Southeast Asia's internet economy is slated to be worth US$1 trillion by 2030

Making the move online.

Nov. 11, 2021

Southeast Asia's internet economy is slated to be worth US$1 trillion by 2030

It's no secret that the COVID-19 pandemic has forced the majority of us to stay home, whether we like it or not.

And in our efforts to steer clear of COVID-19 infection, our time spent at home has completely transformed the way we live our lives. Most of us have developed new habits in our daily routines that rely heavily on the internet.

After all, what else is there to do at home these days?

No where has this mass shift to the internet been more prevalent than Southeast Asia, where tens of millions of people have fully embraced a digital lifestyle, including online shopping as well as food delivery.

US$1 trillion by 2030.

According to a joint report by Google, Singapore state investor Temasek Holdings, and global business consultants Bain & Company, Southeast Asia welcomed 60 million new internet users since the beginning of the COVID-19 pandemic. This takes the regional internet population to a new high of 440 million people.

IMAGE: CMG / Business Times

Covering countries like Indonesia, Thailand, Vietnam, Singapore, Malaysia, and the Philippines (and excluding the rest of Southeast Asia), the report found that 80 percent of the region's total internet population made at least one online purchase during the pandemic.

It's no surprise, considering the fact that more and more people are choosing to go online as opposed to interacting with actual human beings in person. It's convenient, and at times, more economical to do it online.

And because of Southeast Asia's relatively young population (compared to North America and Europe), the chances of coming across a tech-savvy person is much higher in this region. It's also the younger population that experts believe are the driving force behind a surge in internet usage, even encouraging the older people in their surroundings to do the same.

IMAGE: Reuters / South China Morning Post

By the end of 2021, Southeast Asia's gross merchandise volume (GMV) – the amount of goods sold via customer-to-customer or ecommerce platforms – is expected to hit roughly US$174 billion. By 2025, that figure is estimated to hit US$360 billion, and by 2030, a staggering US$1 trillion.

When looking at ecommerce GMV specifically, numbers are expected to double to US$120 billion by the end of this year, and reach US$234 billion by the year 2025.

Indonesia as a major player; the Philippines going for growth.

IMAGE: World Economic Forum

While all the Southeast Asian countries studied in the report doled out double-digit figures in terms of growth in 2021, Indonesia contributed the largest chunk at 40 percent.

Of course, this can also be attributed to Indonesia's large population, being the largest in the region and fourth-largest in the world.

Blazing their own trail is the Philippines, which recorded a growth of 93 percent, transforming it into a US$17 billion digital economy.

"GMV (for Southeast Asia) has increased 49 percent year-on-year, as seismic consumer and ecosystem shifts accelerated by COVID continue to drive a massive digital adoption spurt," says Florian Hoppe, Bain's Asia-Pacific Head of Digital Practice.