(Bloomberg) – Southeast Asia’s scorching internet economy has cooled during the pandemic, but online spending is expected to rebound quickly and triple to more than $ 300 billion by 2025, according to the searches by Google, Temasek Holdings Pte and Bain & Co.
The value of transactions in four key areas – e-commerce, travel, media and transportation and food – is expected to increase by only $ 5 billion to reach about $ 105 billion in 2020, when many consumers turn to are turning to mobile purchases for the first time, but the bottlenecks weighed on spending. on trips.
The region, home to Sea Ltd. Alibaba Group Holding Ltd. and Sea Ltd., backed by Tencent Holdings., will see a 63% increase in the gross value of e-commerce merchandise from 2019, with consumers confined to their homes shopping for essentials and groceries. like RedMart from Lazada and Sea’s Shopee. Online shopping is now expected to reach $ 172 billion by 2025, up from a previous estimate of $ 153 billion, according to the study.
This is “a clear indication that momentum has not been hampered by the harsh environment of the year,” according to the study, a closely watched annual review that covers six countries and serves as a benchmark for the industry. Rapidly growing internet in the region.
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Unsurprisingly, online travel has been hit the hardest. The value of business transactions has plunged 58% to just $ 14 billion this year. Still, the industry’s eventual recovery could push the market to $ 60 billion by 2025, according to the study. Food transportation and delivery – a sector dominated by auto transport leaders Grab Holdings Inc. and Gojek – have also been affected, falling 11% to $ 11 billion in 2020.
Demand for ridesharing services has collapsed globally, prompting the region’s two most valued startups to cut jobs.
Overall, this year’s “seismic” changes in consumer behavior have driven the internet industry forward, the report said. Southeast Asia added 40 million new internet users in 2020, while one in three digital service users logged in for the first time due to Covid-19.
E-commerce is the engine of growth in Indonesia, despite the devastating impact of the pandemic on its global economy. Southeast Asia’s largest economy entered its first recession since the Asian financial crisis more than two decades ago in the third quarter. But Google, Temasek and Bain expect Indonesia’s digital economy to triple to $ 124 billion by 2025, albeit down from a previous estimate of $ 133 billion.
The pandemic has also accelerated the adoption of online financial services, as more consumers use contactless means to pay and transfer money, thereby avoiding cash. Digital loans, however, were unchanged from last year at $ 23 billion, reflecting concerns about non-performing loans.
“Untested peer-to-peer lenders targeting riskier payday loans and some smaller traditional lenders will face challenges over the next few quarters,” the report said.
Technology investments in Southeast Asia have declined since 2018, mainly due to a slowdown in expensive unicorn funding. Tech companies in the region raised $ 6.3 billion in the first six months of this year, up from $ 7.7 billion a year earlier. Investments other than unicorns are increasing, according to the study.
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