Southeast Asia Internet Economy To Excedd $240b By 2025

Doris Richards
November 21, 2018

Investments in nascent sectors of the internet economy not yet covered in the e-Conomy SEA research from a monetization standpoint, including Education, Fintech, Healthcare, and others, added up to $3 billion since 2016.

The report predicted that online food delivery would be the "next battleground" for ride-hailing players aiming to become "super apps", adding that companies like Grab and Go-Jek were leveraging their well-known brand names and larger user bases against food delivery companies like Deliveroo and Foodpanda.

Despite being only second to Indonesia in terms of number of internet users in Southeast Asia (SEA), the Philippines' internet economy is the smallest among the 6 SEA nations in Google's latest SEA internet economy study.

The report estimated that the GMV of the competitive ride hailing sector, with the addition of online food delivery, has reached US$7.7 billion this year.

These Southeast Asian technology companies were part of a community that raised US$24 billion since 2015, with US$9.1 billion secured in the first half of 2018-compared to US$9.4 billion raised in the whole of 2017.

Google has begun looking beyond India to Southeast Asia for its "next billion" users.

It estimated that the gross merchandise value (GMV) of the region's internet economy has reached United States dollars 72 billion in 2018, rising 37 percent from the year earlier.

Online shopping has been the fastest-growing sector of the Internet economy, reaching US$23 billion this year, according to the report.

The report says that nearly 90 per cent of people in the region connect to the internet via smartphone, describing them as the "world's most engaged internet users".

The Indonesian internet economy is forecast to grow to USD 100 billion by 2025, accounting for USD 4 of every USD 10 spent in the region, the report said.

The three largest ecommerce companies in the region - Lazada, Shopee and Tokopedia - have played a critical role in the development of the sector.

Indonesia, the largest digital economy in the region, will continue its growth, also quadrupling from $27 billion in 2018 to a massive $100 billion in 2025 - more than double the next largest in the list, Thailand and its expected $43 billion internet economy in 2025. The 2018 report is the third edition with previous editions being released in 2017 and 2016, respectively.

Online travel among these countries dominates the majority of the revenue share, almost $30 billion, followed by e-commerce $23 billion, online media $11 billion and ride-hailing $8 billion.

The internet economy in Southeast Asia has also experienced dramatic growth in fundraising over the past four years.

Singapore and Indonesia emerged as investors favorite destination as companies headquartered in these countries attracted the vast majority of the funding in the tune of US$16 billion and US$6 billion since 2015. In 2018, the trend continued in an exponential fashion with US$9.1 billion being raised within the first half of the year alone.

The Philippines also has the lowest adoption of digital payment services in the region at 21%, with only only one in five internet users in the Philippines using these services.

Unicorns are companies valued at over US$1 billion (S$1.37 billion, RM4.19 billion), while decacorns are worth over US$10 billion.

Other reports by Iphone Fresh

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