Singapore’s internet economy is expected to grow 35%, from US $ 11 billion in 2020 to US $ 15 billion this year.
By 2025, it is expected to reach $ 27 billion, Google, Temasek and Bain & Company said in the sixth edition of the e-Conomy SEA report released today (November 10).
Two-thirds of the improvements in the growth of the value of goods (GMV) come from e-commerce. The segment grew 106% from a year ago, with e-commerce demonstrating significant innovation in e-grocery shopping.
Overall, Singapore has the highest proportion of digital consumers out of all internet users in Southeast Asia, at 97%. The region’s average is 80 percent. Singapore’s digital merchants are also more inclined to deepen their use of digital services.
Takeover in sight for a larger economy
The report also showed that pre-pandemic users have consumed an average of 2.9 times more services since the onset of Covid-19.
There is also a rigidity among digital users coming back for more, with 99% of users intending to continue using digital services in the future.
Digital financial services also remained at the forefront, with four digibank licenses awarded by the Monetary Authority of Singapore (MAS) and significant investments in financial market infrastructure.
The report notes that travel demand is showing early signs of recovery, as evidenced by a 28% increase, from US $ 1.8 billion in 2020 to US $ 2.3 billion in 2021. The improvement has was stimulated by the gradual relaxation of restrictions through programs such as Vaccinated Travel Voies (VTL).
“The day Singapore announced VTLs with Germany and Brunei, search trends for Germany jumped 700%,” the report notes.
Digital merchants rely heavily on internet sales
In Singapore, 38% of digital merchants believe they would not have survived the pandemic without digital platforms.
“While digital merchants use an average of two digital platforms, profitability remains a major concern. Digital financial services are also becoming essential enablers, with 89% of digital merchants now accepting digital payments, ”the report says.
Meanwhile, 37% of digital merchants are now adopting digital lending solutions.
Many are also adopting digital tools to engage with their customers, with 43% expecting to increase the use of digital marketing tools over the next five years.
Funding here continues to reach new heights
Transaction activity rebounded strongly in Singapore in the first half of 2021 and is poised to overtake the activity of recent years.
This is when investors get used to the “new normal” of trading, via digital channels and meetings.
The report notes that Singapore added the most new unicorns this year and continues to be an attractive hub for the regional digital economy.
“The appetite for investment remains strong in digital services that have increased in the wake of Covid-19, such as e-commerce, e-commerce enablers and FinTechs,” he noted.
Singapore, a full-fledged player in the provision of SEA funds
In terms of investor interest, a recovery is seen as the deal’s value in the region reached US $ 4.3 billion in the first half of 2021. This is due to interest in acquisition companies Special Purpose (SPAC) and the government’s focus on making Singapore the registration destination of choice. .
Florian Hoppe, Partner and Head of Digital Practice, Asia-Pacific, at Bain & Company, said Singapore’s internet economy demonstrates “long-term resilience and has emerged stronger after a contraction in 2020.”
“As we foresee huge room for growth in the coming digital decade, Singapore must lead and chart growth paths as a leader in digital innovation for the region,” he said.
The continued growth of the Internet economy has given rise to a new set of opportunities in Southeast Asia, and Singapore is “well positioned to be a role model for Southeast Asian countries in preparing for its future.” talents, SMEs and start-ups for the digital decade. “added Stephanie Davis, vice president of Google Southeast Asia.
According to Rohit Sipahimalani, chief investment strategist, the Republic will continue to play a vital role in the growth of the region’s internet economy, as a technology hub and gateway for funding and talent; leader of Southeast Asia, in Temasek.
This is seen through the efforts of the public and private sectors to foster innovation, build infrastructure and develop talent, he said.
Featured Image Credit: Ninja Van
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