Southeast Asia’s Internet economy is set to hit $50bn in 2017, outpacing earlier growth expectations by 35% and well on track to realising a $200bn internet economy by 2025, according to a report released by Google and Temasek Holdings, the Singapore government’s investment vehicle, called the ‘e-Conomy Southeast Asia Spotlight 2017’.
The report found that ecommerce sales are accelerating in SEA, reaching $10.9bn in gross merchandise volume in 2017, up from $5.5bn two years ago and growing at 41% compound annual growth rate due to the rise of small and medium businesses (SMB) with mobile-first platforms like Lazada, Shopee, and Tokopedia.
Consumer engagement with these platforms have boomed tremendously, with Google searches for top SEA ecommerce brands growing more than two times in two years and mobile internet users spent an average of 140 minutes per month on theses platforms.
Ride hailing services is another sector with massive user engagement, the report found, as it experienced dramatic growth in the past two years. It estimated these services will reach $5.1Bbn GMV in 2017, more than double from $2.5Bbn GMV in 2015 as more than 6m rides per day were booked ride-hailing apps like Go-Jek, Grab, and Uber in Q3 2017, a more than four-fold increase since 2015.
One area that is a cause of concern is the shortage of homegrown technology talent, said the report, as even though in the last two years, venture capital fundraising has accelerated, and advances in the development of e-payment solutions, Internet infrastructure, delivery networks, and consumer trust in online transactions has improved, the talent challenge remains largely unsolved.