SE Asia’s web economy seen reaching $200B in 2025
From $30 billion now
Southeast Asia’s Internet economy, spanning online shopping to games and advertising, will surge six-fold to about $200 billion in the next decade, according to joint research by Google Inc. and Temasek Holdings Pte.
As more consumers get online and shop from smartphones, e-commerce in the region could jump to $88 billion by 2025, a 16-fold increase, according to a report the two companies released in conjunction with a conference in Singapore.
That growth will be driven by an increase in the number of Internet users from 260 million to 480 million by 2020, according to the report.
Indonesia, the biggest economy in Southeast Asia, is projected to add Net users faster than any other country in the world, according to the report.
Despite such prospects, the region that also includes Malaysia, Singapore, the Philippines, Thailand and Vietnam attracted less than a fifth of the venture capital funding India received in 2014.
In 2014, VC investment in Southeast Asia accounted for 0.04 percent of its gross domestic product.
That compares with 0.15 percent in China, 0.25 percent in India and 0.3 percent in the US, according to the report.
“There’s a $200 billion opportunity in Southeast Asia,” Rajan Anandan, managing director of Southeast Asia and India at Google, told the conference.
“Affordable smartphones and affordable data are really driving this revolution.”
Google and Temasek, Singapore’s state-owned investment company which invests in VC firms and startups through its unit Vertex Venture Holdings Ltd., worked together on the report, using Google’s proprietary data, Temasek’s research, as well as interviews with 59 experts.
Populous Southeast Asia is the world's fastest-growing region when it comes to Internet users, the report said.
The report, called "e-conomy SEA," said Southeast Asia's current 260 million Web users should nearly double to about 480 million by 2020 as Internet access becomes more common, particularly in fast-growing countries such as Indonesia.
The combined value of the region's e-commerce and online media industry should rise from about $30 billion now to some $200 billion by 2025.
The combined gross domestic product for Southeast Asian nations in 2014 was $2.4 trillion, which was greater India's $2.1 trillion that year. But venture capital investments in Southeast Asia are currently less than one fifth of those in India, the report says.
In order for the region's Internet economy to mature to its full potential, investors need to step up their game to startups have resources to grow, the report says.