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E-commerce, food delivery to bring SEA’s e-economy to US$360B by 2025

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 helping the region’s internet economy reach $ 360 billion by 2025, Google, Temasek and Bain & Company said in the sixth edition of the e-Conomy SEA report. The target is an upward revision from the previous forecast of US $ 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 consumers and digital merchants, and an acceleration in e-commerce and food delivery.

The region reached 440 million internet users

By 2021 alone, the SEA is expected to reach US $ 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 started purchasing services in four new verticals since the outbreak began. Existing users are also relying more on digital services and spending more in most verticals, ”the report says.

Image Credit: Google, Temasek, Bain & Company

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

“Digital financial services have become critical enablers, with over 90% of digital merchants now accepting payments digitally. Over the next five years, eight in ten of these merchants predict that more than half of their purchases and sales of supplies will come from online sources, ”he said.

Eight in ten SEA Internet users are digital consumers. Penetration is highest in Singapore among other SEA countries, with 97% of internet users having made at least one purchase online.

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

Image Credit: Google, Temasek, Bain & Company

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

The food delivery industry turned out to be a bright spot, growing 33% year-on-year to 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 at its own pace. According to Google, Temasek, and Bain & Company, it is expected to propel SEA’s internet economy over the next decade.

“With a solid outlook to 2030, e-commerce GMV could exceed US $ 120 billion by the end of 2021 (a near doubling from 2020) with the potential to reach US $ 234 billion by 2025. “

Image Credit: Google, Temasek, Bain & Company

Resurgence of funding and IPOs

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

The transaction value reached US $ 11.5 billion in the first half of the year, surpassing US $ 11.6 billion for the whole of 2020.

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

He also noted that more and more tech companies are exploring Initial Public Offerings (IPOs) as viable avenues for raising capital or allowing early investors to monetize their holdings, especially given the strong valuations and new approaches. such as special purpose acquisition companies (SPAC).

Image Credit: Google, Temasek, Bain & Company

In recent months, tech companies like Grab transit giant Property Guru have announced mergers with PSPCs with plans to list in the United States in the coming months.

“We think this is just the beginning, I would expect to see a lot more local listings of these unicorns or foreign listings in the United States over the next 12-18 months,” Rohit Sipahimalani said. , chief investment strategist; chef, Southeast Asia, in Temasek.

Online travel set to pick up, gaming on the rise

Although the growth of online travel remains moderate, it is expected to see a recovery to medium and
long term, driven by pent-up demand and advances in immunization.

The report also noted that online media saw healthy growth of 32% to reach US $ 22 billion in 2021. In particular, Covid-19 has ushered in a new generation of gamers, bringing with them a willingness to spend.

Featured Image Credit:, Mothership

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