Southeast Asia’s Internet economy is now worth US$72 billion – and Google predicts it’ll hit US$240 billion by 2025

A research report from Google and Temasek found that Southeast Asia’s Internet economy was worth US$72 billion in 2018.
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  • e-Conomy SEA 2018, a research report by Google and Temasek, valued Southeast Asia’s Internet economy at US$72 billion this year.

  • This is well over double its US$32 billion value in 2015.

  • By 2025, the industry will be worth an estimated US$240 billion.

  • Currently, the three biggest Southeast Asian markets are Indonesia, Thailand and Singapore.

Southeast Asia has the fastest growing Internet economy in the world – second only to China and America, and large enough to rival India.

These were among the comments made to reporters by Rajan Anandan, Google’s vice president for India and Southeast Asia, at a press event for the e-Conomy SEA 2018 report, which analysed the Internet economy in six Southeast Asian countries – Indonesia, Malaysia, Singapore, Thailand, Vietnam and the Philippines.

The report, based on research conducted by Google and Temasek, looked at the Internet economy across four areas: ride-hailing, online media (advertising, gaming, subscription music and video on demand), online travel, and e-commerce.

Using data from Google Search, Temasek research and third-party sources, the report found that Southeast Asia’s Internet economy was worth US$72 billion (S$98 billion/RM301 billion) in 2018 – over double its US$32 billion valuation in 2015.

The report said that by 2025, this number is expected to exceed US$240 billion, up from last year’s US$200 billion estimate.

e-Conomy SEA 2018

e-Conomy SEA 2018

Indonesia had the largest and fastest growing Internet economy of the six countries, boasting 150 million users and and a value of US$27 billion.

The next biggest markets were Thailand (US$12 billion) and Singapore (US$10 billion).

Contributing to this massive growth was the rapidly increasing number of mobile Internet users. In Southeast Asia, the number of Internet users jumped by 90 million from 2015 to hit 350 million users in 2018.

Of the six Southeast Asian countries countries researched, four were among the world’s top 10 countries with the highest mobile engagement: Thailand, Indonesia, Malaysia and the Philippines.

People in Thailand spent nearly five hours a day using the Internet on their phones – more than any other country in the world – while people in Indonesia, Malaysia and the Philippines each averaged about four hours.

These numbers are significantly higher compared to the same in America and the UK (about 2 hours) or Japan (1.5 hours).

“With more than 90 per cent of Southeast Asians connecting to the Internet primarily through their smartphones, this is one of the most mobile-first Internet regions globally,” the report said.

It added that phones were the gateway to the Internet for “vast segments of the population” without access to computers.

One factor contributing to this was cheaper mobile data prices. According to the report, the cost of one gigabyte of mobile Internet had “more than halved relative to the income of Southeast Asians over the last four years”.

The E-Commerce Market

Among the six countries, Indonesia’s growth in e-commerce was the highest, at an estimated US$12.2 billion. This accounted for “more than $1 in every $2 spent in the region,” the report said.

The report also highlighted three dominant companies in the e-commerce market – Lazada, Shopee, and Tokopedia – which are estimated to have grown a collective 700 per cent since 2015, a figure “well above the rest of the sector”.

e-Conomy SEA 2018

Google Searches for Lazada, Shopee, and Tokopedia had quadrupled since 2015, and downloads of these three apps made up nearly 80 per cent of all e-commerce app installations.

Deliveries also grew from 800,000 per day in 2015 to more than 3 million per day in 2018, according to the report.

New Jobs Created

In terms of jobs, the Internet economy was responsible for creating over 100,000 jobs for skilled professionals and 500,000 “full-time equivalent” partner jobs for services like food delivery and ride-hailing as of 2018.

“Internet economy companies employ highly-skilled professionals in functions like software engineering, digital marketing, data science, and product marketing that often command salaries three to five times higher than median wages in Southeast Asian countries,” the report said.

It added that “partner jobs offer wages that are 20 per cent to 30 per cent higher than alternative job opportunities.”

The report estimated that the number of jobs for skilled professionals in the Internet economy would double to 200,000 by 2025, and the number of partner jobs would triple in that same time to cope with expected growth.