SINGAPORE (Oct 3): Singapore’s e-commerce is set to triple in value to US$7 billion ($9.7 billion) in just six years, in parallel with rapid growth across Southeast Asia that will see the total internet economy in the region reach a whopping US$300 billion by 2025.
This is according to the e-Conomy Southeast Asia report 2019, released on Thursday by Google, Temasek, and Bain & Company.
The report forecasts that the gross merchandise value (GMV) of Singapore’s internet economy will be worth US$27 billion by 2025, which is more than double the US$13 billion GMV expected this year. In addition to e-commerce, online travel, ride-hailing, and food delivery services are expected to make up the bulk of that growth trajectory.
The same is seen across Southeast Asia, with the region’s internet economy seeing a 39% increase to US$100 billion today, up from US$72 billion last year. Of this total, e-commerce accounts for US$38 billion, ride-hailing accounts for US$12.7 billion, online media such as advertising, gaming and subscriptions account for US$14.2 billion, and online travel bookings account for US$34.4 billion.
The report also highlighted that e-commerce will be the largest sector driving this surge in online spending, with the total regional GMV of e-commerce to reach US$150 billion by 2025. The second-largest sector contributing to the internet economy will be online travel, they predict, with the total GMV reaching US$78 billion by 2025.
More significantly, digital payments are expected to cross the US$1 trillion mark by 2025, which will mean that one in every two dollars spent will be done digitally. Within digital payments, e-wallets is predicted to grow fivefold to US$114 billion by 2025 from just over US$22 billion in 2019.
The report noted that the booming internet sectors in the region are indicators of fundamental changes in the way people shop, eat and get around. However, as the ecosystem matures, internet economy companies have to compete for user engagement.
“To do so, they are offering a variety of products and expanding into new services including gamified promotions, enticing streaming content, live news and more. Consumers are benefiting from these trends, as they have access to more choices and lower prices,” the report stated.
The report also highlighted that while the region has made progress in overcoming the initial challenges of the internet economy, talent constraints remains a pressing concern, as companies look for skilled workers to take on the influx of new roles created in the digital economy.
Stephanie Davis, managing director of Google Southeast Asia, said that while the region has seen unprecedented growth, more remains to be done.
“Whether it’s providing support for small businesses to grow, teaching Southeast Asians digital skills, expanding internet access to more people or advocating for smart policy and regulation, we are looking forward to helping bring benefits of technology to millions more people across this dynamic region,” she said.
