Southeast Asia’s Internet economy on track to hit $200bn by 2020, according to Google and Temasek

Southeast Asia’s Internet economy on track to hit $200bn by 2020

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 ​estimate​d ​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​ ​tech​nology ​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.

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