Google: Southeast Asia E-commerce Report 2020 (128 pages)

Google released the "2020 Southeast Asia E-commerce Report". Despite the challenging economic environment, Southeast Asia's Internet industry continues to maintain strong growth, reaching US$100 billion by 2020 and is expected to exceed US$300 billion in 2025.

E-commerce has become the largest industry in the region, growing 63% to $62 billion in 2020 and is expected to continue growing to reach $172 billion by 2025. Travel, on the other hand, was the most affected industry, contracting 58% to $14 billion.

40 million people in the region went online for the first time this year, bringing the total number of internet users to 400 million. In addition, one-third of consumers started using new online services as a result of COVID-19. A large number of new online consumers came from non-metropolitan areas, especially in Malaysia, Indonesia and the Philippines.

Other key insights:

1) Ability to respond in times of crisis

Despite headwinds, Southeast Asia’s digital economy remains strong and resilient. E-commerce, food delivery, and online media have surged in popularity and usage. In the long term, digital financial services will gain traction as consumers and small and medium-sized enterprises (SMEs) increasingly accept online transactions.

Digital payments increased from $600 billion in 2019 to $620 billion in 2020 and are expected to reach $1.2 trillion by 2025.

Online media grew 22% in 2020 to $17 billion, with video searches increasing 18-fold in Thailand and 12-fold in Vietnam.

2) Online travel and transportation will take time to recover

The worst-affected sector in the region is online travel. However, there are signs of recovery in domestic tourism, especially in hotels and vacation rentals within driving distance of major metropolitan areas. Online travel is expected to rebound to $60 billion by 2025.

Likewise, despite the easing of lockdowns and restrictions in several Southeast Asian countries, declining confidence in shared transportation is likely to lead to a weak recovery in the first half of 2021. The transport and food sector is expected to rebound to $42 billion in 2025.

3) New areas of Southeast Asia’s Internet economy

The pandemic has driven adoption in emerging sectors such as healthtech and edtech. Usage of leading digital health apps is four times higher than pre-pandemic, and usage of leading education apps is three times higher.

4) Ecosystem Challenges

Southeast Asia will overcome the initial challenges of the internet economy by providing more affordable internet access and increasing consumer trust in digital services.

The number of cash transactions has fallen to 37% from 48% before COVID-19, while the exponential growth of e-commerce has prompted improved logistics across the region.

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