The region’s internet economy is growing faster than expected, with a new saying it will reach $360 billion by 2025, an upward revision from the previous $300 billion forecast.
The digital economy will play a bigger role in the region’s future than previously expected, and as more people are turning to the internet to meet their everyday needs, this is opening up new possibilities for consumers across the region, Google, Temasek and Bain & Company said in a new report published on Wednesday.
According to the «e-Conomy SEA» report 2021, titled «Roaring 20’s: The SEA Digital Decade,» 60 million new digital consumers have been added since the pandemic began, with 20 million of them added in H1 2021.
The region now has more than 440 million internet users, with about 80 percent of them, or 350 million people, being digital consumers.
Defining the Future of Technology
While e-commerce is leading the digital economy, health, education and financial technology are sectors that are growing faster because of COVID-19, and are expected to become a significant part of the digital economy by 2030.
Google said the region’s digital economy is estimated to reach $174 billion in gross merchandise value by the end of 2021, and this figure can reach $1 trillion by 2030.
«Growth on that scale would see Southeast Asia help define the future of technology globally,» Stephanie Davis, Vice President, Google Southeast Asia, said in a blog post.
Digital Finance Grows
The report noted «healthy growth» in digital financial services, specifically in the adoption of e-wallets and A2A (account-to-account), fuelled by both merchant adoption and consumer usage.
By 2025, digital payments are forecasted to reach over $1.1 trillion in gross transaction value, up from a forecast of $707 billion in 2021. Digital lending is also expected to grow by 50 percent in outstanding balance from $26 billion in 2020 to $39 billion in 2021, led by a rebound in lending appetite and growth in usage of buy-now-pay-later services.
New Highs for Funding
The digital resurgence has prompted renewed investor interest in tech startups. Some $11.5 billion was invested during the first half of 2021, with 11 consumer technology unicorns added in 2021, taking the total to 23.