Consumer confidence
Consumers take heart as inflation and interest rates stabilise
Consumer confidence has rebounded
Report highlights
Walk through key highlights from the 2023 report in five minutes
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Growing against macroeconomic headwinds
The region has withstood the recent macroeconomic storm and demonstrates significant headroom for future growth
Growth headroom
SEA has significant headroom for future growth
Factors supporting SEA's long-term potential
Investors reset expectations on deals and exits
Private funding is at a 6-year low, driven by high cost of capital and issues across the funding lifecycle
Funding at a low
DFS remains the top investment sector due to high monetisation potential
DFS is the leading sector in deal value
Revalued expectations
Digital businesses in SEA need to demonstrate their value to investors
Investment criteria for SEA businesses
Rise of monetisationtowards financial sustainability
In recent years, digital businesses in the region have shifted their focus towards monetisation
Increased monetisation
Digital sectors are growing revenue by increasing take rates and expanding to adjacent revenue streams
Food delivery leads revenue growth
Revenue growth
Digital businesses have made significant strides towards financial sustainability
Revenue growth is outpacing GMV growth by 70%2
Digital financial services
Digital financial services (DFS) brings in an additional $30B of revenue for the digital economy
Healthy growth spurred by rapid DFS adoption in SEA
Engaging high-value users
In order to achieve profitability, high value users (HVU) have been prioritised; but long-term growth will come from a broader consumer base
Future digital spenders
HVUs demonstrate higher online purchase frequency and spends, and are also likely to grow their online spending faster
HVUs - the top 30% of online spenders account for 70% of SEA digital economy spend today
The potential of non-high-value users
The potential growth in online spend for non-HVUs is 1.9X that of HVUs, should their key barriers to online spending be addressed
Reasons that will draw non-HVUs to start spending online4
Bridgingthe digital economic divide
SEA consumers continue to enjoy the benefits of digitalisation - more so in metro cities than beyond
Digital economy growth
The digital economy is a major growth driver for the region
Digital economy growth will continue to outpace GDP growth across SEA
Driving digital participation
Infrastructure, digital literacy, and reach of services need to be improved for stable long-term digital growth beyond metro cities
Differences between metro and non-metro
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Notes and sources
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. The information included in this report is sourced as ‘Google, Temasek and Bain, e-Conomy SEA 2023’, unless otherwise specified.
The information in this report is provided on an ‘as is’ basis. This document was produced by Google, Temasek, Bain and other third parties involved as of the date of writing, and is subject to change. It has been prepared solely for information purposes over a limited period of time to provide a perspective on the market. It is not intended for investment purposes. All financial analysis is derived or estimated by Bain analysis using both non-Google proprietary and publicly available information. Google has not supplied any additional data for financial analysis, nor does Google endorse any financial analysis made in the report. Where information has been obtained from third party sources and proprietary research, this is clearly referenced in the footnotes. Projected market and financial information, analyses, and conclusions contained in this report should not be construed as definitive forecasts or guarantees of future performance or results. Google, Temasek, Bain, their respective affiliates or any other third party involved make no representation or warranty, either express or implied, as to the accuracy or completeness of the information in the report, and shall not be liable for any loss arising from the use of this report.
All dollar amounts in this report are in USD. Unless otherwise stated, all mentions of “Southeast Asia” or “SEA” in this report refer to these six markets: Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam.
Google commissioned Kantar to run the e-Conomy SEA consumer survey. The research was conducted in metro and non-metro cities across Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam. Data collection ran from 10/08/2023 – 01/09/2023 via a 25-minute online survey. The survey was conducted among a total of n=7,881 respondents aged 18-64 who had made a transaction in at least one of the verticals covered within a specified period of time. Each respondent was allocated to a maximum of two verticals, out of eight verticals covered, based on least fill quota. Bain and Temasek conducted interviews and a quantitative survey with SEA-focused venture capital investors in Jun-Aug 2023.
Note: Data up-to-date as of August 2023, Data based on a three-month rolling window.
Sources: Index combines Google Trends data based on multiple economic searches, both positive and negative, along real-time economic indicators, such as inflation rates, to estimate consumers’ confidence in a country’s economic outlook.Source: Bain analysis.
Sources: Data.ai; Bain analysis.
Notes: High value users defined as the top 30% of of consumers based on absolute online spend on digital services. Non-high value users are the remaining 70%. Based on total online spend per user, excluding digital financial services (DFS).
Source: Google-commissioned Kantar e-Conomy SEA consumer survey, ID, MY, PH, SG, TH, VN, 2023, online survey among 18-64 internet users and digital economy spenders, 10 Aug - 01 Sep 2023 (n >= 1,300 per country, n = 7,881 in total; HVU per country at least n >= 390, n=2,368 HVU in total). Question A2: “Please estimate how much you think you spend online in an average month across the below digital activities.”Source: Bain analysis
Notes: Metro is based on the weighted average across SEA capitals (Singapore as a whole, Bangkok, Kuala Lumpur, Manila, Jakarta, Hanoi). Drop-off points refer to the points to drop off delivery parcels to logistics companies and is a proxy to how well an area is served by digital services. Source: World Bank; Government statistics; UN; UNICEF; AIIB; Google Maps; Bain analysis.