Greater than 75% of individuals in 6 Southeast Asian nations now have web entry, the report mentioned.
Gojek drivers wait for passengers in Indonesia.
Afif c. kusuma | iStock editorial team | Getty Images
SINGAPORE – According to a new report from Google, Temasek Holdings and Bain & Company, more than 75% of the population in six major Southeast Asian countries have internet access and the majority of them have shopped online at least once.
Up to 40 million people in Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Thailand went online for the first time this year, according to the report released on Wednesday.
As a result, the number of Internet users in these six countries rose to over 440 million people, 80% of whom have shopped online at least once, the report said.
The report did not look at the population of all Southeast Asian countries and left out ASEAN members Brunei, Cambodia, Laos and Myanmar, and East Timor and Papua New Guinea.
The coronavirus pandemic has seen a surge in digital services such as e-commerce, grocery and grocery delivery, and online payments. More than 60 million people in the region used digital services for the first time due to Covid-19 – and 20 million of them did so in the first half of 2021, according to the report, which is in its sixth year.
Towards a $ 1 trillion internet economy
Most internet sectors in Southeast Asia have been resilient to the negative effects of the pandemic, including months of tough lockdowns that affected businesses and employment around the world.
As the number of people vaccinated against Covid rises, countries have slowly eased restrictions this year to get their economies back on track.
The report forecast that the internet sector in these six Southeast Asian countries could reach gross product value (GMV) of $ 174 billion in 2021 – a 49% year-over-year increase, with e-commerce accounting for most of the growth. GMV is a metric most commonly used in e-commerce that measures the total value of goods sold over a period of time.
In addition to e-commerce, online financial services are also growing in the region, according to the report, as digital payments and e-wallets become increasingly important. The gross transaction value for digital payments in these six countries is projected to be $ 707 billion this year, 9% more than last year.
E-commerce is expected to remain the largest segment of the internet economy through 2025 and beyond, according to Stephanie Davis, vice president of Southeast Asia at Google.
“But we’re also seeing really robust growth in the other categories,” Davis told CNBC’s Street Signs Asia on Wednesday. “We are expecting a comeback of the transport industry, we see the food delivery in the region as strong.”
The subdued travel segment – which has taken a hit due to the pandemic – is set to pick up again from next year and return to strong growth by 2025, she added.
All six countries will see double-digit growth this year compared to 2020.
The Philippines leads by a wide margin and will see GMV grow 93% from $ 9 billion in 2020 to $ 17 billion in 2021, the report shows.
Overall, the internet economy in the six countries is projected to exceed $ 360 billion by 2025. It could reach between $ 700 billion and $ 1 trillion by 2030 if online shopping becomes the norm, the report said.
A blooming deal landscape
More and more investors are pouring into Southeast Asia’s internet economy, particularly in sectors such as e-commerce and online financial services.
“The world is flooded with liquidity and people are looking for growth opportunities in a world environment with zero interest rates,” Rohit Sipahimalani, chief investment strategist of Singapore state investor Temasek, told CNBC’s Street Signs Asia on Wednesday.
“Other than that, people were really impressed with the resilience of [the region’s internet] Sector during Covid, “he said, adding that in the past it was mostly private capital that financed companies operating in the area.
“This year, for the first time, we see that many of these companies are able to enter the public markets,” he said.