60 million new digital consumers have been added to the Southeast Asian Internet (SEA) economy since Covid-19 began, with 20 million people added in the first half of this year.
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 of the previous forecast of $ 300 billion.
The region is also on track to become a US $ 1 trillion digital economy by 2030.
Support is seen from a rapidly growing consumer and digital retailer base, and an acceleration in e-commerce and food delivery.
The region has reached 440 million Internet users
By 2021 alone, SEA is estimated to reach $ 174 billion in gross commodity value (GMV).
The region now has more than 440 million Internet users. “Catalyzed by the pandemic, existing digital consumers ventured even further into online services and began buying services in four new sectors since the outbreak began. Existing users also rely more on digital services and spend more on most verticals, ”the report says.
He also revealed that more SMEs are turning to digital platforms to survive the pandemic.
“Digital financial services emerged as critical facilitators, with more than 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 purchases and supply sales will come from online sources, ”he said.
Among SEA Internet users, eight out of 10 are digital consumers. Penetration is strongest in Singapore among other SEA nations, with 97 per cent of internet users having at least made online purchases.
Thailand and Malaysia are the next two countries with the most Internet users making at least one online purchase compared to other neighbors, with 90% and 81%, respectively.
Food delivery drives growth, while e-commerce continues to support
The food delivery sector emerged as a bright spot, with year-on-year growth of 33% 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.
Meanwhile, e-commerce continues to strengthen at its own pace. It is expected to boost the SEA Internet economy in the next decade, Google, Temasek and Bain & Company said.
“In a sharp advance to 2030, GMV e-commerce could surpass $ 120 billion by the end of 2021 (almost a doubling from 2020) with the potential to reach $ 234 billion by 2025.”
Resurgence 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 rose to $ 11.5 billion during the first half of the year, surpassing $ 11.6 billion for the whole of 2020.
“Investors see SEA as a long-term lucrative investment destination, especially in sectors such as e-commerce and digital financial services, which continue to attract most investments,” the report says.
He also noted that more technology companies are exploring initial public offerings (IPOs) as viable avenues to raise capital or allow early investors to monetize their holdings, especially given strong valuations and new listing approaches, such as special purpose acquisition companies (SPAC).
In recent months, technology companies such as travel giant Grab, Property Guru have announced mergers with SPAC with plans to trade in the US in the coming months.
“We think this is just the beginning, I would expect to see many more local listings of these unicorns or foreign listings in the US over the next 12 to 18 months,” said Rohit Sipahimalani, chief investment strategist; head, Southeast Asia, at Temasek.
Online travel is expected to increase, games to increase
While the growth of online travel remains muted, a recovery is likely to be seen in the medium to medium term.
long-term, driven by accumulated demand and the progress of vaccination.
The report also noted that online media witnessed healthy growth of 32 percent to US $ 22 billion in 2021. In particular, Covid-19 introduced a new generation of players, which led to them a willingness to spend.
Featured Image Credit: Roads.sg, Mothership
