Ecommerce, ride-hailing fastest-growing sectors in SEA, Indonesia

Earlier this month, Google, Temasek, and consulting firm Bain & Company released the fourth edition of the e-Conomy SEA 2019 report. This year’s edition features five key sectors: digital financial services, ecommerce, ride-hailing, online media, and online travel.

Photo credit: Ben Nuttall

KrAsia recently interviewed Randy Jusuf, the managing director for Google Indonesia, to discuss the 2019 report.

What is new in the 2019 edition of e-Conomy SEA?

This year, the report is a collaboration between Google, Temasek, and Bain & Company, which helped conduct deep analysis for the report. We included a new sector, namely digital financial services. The adoption of digital payments has finally reached the inflection point and is expected to cross US$1 trillion by 2025.

We also compared the growth of the internet economy between metropolitan areas and non-metropolitan areas. Metros represented more than 50% of the internet economy in 2019. However, there are also growth opportunities outside of metros.

How do you view the growth opportunities for metros compared to that of non-metros?

The opportunity to develop is not only in big cities but also in smaller ones. We took the sample from seven cities in six Southeast Asian countries. For Indonesia, we chose Greater Jakarta as a sample. Interestingly, these big cities in Southeast Asia represent 15% of the population of Southeast Asia. The metro areas represent 30% of the GDP but made up half of the total internet economy in 2019.

If you look at the gross merchandise value (GMV) pattern spending per capita, today, metros are almost 6x that of non-metros. What’s interesting is that both are still growing.

The internet economy of beyond metros will grow fourfold between 2019 and 2025, twice as fast as in metro areas. We will see tier two and tier three cities coming up.

What else have you observed concerning metros versus non-metros?

The adoption of financial services beyond metros is also increasing. More subscribers beyond metros are paying for premium online media services such as gaming, music, and video on demand.

In Indonesia, for example, 46% of all Google searches for internet packages come from non-metro areas. We also observed the trend that travel-related queries on Google last year grew 1.5x faster from outside metros compared with metros.

Which sector did you find has grown the quickest compared to others in Southeast Asia, particularly in Indonesia?