their plans for US listing in the coming months.

“We think this is just the beginning, I would expect to see many more local lists of these unicorns or foreign lists in the US in the next 12-18 months,” said Rohit Sipahimalani, chief investment strategist; Cape of Southeast Asia, in Temasek.

Online travel should increase, games on the rise

While growth in online travel remains subdued, there is likely to be a recovery in the medium to long term, driven by pent-up demand and advances in vaccinations.

The report also noted that online media has seen healthy growth of 32% to $ 22 billion in 2021. Notably, Covid-19 has ushered in a new generation of gamers, bringing with it the willingness to spend.

Featured Image Credit: Roads.sg, Mothership

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