Southeast Asia's digital economy to triple to $240 billion by 2025: Google research

Representative image. Photograph:( Zee News Network )

WION Web Team New Delhi, Delhi, India Nov 19, 2018, 01.31 PM (IST)

Internet giant Google published its third annual 'e-Conomy: SEA 2018' report, co-authored with Singapore state investment firm, Temasek, on Monday in which it has forecast Southeast Asia's digital economy triple in size and reach $240 billion by 2025.

According to the report, Southeast Asia's online economy reached $72 billion in value this year and is projected to triple to $240 billion by 2025 -- 20 per cent higher than the $200 billion which Google and Temasek had estimated in their 2016 and 2017 report.

The growth of the internet economy is predicted by analysing four categories, online travel, e-commerce, online media and ride-hailing. It has covered Southeast Asia's largest economies -- Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.

"Simply put, Southeast Asia’s internet economy hit an inflection point in 2018. Powered by the most engaged mobile internet users in the world, industries like e-commerce, online media, online travel, and ride-hailing grew at an unprecedented rate. Investors have taken notice, pouring record amounts of funds into the region — now it’s time for everyone else to pay attention," the study read.

"The record-breaking pace of the region’s internet economy in 2018 wasn’t a freak occurrence. Southeast Asian countries are on a solid foundation for accelerated digital growth."

The study also stated that the internet sector of Southeast Asia has "generated value surpassing the gross domestic product (GDP) of more than 100 countries in the world in just three years."

The research further credited e-commerce companies like, Alibaba Group Holding Ltd's Lazada, Sea Ltd's Shopee, and Indonesia's Tokopedia, for helping develop the sector.
 
Here are the key highlights from the study.

350 million internet users are living in the region. Since 2015, more than three million Southeast Asians, a population bigger than Chicago’s or Madrid’s, have gone online for the first time every month.

35 million Southeast Asians use ride-hailing services every month. Eight million rides are taken every day across 500 cities. Local unicorns (privately held startup companies value at over $1 billion) like GO-JEK and Grab are spurring rapid growth in new services like food delivery, which made up a $2 billion industry in 2018

$24 billion has been raised by Southeast Asian tech companies since 2015 and investor confidence is growing. The $9.1 billion raised in the first half of 2018 is on par with the $9.4 billion in the whole of 2017. Investor confidence extends to smaller startups, with investments in non-unicorns growing four times in the first half of the 2018 year on year.

1.7 million full-time jobs will be created in the internet economy by 2025 for highly-skilled professionals as well as flexible work opportunities in sectors like ride-hailing.

The research further noted that the growth is being boosted by the world's most engaged internet users of whom 90% connect through their smartphones; and the increasing availability of affordable smartphones, faster and cheaper internet is services are also giving a boost to the growth.  

"There are more than 350 million internet users across Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam in June 2018 — 90 million more than in 2015. Also, with more than 90% of Southeast Asians connecting to the internet primarily through their smartphones, this is one of the most mobile-first internet regions globally," research reads.

Digital economy refers to an economy that is based on digital computing technologies, although this increasingly perceives as conducting business through markets based on the internet and the World Wide Web. The digital economy is also sometimes called the Internet Economy, New Economy, or Web Economy.