SEA’s internet economy may hit $1t in GMV by 2030: report

As more consumers go the online route this year, Google, Temasek, and Bain’s e-Conomy SEA Report 2021 estimates that by the end of 2021, the region will reach US$174 billion in gross merchandise value (GMV), a growth of 65.7% from US$105 billion last year. The report also expects the figure to breach US$360 billion by 2025.

Photo credit: Gunawan Kartapranata via Wikimedia Commons

The sixth iteration of the joint report stated that Southeast Asia has entered the “digital decade” as the internet becomes more integral to people’s lives every day. There are now over 440 million people in the region who are plugged into the internet, with 350 million of them being digital consumers – those who have bought from at least one online service.

The latest findings come against the backdrop of the pandemic, which choked the region’s growth to just 5% last year from 2019. With shifts in consumer and merchant behavior coupled with growing investor interest, the report now expects the region to generate US$1 trillion in GMV by 2030.

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The report attributed this growth to the continued boom of ecommerce, with the sector’s GMV projected to jump 62% this year to about US$120 billion compared with last year. The sector’s GMV could potentially reach US$234 billion by 2025 and is expected to propel the momentum of SEA’s internet economy into the next decade, the report noted.

Source: Google-commissioned Kantar SEA e-Conomy Research 2021

Food delivery has also seen continued growth in the region this year, seeing the most number of new years among digital services, with 71% of all internet users ordering meals online at least once. The industry’s GMV grew 33% from last year to reach US$12 billion.

As more consumers in the region consider ecommerce and food delivery part of their daily routines this year, merchants have risen to meet customers’ growing expectations through competitive pricing and wider selections of products.

Support for more payment options has been another highlight this year, with nine in 10 digital merchants now accepting digital payments, according to the findings. Most merchants in the region were seen as likely to increase or maintain their usage of digital financial services, including payments and remittances.

By 2025, digital payments are expected to reach over US$1.1 trillion in gross transaction value, beating the previous forecast of US$707 billion in 2021.

On the other side of the coin, online travel is still facing hurdles in its path to recovery, with the report expecting a small increase in GMV to US$13 billion this year as compared to US$12 billion last year. However, the industry is expected to recover and surpass its 2019 numbers in 2025 due to pent-up demand for international travel.

Strength in investment numbers