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Southeast Asia’s Digital Economy to Hit $218 Billion in 2023

In the Google, Temasek, and Bain & Company report there is a forecast that the total value of transactions in the space of the digital economy of Southeast Asia will reach $218 billion this year.

Southeast Asia’s Digital Economy to Hit $218 Billion in 2023

If these expectations turn out to be an objective financial reality, the total cost of operations in the mentioned virtual commercial sector will increase by 11% compared to the result recorded in 2022. Special attention should be paid to the fact that the positive forecast was made public during a period of macroeconomic difficulties of a global nature.

The report entitled e-Conomy SEA 2023 indicates that Southeast Asia has managed to cope with the economic challenges of our time more effectively than other regions of the world and at the same time demonstrated a high level of sustainability. Also, the experts who are the authors of this report state that in the second half of this year, consumer confidence was restored compared to the value of this indicator, which was typical for the period from January to June.

Analysts assessed five main segments of the Southeast Asian digital economy space, including e-commerce, travel, food, virtual financial services, and online media. Experts expect that by the end of this year, the revenue of this economic environment will reach $100 billion. This expected figure indicates the dynamics of growth, which is 1.7 times faster than the rate of positive change in the total value of transactions.

Experts also say that currently, companies that operate in the digital economy of Southeast Asia are gradually beginning to change the concept of doing business, moving from a strategy of ensuring development at all costs to a paradigm of focusing on profitability. According to analysts, this trend indicates a desire to create a so-called healthy business.

Fock Wai Hoong, head of the Southeast Asia department at Temasek, during a conversation with media representatives, said that the digital economy of this part of the world is currently at an important stage of its development, which he described as an unprecedented turn to profitability. According to the expert, in this region, there is a laser-like focus on high-quality income and monetization, which is incredibly useful.

The report analyzed the situation in six major economies of Southeast Asia, including the Philippines, Indonesia, Malaysia, Thailand, Singapore, and Vietnam. In this case, the experts did not take into account the processes in Cambodia, Laos, Brunei, Myanmar, Papua New Guinea, and East Timor.

Sapna Chadha, vice president of Google in Southeast Asia, says that maintaining attention to the digital participation gap and resolutely removing barriers that prevent a large number of residents of this region from accessing several products and services will ensure further growth of the local economic sector existing in the virtual dimension.

The report indicates that companies that operate in the online space are moving from the concept of gaining users with high costs to a strategy of deepening interaction with existing customers in the pursuit of improving profitability indicators.

Fock Wai Hoong says that firms and entrepreneurs are now coming to understand that the best way to ensure growth is not to achieve the corresponding goal by any means, but to extend the mentality of the early stage of the business’s existence to the entire scale of subsequent activity.

The report indicates that e-commerce platforms mainly focus on gaining valuable users, increasing transaction volumes, and finding sources of income, including advertising and goods delivery services. These efforts are aimed at stimulating long-term growth. According to experts, the gross transaction value in the digital economy sector of Southeast Asia will reach $186 billion in 2025. Currently, this figure is $139 billion.

Against the background of the participation of consumers with limited banking capabilities and small businesses in the virtual economy, the relevance of digital lending is growing, which in the mentioned region has a financial volume equal to $30 billion. Experts predict that by 2030 Singapore will become the largest market for the mentioned lending.

As we have reported earlier, Transactions With Digital Yuan Hit $250 Billion.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.