- Food delivery GMV is expected to hit US$23 bil, with revenue approaching US$2.4 bil in 2025
- SEA emerging as a global AI leader, driven by a vibrant ecosystem of startups, adopters & investors
Google, Temasek, and Bain & Company have launched the tenth edition of the annual e-Conomy SEA report, ‘From Digital Decade to AI Reality: Accelerating the Future in Asean’. In a statement, the companies noted that, for the first time, the report has expanded its coverage from six markets to ten Southeast Asian nations — adding Brunei, Cambodia, Laos, and Myanmar — to offer a more holistic view of the region’s evolving digital economy.
With both Gross Merchandise Value (GMV) and revenue seeing steady growth of 15% year-on-year (YoY), the report predicts that Southeast Asia’s digital economy is on track to surpass US$300 billion (RM1.3 trillion) in GMV by 2025 — 1.5 times the inaugural forecast ten years ago.
Revenues are forecast to reach US$135 billion (RM563 billion) as profitability accelerates across the region. As the world’s fifth-largest economy, with a population of over 680 million, the report noted that Southeast Asia has undergone a remarkable digital transformation over the past decade. The region’s digital economy has shown resilience, leveraging successful monetisation strategies despite global headwinds such as Covid and inflation.
[RM1 = US$0.22]
The report highlighted key milestones over the decade, including 7.4x GMV and 11.2x revenue growth, US$120 billion in private funding invested, and the entry of over 200 million new internet users — accelerating adoption across sectors such as e-commerce and digital payments. Today, three in five people in the region shop online, and over 60% of all payments are digital.
Key findings from this year’s report include:
1. Southeast Asia’s digital economy sustains growth momentum through innovation and monetisation discipline
According to the report, e-commerce is picking up, with GMV and revenue projected to reach US$185 billion and US$41 billion respectively in 2025. This acceleration is driven by two key factors: the significant economies of scale of leading platforms, which create distinct competitive advantages, and the rapid expansion of video commerce. Video commerce now accounts for approximately 25% of total GMV — a trend fuelled by a high volume of lower-value transactions, the influence of trusted local creators, and seamless social-to-e-commerce integrations that convert user attention into sales with minimal friction.
- Food Delivery: The report noted that most food delivery platforms are now profitable or approaching profitability by building more sustainable business models. They have made significant progress in reducing their cost to serve through optimised logistics and streamlined operations in key metro areas. Food delivery GMV is projected to reach US$23 billion, with revenue nearing US$2.4 billion in 2025. The segment is diversifying its earnings with advertising revenue surging 60–90% YoY, alongside commissions from dine-in vouchers, loyalty subscriptions, and cloud kitchens.
- Transport continues to grow by offering tiered services and subscription bundles, while in-app advertising provides an additional revenue stream. Projections show GMV reaching US$11.5 billion and revenue climbing to US$1.9 billion in 2025.
- Online Travel, meanwhile, continues to grow, with GMV projected to hit US$51 billion and revenue set to reach US$24 billion in 2025, fuelled by high airfares and accommodation rates. The survey indicates that Indonesia, Malaysia, and Vietnam have boosted arrivals from China and India through expanded visa-free or e-visa schemes, recording double-digit growth in total arrivals in the first half of 2025. Japan is solidifying its status as a top destination for Southeast Asian travellers, while China is rapidly gaining ground.
- The survey states that Online Media is on track to hit US$34 billion in GMV in 2025. Advertising growth (16% YoY) is driven by the rise of retail media networks, increasing maturity of video commerce, and AI-powered ad formats. Gaming (6%) continues to expand its user base, particularly in Indonesia, while growth in the Video (15%) and Music (14%) segments continues, though slowing from their 2024 peaks.
- Digital Financial Services (DFS) is swiftly maturing beyond payments. Financial inclusion is expanding through embedded lending solutions targeting underserved segments, and greater regional connectivity and adoption. The report notes that ten Southeast Asian countries now use national unified QR systems, and eight nations have enabled cross-border QR interoperability. DFS growth is fuelled by digital lending — where ecosystem players leverage in-app data for underwriting — and a surging digital wealth segment, with several platforms now exceeding US$1 billion in Assets Under Management across six Southeast Asian markets.
2. A cautious uptick in private funding with shifts towards late-stage deals and DFS
According to the report, private funding is up 15% YoY to around US$8 billion, driven by investors focusing on late-stage deals and the DFS sector, which is drawing about half of total deal value. The increase in late-stage investments — the largest since the second half of 2023 — has been driven by both private equity activity and corporate investments. While early-stage funding continues to contract, growth-stage deployment stabilised YoY compared to H1’24.
Although the number of growth-stage investments fell YoY, the average deal size increased, reflecting discipline and greater concentration of capital in higher-quality businesses. Meanwhile, funding continues to diversify into nascent sectors, particularly software and services. Most investors expect funding to increase in Singapore, Vietnam, and Malaysia, with emphasis on software, services, AI, and deep tech.
This cautious uptick is underpinned by three key enablers: realistic entry valuations that have largely settled at sustainable levels; proven monetisation models where revenue growth keeps pace with GMV; and a clearer path to profitability for established digital players. The focus is now shifting to the fourth enabler — dependable exit pathways — which are showing positive signs and a healthy IPO pipeline in the region.
3. Southeast Asia is rapidly positioning itself at the forefront of the global AI transformation, driven by a thriving ecosystem of adopters, innovative startups, and major investors
The report notes that Southeast Asia is rapidly positioning itself at the forefront of the global AI transformation, driven by a thriving ecosystem of adopters, innovative startups, and major investors.
Consumer interest in AI topics is three times higher than the global average. Five countries — Singapore, Brunei, the Philippines, Indonesia, and Malaysia — already rank among the world’s top 20 for interest in multimodal AI. Three out of four users say AI-powered tools have helped them discover content and make tasks easier, while nearly half (45%) expect to save time on research and make decisions faster.
The region’s workforce is seizing the AI opportunity and actively developing their skills: 79% of workers said they have learned to use AI, and 43% report using it both personally and professionally. With over 4,600 MW of new capacity planned, Southeast Asia’s data centre capacity is set to grow by 180%, outpacing the 120% growth projected for the rest of Asia Pacific.
Additionally, AI is a bright spot for investors in Southeast Asia. Over the past twelve months, more than US$2.3 billion has been invested in over 680 AI start-ups, accounting for over 30% of private funding value in the first half of 2025. This momentum is further fuelled by major global players choosing the region as a new hotspot for cloud and data centre investments.
Sapna Chadha (pic), vice president for Southeast Asia and South Asia Frontier, Google said, “Surpassing the US$300 billion GMV milestone by 2025 — 1.5x our ambitious forecast from a decade ago — firmly validates that Southeast Asia’s potential is even greater than we imagined. Backed by strong fundamentals, robust macroeconomic conditions, and new consumer behaviours, the transformative impact of AI and the shift toward sustainable profitability are clear.”
“The future here will be defined by speed as the region harnesses its proven ability to seize the returns of this new age not in years, but in months. We remain deeply committed to partnering with Southeast Asia as it accelerates toward its next ambition: becoming a thriving intelligent economy.”
Fock Wai Hoong, head, Southeast Asia, Temasek said, “Funding levels in Southeast Asia’s digital economy have stabilised as investors continue to emphasise quality growth and efficient capital allocation over absolute capital deployment. Temasek remains committed to the region’s digital economy, deploying our capital to growth-stage businesses to help take proven business models from start-up to scale-up. Investors, regulators, and management teams must work together to drive sustainable growth, operations, and governance.”
Meanwhile, Florian Hoppe (pic), partner, Bain & Company said, “Southeast Asia’s digital economy has shown extraordinary growth and remarkable resilience, sustaining momentum despite periods of investor caution and a shifting macroeconomic landscape over the last decade. With GMV on track to surpass US$300 billion by 2025, the region’s ‘digital decade’ has built a strong foundation to chart the next phase of value creation.”
“The real opportunity now lies in how businesses harness AI as a catalyst for impact while balancing the region’s structural realities. As markets consolidate and investor confidence returns, the next wave of growth will be more focused, efficient, and innovation-led.”
Singapore: A pillar of resilience and global AI governance
Singapore’s digital economy continues to demonstrate maturity and leadership, setting regional standards for technology governance while navigating global uncertainty. Its GMV is projected to reach US$29 billion in 2025, up 7% from 2024, driven by strong momentum across key sectors. Transport & Food is expected to grow 12% to US$6 billion, while Online Media is set to surge 13% to US$3.4 billion. Meanwhile, local commerce is showing accelerated adoption of video commerce, with sellers and stores rising 125% year-on-year to 80,000, and transaction volume jumping 30% year-on-year to 45 million.
The report noted that, as a mature financial hub, Singapore’s DFS sector is steadily gaining ground. Digital Lending is forecast to grow 12% to US$30 billion in loan book balance, while Digital Wealth is projected to rise 22% to US$44 billion in 2025 — driven by licensed digital banks capitalising on strategic ecosystem partnerships.
Singapore also remains the leading regional AI hub, having secured US$1.31 billion in private AI funding — the highest among SEA-6 countries. This strong economic performance is marked by a notable 55% funding growth (H1 2025 vs H2 2024). This resilience, combined with the government’s focus on worker protections and AI governance, cements Singapore’s position as a vital regional hub for technology and finance.
“Singapore’s strength lies in its dual focus: driving relentless digital innovation while building a robust framework for AI governance. As a global hub, its pioneering approach to responsible AI and its stable, mature ecosystem are setting an important benchmark for the rest of Southeast Asia. This ensures that the next wave of digital growth is not only fast and far-reaching, but also safe, inclusive, and sustainable for all,” Sapna Chadha said.
Fock added, “Singapore is strengthening its role as a tech and financial hub by emerging as a centre for AI innovation, attracting companies across Southeast Asia to establish their regional or global operations here. Ongoing efforts to enhance regional cooperation and improve capital market conditions in Singapore will help ensure that Southeast Asia’s AI ambitions continue to be realised.”
Hoppe concluded, “Singapore continues to anchor Southeast Asia’s digital economy. Its early momentum in scaling AI capabilities can unlock a broader regional opportunity to turn transformation into lasting economic value and build towards another decade of growth. Importantly, it can also play a key role in unlocking funding and improving the exit environment for the region.”
