Southeast Asia's internet economy is set to grow by 11% in 2023, marking a slowdown compared to last year's 20% growth, as revealed in a recent report published by Google, Singapore's Temasek Holdings, and Bain & Company.
The report also revised the region's projected internet economy size in 2025 from $330 billion to $295 billion.
While the growth forecast has slowed, the report remains positive about the digital economy's prospects. It anticipates that the travel and transport sectors will recover to pre-pandemic levels by 2024.
The adjustment in forecasts is due to long-term goal changes and post-pandemic stabilization, suggesting that the region is now on a steadier path toward 2025.
The region comprises 11 countries with a young population, widespread smartphone usage, and a growing middle class, making it one of the world's fastest-growing internet markets.
Among these countries, Vietnam's digital economy is expected to grow by 20% annually from 2023 to 2025, reaching approximately $45 billion by 2025, the fastest growth in Southeast Asia alongside the Philippines. This would be driven by strong government support, investments by commercial banks and the growing popularity of QR codes.
The report also covers Indonesia, Thailand, Singapore, Malaysia, and the Philippines. It notes a decline in private funding for digital economy-related sectors to 2017 levels but highlights that cash reserves for investments continue to rise.
In conclusion, Southeast Asia's digital economy is evolving, and though growth may have slowed temporarily, the region remains a promising market for technology and internet-related businesses.