e-Conomy SEA 2021

Consumers cruise intoa new way of life

40M new internet users came online in 2021, bringing the internet penetration in Southeast Asia (SEA) to 75%. Consumption of digital services remains strong more than a year into the pandemic - a trend that will likely continue.1

Continued adoption

The internet economy continues to attract new consumers more than a year into the pandemic.1

Amongst SEA’s internet users, 8 out of 10 are digital consumers.2

60M new digital consumers joined the internet economy since the pandemic started. 20M joined in H1 2021.3

Deeper usage

The internet economy has seen increased spend and frequency of use amongst existing consumers.

Existing consumers are purchasing in nearly 4 more digital services than they did before the pandemic.4

6 in 10 existing users of groceries and food delivery increased usage and spend vs. pre-COVID.5

Satisfied users

The consumer shift is permanent - satisfied users intend to continue using digital services.

8 in 10 digital consumers are satisfied with their digital services.6

9 out of 10 new users in 2020 continue to use them in 2021.7

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Digital merchants take off

Underpinned by the extraordinary shift in consumer consumption, SEA’s SMEs have been adopting technology with fervour.

Digital merchants

In our inaugural feature on Southeast Asian SMEs, we profiled ~3,000 digital merchants.

Digital merchants: B2C businesses, mostly < 100 employees, with online sales in the past year.8

Digital platforms

Most have a positive view of digital platforms, but profitability remains a top concern.

1 in 3 digital merchants believe they would not have survived COVID-19 if not for digital platforms.9

1 in 3 digital merchants cited “too expensive” as the top barrier for digital platform adoption.10

Digital financial services

Digital financial services are critical enablers.

9 in 10 digital merchants now accept digital payments.11

The majority of merchants who use digital financial services intend to continue or increase usage.12

Digital tools

Digital merchants are embracing end-to-end digitalisation efforts through usage of digital tools.

Digital marketing tools see the largest increase in usage as merchants vie for attention online.13

In the next 5 years, 8 in 10 merchants anticipate >50% of their sales will come from online sources.14

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Resilience gives way to resurgence

SEA’s internet economy was resilient in 2020, but 2021’s revitalisation has propelled the region upwards to >$170B GMV.15

SEA-wide positive growth

With all SEA markets exhibiting double-digit growth, SEA's 2025 GMV is propelled upwards.

The region is now poised to surpass previous estimates and reach $360B GMV by 2025.16

e-Commerce leading growth

A continued surge in e-commerce is driving most of the year’s market growth.

e-Commerce GMV grew +62% YoY.17

Financial services flourishing

All digital financial services are flourishing, especially digital lending.

Consumer e-wallet usage has surged 45% compared to pre-COVID periods.18

Strong recovery in digital lending, underpinned by low non-performing loans and economic rebound.19

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Funding on track toreach new heights

In 2021, investments in SEA’s internet economy hit an all-time high despite the pandemic. The race to public markets is heating up but remains fraught with questions.

Busiest deal year

2021 on track to be SEA’s busiest deal year in recent times.

The H1 2021 deal value is already on track to surpass the 2020 full year value.20

Record dry powder

Record-high dry powder poised to spur more deal activity in 2021 and beyond.

Dry powder in the region remains elevated at $14B.21

Leading investment sectors

e-Commerce and digital financial services continue to attract the lion's share of investment dollars.

Rocketing deal values in e-commerce are mainly driven by logistics.22

Digital financial services steam ahead: H1 2021 deal values have surpassed those of full year 2020.23

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The twenties roartowards a trillion

SEA is entering the ‘Digital Decade’. Seismic shifts in consumer and merchant behaviour mean its internet economy could reach $1T GMV by 2030. Talent remains critical to success, with new enablers.

$1T GMV by 2030

The 'Digital Decade': by 2030, SEA's internet economy could reach $1T GMV.24

As online shopping becomes the norm for consumers, e-commerce could comprise >2/3 of SEA's 2030 GMV.25

Indonesia's 2030 GMV alone could be 2X SEA's GMV today.26

Key growth drivers

Marked upswing in key growth drivers, but talent continues to be a challenge.

Shortage of technical talent reiterates the need to invest in a reliable pipeline of talent.27

New enablers

Entering SEA's 'Digital Decade', new enablers will drive growth in the internet economy.

Future enablers need multilateral solutions between consumers, merchants, platforms, and regulators.

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