Internet economy in Southeast Asia to grow to $50 billion this year

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The online economy is expected to grow substantially in Southeast Asia, a region which is already the world’s third largest in terms of the number of Internet users behind China and India, currently counting 330 million and growing.

According to a research report co-authored by Google and commissioned by Singapore’s state investment holding Temasek, the market – spanning from online shopping to travel booking to ride-hailing – will reach $50 billion this year, putting it on a solid trajectory to grow fourfold by 2025 and reach $200 billion.

Online travel remains the biggest segment for Internet-based spending — jumping to $26.6 billion in 2017 from $19.1 billion in 2015 — but e-commerce (excluding second-hand sales to consumers) and ride-hailing saw the highest growth.

E-commerce grew at a rate of 41 per cent to cross $10 billion for the first time in 2017 and is expected to hit $88 billion by 2025 to become the most lucrative segment.

In the ride-hailing sector, Uber, Grab and Go-Jek have strong standings, and the total spending on the taxi apps has more than doubled over two years to cross $5 billion in 2017. The ride-hailing industry is expected to develop further still and reach $20 billion by 2025, that’s up from an original estimate of $13 billion in a 2015 report.

The growth is being driven by a surging number of new smartphone users which is, however, also where the Internet is changing daily behaviours. The report found that, in average, 3.6 hours are spent on the mobile Internet every day in Southeast Asia, more time than anywhere else on the planet. Thailand is top of the list with 4.2 hours per day, with Indonesia a close second at 3.9 hours per day. To compare, people in the US spend two hours per day in average, in the UK 1.8 hours per day, and in Japan one hour per day on mobile Internet.

While this is creating business opportunities, it is also has negative effects on interpersonal communication of younger people who are prone to unproductive over-consumption of social media, a problem particularly acute in Thailand.

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Reading Time: 2 minutes

The online economy is expected to grow substantially in Southeast Asia, a region which is already the world’s third largest in terms of the number of Internet users behind China and India, currently counting 330 million and growing.

Reading Time: 2 minutes

The online economy is expected to grow substantially in Southeast Asia, a region which is already the world’s third largest in terms of the number of Internet users behind China and India, currently counting 330 million and growing.

According to a research report co-authored by Google and commissioned by Singapore’s state investment holding Temasek, the market – spanning from online shopping to travel booking to ride-hailing – will reach $50 billion this year, putting it on a solid trajectory to grow fourfold by 2025 and reach $200 billion.

Online travel remains the biggest segment for Internet-based spending — jumping to $26.6 billion in 2017 from $19.1 billion in 2015 — but e-commerce (excluding second-hand sales to consumers) and ride-hailing saw the highest growth.

E-commerce grew at a rate of 41 per cent to cross $10 billion for the first time in 2017 and is expected to hit $88 billion by 2025 to become the most lucrative segment.

In the ride-hailing sector, Uber, Grab and Go-Jek have strong standings, and the total spending on the taxi apps has more than doubled over two years to cross $5 billion in 2017. The ride-hailing industry is expected to develop further still and reach $20 billion by 2025, that’s up from an original estimate of $13 billion in a 2015 report.

The growth is being driven by a surging number of new smartphone users which is, however, also where the Internet is changing daily behaviours. The report found that, in average, 3.6 hours are spent on the mobile Internet every day in Southeast Asia, more time than anywhere else on the planet. Thailand is top of the list with 4.2 hours per day, with Indonesia a close second at 3.9 hours per day. To compare, people in the US spend two hours per day in average, in the UK 1.8 hours per day, and in Japan one hour per day on mobile Internet.

While this is creating business opportunities, it is also has negative effects on interpersonal communication of younger people who are prone to unproductive over-consumption of social media, a problem particularly acute in Thailand.

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