Southeast Asia may be behind China and India when it comes to growth potential in some sectors, but according to Google’s latest “e-Conomy SEA” report, the region, home to 650 million people, is expected to see its digital economy triple in size and reach $240 billion USD in value by 2025.
The annual study, which is authored by Google and Singapore sovereign fund Temasek, is the most comprehensive research program for tech in Southeast Asia. This latest report raises the estimation for the size of the digital economy in 2025 from an initial $200 billion after seeing the region reach “an inflection point.”
Southeast Asia has 350 million Internet users across its six largest countries and the latest data suggests the Internet economy will reach $72 billion in 2018, up from $50 billion in 2017 and $19.1 billion in 2015.
The four biggest revenue areas currently (and expected to be maintained in 2025):
• Online travel $30 billion USD per year
• E-commerce $23 billion USD per year
• Online media $11 billion USD per year
• Ride-hailing $8 billion USD per year
Indonesia, the world’s fourth largest country by population, is forecast to hit $100 billion by 2025, ahead of Thailand at $43 billion USD and Vietnam at $33 billion USD with strong growth forecast across the board.
Indonesia and Vietnam have seen their digital economies more than triple since 2015 are expected to continue, along with Thailand to grow dynamically. By 2025 the digital revenue for the three countries is expected to be:
• Indonesia $100 billion USD
• Thailand $ 43 billion USD
• Vietnam $ 30 billion USD
This year’s report includes more detail on ride hailing and food delivery services and highlights Southeast Asia’s largest companies, Grab and Go-Jek.
The report also discusses the region’s largest companies that dominate the funding landscape. Every edition of the report has stressed that the growth forecasts are contingent on requisite levels of funding, boosting the Southeast Asian startup ecosystem as a whole, so the fact that most capital is going to a few very big players is a concern.
However, the report does show there has been progress from the rest of the field, with non-unicorn funding in the first half of 2018 reaching more than the total for the whole of 2017.
You can read the full “Third annual e-Conomy SEA” report here.