e-Conomy SEA is a multi-year research programme launched by Google and Temasek in 2016. Bain & Company joined the programme as lead research partner in 2019. The research leverages primary research, Temasek insights, Bain analysis, Google Trends, expert interviews, and industry sources to shed light on the digital economy in Southeast Asia.

Executive Summary

Profitability on the horizon

• Growth sustained across core metrics: SEA’s digital economy has made significant progress, demonstrating solid performance in 2024 with double-digit growth across gross merchandise value (GMV) ($263 billion, +15% YoY), revenue ($89 billion, +14% YoY), and profit ($11 billion, +24% YoY).
• Profitability on the rise across sectors: Tighter commissions, targeted incentives, and new revenue streams like advertising have contributed to profit multiplying by a 2.5x increase in profit over the past two years. Key players have made significant strides towards profitability milestones.
• E-commerce reaccelerates, fuelled by video commerce: E-commerce surges to +15% YoY, propelled by video commerce, which now accounts for 20% of e-commerce GMV, up from less than 5% in 2022.
• SEA emerging as a gaming export hub: Developers in the region are capturing an outsized share of the global mobile gaming market, driving 12% of downloads in 2024. In parallel, gaming content is booming, with more top creators and uploads than any other consumer category.

Clearing the path to investment exits

• Private funding remains subdued: Higher interest rates, geopolitical uncertainty, and persistent economic challenges have all contributed to a decline in deal volume across the region.
• Investors turn their focus to future potential: Despite muted funding activity, investors demonstrate confidence in SEA's long-term potential, directing nearly 50% of investments towards nascent sectors like software and services and AI.
• Ongoing initiatives clear exit pathways: In a challenging exit environment, early-stage companies are making significant progress towards profitability. Efforts are in motion to improve capital market conditions, such as cross-border collaborations and IPO regulatory improvements.

Surveying the terrain ahead

• Maintaining digital trust is imperative: Although fraud rates are declining due to the increase in user awareness and implementation of stronger fraud controls, online scams remain prevalent, with half of all digital users falling victim despite expressing confidence in spotting them.
• Harnessing SEA’s AI infrastructure advantage: The region is attracting significant AI investment, with over $30 billion committed to AI infrastructure in the first half of 2024 alone. SEA is well-positioned to compete in data centres and end-layer applications.
• AI applications see accelerated time to value: AI is starting to drive transformative value for SEA’s digital economy, through both broad and sector-specific business use cases. Early adopters are realising returns on their investments within 12 months of implementation.

About Google

Google’s mission is to organize the world’s information and make it universally accessible and useful. Through products and platforms like Search, Maps, Gmail, Android, Google Play, Chrome and YouTube, Google plays a meaningful role in the daily lives of billions of people and has become one of the most widely known companies in the world. Google is a subsidiary of Alphabet Inc.

About Temasek

Temasek is a global investment company with a net portfolio value of S$382 billion (US$287b) as at 31 March 2023.  Its Purpose “So Every Generation Prospers” guides it to make a difference for today’s and future generations.  As an active investor, forward looking institution and trusted steward, it is committed to deliver sustainable value over the long term. Temasek has overall corporate credit ratings of Aaa/AAA by rating agencies Moody’s Investors Service and S&P Global Ratings respectively.  Headquartered in Singapore, it has 13 offices in 9 countries around the world: Beijing, Hanoi, Mumbai, Shanghai, Shenzhen, and Singapore in Asia; and London, Brussels, Paris, New York, San Francisco, Washington DC, and Mexico City outside Asia.