Southeast Asia’s internet economy is forecast to reach $300 billion by 2025 – driven by online shopping — from an estimated $100 billion this year.
The annual report increased its 2025 outlook from $240 billion previously after a tripling in growth in the past four years alone.
“This pace of growth has exceeded all expectations,” the 64-page report said. “Internet access is now affordable for large segments of the population and consumer trust in digital services has improved significantly.”
More than $37 billion has been invested in Southeast Asian online companies over the past four years with the majority going into e-Commerce firms like fashion retailer Zilingo and ride-hailing Unicorns such Grab and Gojek.
The report is prepared by Google, Singapore state investor Temasek Holdings and global business consultants Bain & Company.
Ride-hailing alone was worth $13 billion, quadrupling in value since 2015, and was expected to reach $40 billion by 2025, when food delivery will be worth as much as transport.
Southeast Asia’s average growth rate of 5 percent per year since 2014 puts it far ahead of the global average and makes it an attractive investment destination as the Chinese economy is hobbled by the China-United States trade war.
There are 360 million internet users across the countries covered in the report – Indonesia, Malaysia, Vietnam, Singapore and the Philippines – up from 260 million four years earlier.
That compares to around 4.4 billion internet users worldwide, up 9 percent on a year ago.
Malaysia’s competition regulator has proposed a fine of more than 86 million ringgit ($20.53 million) on Grab for violating the country’s competition law by preventing its drivers from promoting rival services.
Singapore this week implemented a law requiring social media sites like Facebook and Twitter to carry corrections or remove content the government considers to be false. Rights groups have expressed concern the “fake news” law will curb internet freedoms.
The industry is also still struggling to fill labor gaps, with demand for skilled tech workers far outstripping supply.