An industry report showed that the internet economy of Southeast Asia is forecast to expand and reach $300 billion by 2025.
The report by Google, Singapore state investor Temasek Holdings and global business consultants Bain & Company, the internet economy of Southeast Asia (SEA) is expected to reach $300 billion by 2025 as millions of people take up online shopping and ride-share food delivery.
In order to reach this target, the online industry is expected to grow by 200% over the next five years from around $100 billion this year. Previously, the annual report had an outlook of $240 billion but was revised after a tripling in growth in the past four years.
The past growth was attributed to the increase in young internet users doing everything on their phones, from banking and playing games to purchasing plane tickets.
The report stated: "This pace of growth has exceeded all expectations. Internet access is now affordable for large segments of the population and consumer trust in digital services has improved significantly."
The report also found that over  $37 billion has been invested in Southeast Asian online companies over the past four years, particularly in e-commerce businesses such as fashion retailer Zilingo and ride-hailing apps such as Grab and Gojek. The ride-hailing sector has quadrupled in value since 2015 to $13 billion and is forecast to reach $40 billion by 2025 as food delivery catches up to transportation.
Data from wearesocial.com, a digital monitoring service, revealed that internet users in Indonesia, Malaysia, Vietnam, Singapore and the Philippines went up from 260 million in 2015 to 360 million in 2019, compared to the 9% increase in worldwide internet users to around 4.4 billion from 2018.
Despite the past growth and positive outlook for the region, industry concerns remain, including regulatory risks and a shortage of skilled labor. The report added: "Talent remains a pressing constraint despite all efforts by internet economy companies to 'fill the gap."
