Transcript Southeast Asia digital economy 2025

Southeast Asia digital
economy Report shows
that the digital market of
Southeast Asia is estimated
to grow to more than US$
200 billion by
2025, multiplied by more
than 6 from US$ 31 billion in
2015.
Google and Temasek, a
Singaporean stateowned investment
company, have recently
collaborated together
to produce this report on
the digital economy of
Southeast Asia and its
evolution to 2025.
Proprietary
Google
Data
Secondary
Data
Sources
Data
Source
Expert
Interviews
Temasek
Research
Research Scope:
Sectors
Geographies
First-Hand
eCommerce
Indonesia
Travel
Singapore
Media
Malaysia
Philippines
Thailand
Vietnam
1. SEA –Fastest growing
internet region (14% 5year CAGR) with an
existing internet user base
of 260m growing to 480m
users by 2020.
2. Consequently, the SEA
internet economy is going
to grow to $200+ billion
by 2025; driven mostly by
the growth of first hand ecommerce market (32%
CAGR over next 10 years)
followed by online media
(18% CAGR) and online
travel (15% CAGR).
3. First hand ecommerce
market is going to
outpace the growth of
offline retail market (32%
v/s 7% 10year CAGR) with
potential of reaching a
rapid $88+ billion mark
compared to a sluggish
potential of reaching
$120 billion in the retail
offline sector.
Lack of big-box
retail; access
particularly
difficult in
remote islands.
A burgeoning
youth
population with
70% under the
age of 40.
Rapidly growing
middle class to
grow by 5.3%
over the next 10
years.
Growth Driving Factors
Unique to SEA
Growth Driving
Areas:
•SEA
can be a $200bn
internet economy with
$40-50bn of additional
investments over the
next 10 years (SEA
GDP grows at 5.3%
CAGR).
Number of Transactions (27% 10-year CAGR)
Online Travel: to reach $90bn by 2025 (15% CAGR)
Hotel + Airlines: Compose 85% of total online travel
market (15% CAGR)
Carriers: Majority driver of growth in SEA (35% of gross
booking) and higher online penetration (55% for
regional carriers)
Online rides: (Uber, Grab) should reach $13bn
(18%CAGR). Active riders to reach 29mn.
Online media: (ads and gaming) will contribute to
$20bn by 2025 (10% of total GMV).
Report Overview:

SEA ready to take off with 124k users coming online
everyday for the next 5years.

260M users already online on the 4th largest internet
market in the World.

3.8M users coming online every month with SEA being
the fastest growing internet market in the World.

With 700 M mobile connections the SEA has mobile
phones that are 130% of the total population there.

With Indonesia being the fastest growing nation in the
World, SEA is going t have the fastest growing internet
market (480M users by 2020).

ASEAN is going to equal the growth in internet users
growth with India over 2015-20 (14% CAGR).

Thailand (9% CAGR 2015-20), Singapore (3% CAGR
2015-20), Indonesia (19% CAGR 2015-20), Vietnam
(13% CAGR 2015-20), Philippines (11% CAGR 2015-20)
and Malaysia (5% CAGR 2015-20).
Ecommerce and Travel to make >90% of total online
retail spend.
First hand goods.
Second hand goods.

5 key systemic
changes required:

Thriving Young Population: 70% of SEA
population is under the age of 40(vs. 57% in
China).

Increase n Internet speed and penetration:
Internet speeds in SEA are expected to reach
global average (23.3 mbps) with more than
80% of the population

GDP Growth: SEA as a region has a nominal
GDP of about $2.5trillion USD(larger than
India) growing at 5.3% over the next 10
years.

More Conducive Payment Ecosystem: Payment
Ecosystem is expected to accelerate with
increased access to financial system, going
from 0.7 acct/capita +1 acct/capita.

Lack of store access: Organized retail store
available per capita is significantly less than
developed markets.