This article summarizes an episode of Analyse Podcast’s video series featuring Sapna Chadha from Google, Florian Hoppe from Bain & Company, and Cassie Wu from Temasek.
Image credit: Timmy Loen
Southeast Asia’s tech economy has grown more than expected. Despite global headwinds like inflation and tariffs, the region remained resilient and is expected to hit US$300 billion in gross merchandise value (GMV), based on the latest report by Google, Temasek, and Bain & Company.
The region is rewriting its own story
The region has moved beyond adopting technology to creating a unique ecosystem that challenges the world’s perception of what a developing market can achieve.
Early goals seemed impossible
When Google and Temasek released the first e-Conomy SEA report in 2016, global observers viewed the region’s targets with deep doubt.
Sapna Chadha, VP of Google, recalls the reaction, “We set this audacious goal of US$200 billion by 2025. People told us we were crazy. In 2016, when we put that ambition out there, we’ve actually reached 1.5x that, and we’ve hit US$300 billion.”
Profitability is now the main story
For years, the focus was entirely on GMV. However, healthy markets depend on how revenue scales compared to that transaction volume.
Chadha says, “Revenue has now, it’s grown 11x in this last decade… and it’s grown faster than GMV, which is what we want to see.”
Retail media is booming
A key driver of this new profitability is advertising. Platforms are building their own ad networks to monetize their traffic.
Chadha observes, “You don’t hear everyone around the world talking about retail media networks the way you will hear people in Southeast Asia talking about them… And the report shows 10x growth in retail media network volume.”
Indonesia drives much of this success as the region’s largest economy
Florian Hoppe, partner at Bain & Company, points out, “Indonesia’s e-commerce [market] still is larger or about the same size as all of India’s e-commerce [market]. And yet the attention tends to be a little bit veering away from Southeast Asia. But this is actually a real economic powerhouse.”
Cash is no longer king
Payment habits have changed drastically in the last decade. The region has successfully overcome the reliance on cash, which used to be the biggest problem for online shopping.
The payment landscape has flipped
Chadha from Google explains, “When we started this report, 60% of digital payments was cash. And now… that has inverted, 60% are digital.”
QR codes standardized the region
This rapid shift wasn’t driven by credit cards, but by a region-wide embrace of QR technology.
Video commerce is the new standard
The economics of AI are changing
Stay updated on the go with our mobile app.
Get latest insights with smoother, more personalized experience through TIA mobile app.
