Malaysia has recorded the fastest digital-economy growth in Southeast Asia, expanding by 19% year-on-year and projected to reach a gross merchandise value (GMV) of US$39 billion by 2025.
The data was presented in the 10th edition of the e-Conomy SEA Report 2025 by Google, Temasek, and Bain & Company. The report notes that this growth is driven by resilient consumer digital adoption and stable economic conditions, including controlled inflation.
At the regional level, Southeast Asia’s digital economy is expected to surpass US$300 billion in GMV by 2025, growing 15% annually—1.5 times higher than earlier projections. Home to more than 680 million people, the region continues to demonstrate resilience despite the effects of the pandemic, global inflation, and supply-chain pressures.
Growing 21%, E-Commerce Drives Malaysia’s GMV
E-commerce remains the largest contributor to Malaysia’s digital economy. Its value is expected to reach US$20 billion by 2025 after recording 21% annual GMV growth, making it the second-fastest expansion in Southeast Asia.
Bain & Company explains that the consolidation of major platforms and the rising momentum of video commerce are the key drivers. Video commerce now accounts for about 10% of total GMV.
Domestic data also shows a positive trend. The Department of Statistics Malaysia (DOSM) reported that e-commerce revenue from January to September 2025 reached 937.5 billion MYR, an increase of 1.9% compared to the same period last year.
The second quarter recorded the highest figure at 313.8 billion MYR, before dipping slightly to 312.6 billion MYR in the third quarter.
Business digitalisation also continues to progress. The 2024 ICT and e-commerce usage report shows that e-commerce revenue reached 1.18 trillion MYR in 2023, driven by developments in the manufacturing, services, construction, and agriculture sectors.
Digital financial services are likewise posting double-digit growth. Digital payments are projected to reach a gross transaction value (GTV) of US$213 billion by 2025.
Bank Negara Malaysia reported a 28% increase in digital payment usage, while the DuitNow QR standard continues to expand cross-border interoperability across Southeast Asia, accelerating the shift toward cashless transactions.
Online Travel Leads Momentum
The online travel sector has emerged as one of the fastest-growing segments. Malaysia’s online travel GMV rose by 19%, the highest in Southeast Asia. This growth is driven by expanded air connectivity, visa liberalisation policies, and large-scale digital tourism campaigns ahead of Visit Malaysia 2026.
In the first half of the year, international tourist arrivals increased by more than 20%. Travellers are also increasingly opting for digitally integrated travel services.
The report notes that arrival levels have nearly returned to pre-pandemic figures, while accommodations in markets such as Malaysia and Singapore have been able to raise their average rates by more than 20%.
Efforts to strengthen the travel sector continue through partnerships with online travel platforms and various promotional programmes, supporting the target of 45 million visitors in 2026.
Google Malaysia adds that the use of artificial intelligence (AI) within the digital sector is also rising rapidly. Malaysian consumers are cited as among the most active users of generative AI tools in the region.
Strengthening Malaysia’s Tech Ecosystem
The Malaysia Digital Economy 2025 report highlights the rapid development of the national digital ecosystem. Fixed and mobile broadband subscriptions reached 49.2 million in 2025.
4G coverage has expanded to 98.8%, while 5G coverage has reached 82.4%. The government continues to enhance communications infrastructure to support digital development.
Large-scale data centre expansion is also accelerating. The adoption of artificial intelligence, the Internet of Things (IoT), process automation, cloud services, and cybersecurity solutions is further strengthening the foundation of Malaysia’s digital economy.
These factors support a continually advancing digital transformation and solidify Malaysia’s position as one of the region’s leading digital-growth hubs.
