World Economy

Southeast Asia Internet Economy to Reach $50b

Southeast Asia Internet Economy to Reach $50bSoutheast Asia Internet Economy to Reach $50b

Digital businesses can’t afford to ignore Southeast Asia, according to a new report by Google and Singaporean state investment vehicle Temasek.

Home to fast-growing economies such as Indonesia and the Philippines, Southeast Asia boasts a massive internet user base that’s overwhelmingly focused on mobile. That will push the region’s internet economy to hit $50 billion this year and $200 billion by 2025, growing from 2% of regional gross domestic product to 6% by 2025, the report said, CNBC reported.

“Users in Southeast Asia are incredibly engaged, spending an average of 3.6 hours per day on mobile internet, more than in any other region in the world ... These incredible levels of engagement have led to a sizable market opportunity.”

Focusing on e-commerce, ride hailing and overall venture capital investments, the report highlighted just how explosive Southeast Asia’s Internet economy is.

E-commerce sales of first-hand goods will reach $10.9 billion in gross merchandise value this year, up from $5.5 billion in 2015, the report found. Momentum is chiefly driven by mobile-first marketplaces such as Lazada and Tokopedia, where small and medium businesses sell to consumers.

Ride hailing services are expected to hit $5.1 billion in gross merchandise value this year, more than double from $2.5 billion in 2015, and could reach $20.1 billion in 2025, the report said.

Players such as Grab and Go-Jek have also expanded their offerings beyond consumer transportation to focus on payments and lifestyle services, increasing their attraction to customers, the report said.

Between 2016 and the third quarter of this year, Southeast Asian internet companies raised more than $12 billion of capital, up from $1 billion in 2015, the report stated.


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