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The DIGITAL economies in Vietnam and Indonesia achieved double-digit growth despite headwinds from the Covid-19 pandemic, although Singapore’s fell 24 percent to $ 9 billion.
According to the 2020 Southeast Asia e-Conomy report by Google, Temasek and Bain & Co, Vietnam’s internet economy grew by 16% to reach $ 14 billion in gross merchandise value (GMV), while that of Indonesia grew 11% to reach US $ 44 billion.
However, Singapore’s internet economy fell around 24 percent to $ 9 billion, from $ 12 billion in 2019. This is due to a 70 percent drop in the company’s online travel vertical. city-state compared to the previous year, which represented almost half of its GMV.
Other sectors of Singapore’s internet economy (excluding travel) grew by around 20 per cent on average from last year, mainly driven by an 87 per cent rise from companies in the e-commerce industry.
According to the report, Singapore will remain a “regional facilitator of growth”, despite GMV’s decline in the short term, as it is the regional headquarters of multiple unicorns.
The Republic is home to the largest number of unicorn venues in Southeast Asia, including Lazada and Sea Ltd. This has helped establish Singapore as a regional hub for multiple sectors like fintech, and build a “strong startup ecosystem,” said the report. .
Singapore registered 325 deals in the first half of 2020, with a total deal value of $ 2.5 billion.
The city-state’s Internet economy is expected to reach $ 22 billion by 2025; while the Indonesian digital economy is expected to reach 124 billion dollars, with a growth of 23%. The Philippines is expected to have the highest CAGR at 30 percent, reaching US $ 28 billion by 2025.
Across Southeast Asia, consumers, as well as small and medium-sized businesses, are embracing digital financial services “like never before,” according to the report.
About 40 million more people in the region have joined the internet this year amid physical disruptions during the pandemic, compared to 100 million during the previous four years. This pushes the total number online, which was just about 260 million five years ago, to 400 million, or 70 percent of the region’s population.
Today’s consumers have been spending more time online since the locks began, with the average time spent online for personal use each day at 4.7 hours, at least an hour more each day compared to before.
With a growing online population, strong fundamentals, increased online offering and a supportive ecosystem, the long-term overall outlook is now stronger than ever, according to the report. Many users have started moving online for food delivery, groceries, education and entertainment, and 94 percent of these new users are unlikely to return.
However, challenges remain. Talent remains a critical impediment to the growth of the Internet economy, said the report, which may be held back due to a shortage of workers with the right skills.
“There is an urgent need and opportunity to retrain and upgrade workers so they can find work in the growing sectors of the Internet amid the difficult work environment.”
Other factors that could be potential roadblocks – Internet access, consumer confidence, financing, payments and logistics – have made significant progress over the previous year, according to the report.
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