Ecommerce and other sectors such as travel, media and rail services built a thriving internet economy in Southeast Asia.
The sector is on track to exceed 240 billion dollars (US $ 330 billion) in gross merchandise value (GMV) by 2025, according to a report yesterday – $ 40 billion higher than previous estimates.
The region's Internet economy stands at $ 72 billion worth of gross goods. Google and Temasek report covers Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam, and studied online travel, online media, e-commerce hail riding.
He noted that regional growth will be powered by a large Internet users base, especially when affordable smartphones are becoming increasingly available and mobile communications services are growing faster and more reliable. There were more than 350 million Internet users in the six countries in June this year, 90 million more than in 2015.
Indonesia is the largest market in the Internet economy with US $ 27 billion GMV this year expected to be about $ 100 billion by 2025. It also has the largest Internet users base in the region, around $ 150 million.
While Singapore is small, it punches over its weight with an estimated $ 10 billion GMV this year, making it the third largest economy in the region's Internet.
The report noted that new sectors that have emerged with the growing Internet economy include online vacation rental, food supply, subscription music and video on demand.
In the past three years, e-commerce has been the most dynamic sector in the region's economy, with GMV expected to exceed $ 23 billion this year and quadrupled since 2015.
This expansion was driven by e-commerce companies Lazada, Shopee and Tokopedia, which have grown together more than seven times in GMV since 2015.
The second fastest growing segment is online media, which includes advertising, games and music subscription video on demand.
The trip is booming as well, with the rate of travel bookings made online rising from 34 percent in 2015 to 41 percent this year.
"This was driven primarily by a sustained increase in consumer confidence for players such as Agoda, Booking, Expedia and Traveloka, which offer a wide range of flights, hotels, resorts and other travel services," the report said.
"Online travel aggregator give visitors the ability to easily compare and find the best products and prices as well as the convenience check availability and complete the order at once."
Consumer adoption of equestrian services continues to rise, with some 35 million South-East Asians actively using these companies and ordering an average of eight million trips a day. Online food delivery has also grown, with riding-hailing players such as GrabFood online delivery platforms like Foodpanda on the front.
However, the use of digital payments is retarded, said Mr. Rohit Sipahimalani, head of joint investment group at Temasek.
"The adoption of digital payments is growing, but usage remains low because of the lack of acceptable solutions, and the big issue here is also the agreement of traders, and we need big players who are willing to invest to build the ecosystem and one or two dominant to set certain standards."