Vserv Insights 5 trends ecommerce companies India featured
5 trends E-commerce companies in India cannot afford to miss
June 28, 2016
Vserv Insights Digital Advertising in India
4 trends that spell a bright future for digital advertising in India
July 12, 2016

What's driving Southeast Asia's booming Internet economy


SEA - Internet users by countryWhen it comes to Internet adoption across the world, Southeast Asia as a region has gone into an overdrive of sorts. According to a recent Temasek report, Southeast Asia is world's fastest growing Internet region with its Internet user pegged to jump from the existing 260 million to over 480 million users by 2020.

The fourth largest Internet market in the world, Southeast Asia with markets including Indonesia, Malaysia, Thailand, Vietnam, Philippines and Singapore currently has an Internet penetration of over 40% and this figure is only set to go northwards. Southeast Asia is estimated to become a USD 200 Billion Internet Economy by 2025.

SEA - Three growth segmentsWhile most of this economy will be centered around mobile, here are a few factors that will be the driving force:

  1. Advertising & gaming: big players
    Online media (ads + gaming) will contribute to close to USD 20 billion by 2025 and will be highly profitable sectors
  2. Online travel will fly high
    Online travel market will contribute close to USD 90 billion by 2025 growing at a 10-year CAGR of 15%. 85% of this market will be driven by online hotels & airlines bookings which will contribute close to USD 77 billion by 2025. Online ride hailing services (e.g. Uber) market (which are estimated to grow at a 10-year CAGR of 18%) will contribute close to USD 13 billion making up for the rest of the share. People are increasingly choosing to use these services, and the 30-day active rider number, which was an estimated 7.3 million in 2015 is set to hit 29 million by 2025.
  3. Retail going E-tail
    The E-commerce market which is estimated to reach USD 88 billion by 2025, will also be another big growth driver. The SEA E-commerce (apparel, electronics, household goods, food /grocery) market is estimated to grow at a CAGR of 32% between 2015 and 2025 as opposed to offline retail, which is estimated to grow at a CAGR of just 7% during the same period.

SEA - Internet user penetration
Needless to say, much of this growth is powered by mobile, which is the medium through which the world in general prefers to access Internet today. Southeast Asia is no different. In fact, increasing smartphone penetration which itself is currently at around 40% on average across the region, will be a buoying factor to the growth of Internet usage in Southeast Asia. M-commerce already makes up for 30% of the total E-commerce market and going forward it will be the driving force behind the Internet Economy in Southeast Asia.

This insight is a good headstart for marketers looking to tap into the Southeast Asian economy. Your audience when shopping online is more likely to start their purchase journey on a smartphone with a pre-purchase research. Hotel and airline booking via smartphones is already catching on and online ride hailing services have always been mobile-first or mobile-only. Get your mobile marketing strategy in place now and ride the Internet growth wave as it hits Southeast Asia.

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright of Vserv 2019