Southeast Asia's internet economy is expected to exceed $240 billion by 2025, a joint study by Google and Temasek Holdings showed, a fifth more than previously estimated, as more consumers use their smartphones to go online.
The study, first published in 2016, encompasses ride-hailing, e-commerce, online travel and online media. The latest report released on Monday adds new sectors such as online food delivery, as well as subscription music and video on demand.
It estimated that the gross merchandise value (GMV) of the region's internet economy has reached $72 billion in 2018, rising 37 percent from the year earlier.
The GMV of e-commerce in the region will exceed $23 billion in 2018, the report said, and rise more than four times to exceed $100 billion by 2025, helped by increased consumer trust.
200,000 HIGHLY SKILLED JOBS
Channel News Asia also reports that the Internet economy is set to create 1.7 million full-time jobs in Southeast Asia by 2025, three times the number in 2018.
Of the 1.7 million jobs, about 200,000 highly skilled jobs will also be created by 2025 as companies continue to grow their core business and expand into new areas.
The research also stated that the growth of skilled jobs is now at a rate of 10 per cent per year.
This is significantly faster than the employment growth in the rest of the economy, which is averaging 1 to 3 per cent per year in most Southeast Asian countries.
Internet economy companies employ highly skilled professionals in functions like software engineering, digital marketing, data science and product marketing among others. These jobs often command salaries three to five times higher than median wages in Southeast Asian countries, the research found.
It credited e-commerce companies - Alibaba Group Holding Ltd's Lazada, Sea Ltd's Shopee, and Indonesia's Tokopedia - for helping develop the sector.
The report estimated that the GMV of the competitive ride hailing sector, with the addition of online food delivery, has reached $7.7 billion in 2018.
“Powered by the ambitions of Go-Jek and Grab to become Southeast Asia’s ‘everyday apps’, we project that ride hailing will reach almost $30 billion by 2025,” the Google-Temasek study said, as quoted by Reuters.
Both Alphabet Inc’s Google and Singapore state investor Temasek have invested in Go-Jek. Temasek-backed Vertex Ventures is an early investor in Grab.
The Indonesian internet economy is forecast to grow to $100 billion by 2025, accounting for $4 of every $10 spent in the region, the report said.
WORLD'S MOST ENGAGED INTERNET USERS
The Google-Temasek research also found that there are more than 350 million Internet users across Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam as of June 2018 - 90 million more than in 2015.
This makes Southeast Asians the most engaged Internet users in the world.
According to the research, more than 90 per cent of them connect to the Internet primarily through their smartphones.
The research attributes the rapid growth of users to the increasing availability of affordable smartphones, and the roll-out of faster and more reliable mobile telecommunication services.
Of the six Southeast Asian countries covered in the research, Vietnam currently has the most developed Internet economy for value of merchandise sold in 2018, standing at four per cent of its gross domestic product.
Singapore comes in second at 3.2 per cent.
