Written in collaboration with
Written in collaboration with
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 Temasek insights, Bain analysis, Google Trends, data from research partners, expert interviews, and industry sources to shed light on the digital economy in Southeast Asia (SEA).
Executive Summary
Keeping growth momentum steady
- SEA sustains the growth momentum across core metrics
SEA’s digital economy is on track to surpass $300 billion in GMV—1.5 times our inaugural forecast 10 years ago. Both GMV and revenue are seeing steady growth of approximately 15% year over year, driven by deepening digital participation and new monetisation strategies, which include higher pricing, tiered offerings, and diversified revenue streams across key sectors.
- Video reinvigorates e-commerce; food close to profitability
Leading e-commerce players are delivering a significant GMV and revenue growth premium in a consolidating market. Video commerce now accounts for 25% of total e-commerce GMV. Food delivery is on the cusp of profitability as players look to raise average order value and expand into the restaurant dining space.
- Retail media surges as content boundaries blur
Retail media is rapidly gaining momentum, as an ecosystem-wide monetisation push lifts it to $3 billion. Entertainment formats are blurring, and short drama is a fast-emerging format that Chinese and local players are betting on to compete with global powerhouses.
- The digital financial services (DFS) ecosystem strengthens
All ASEAN-10 countries now have national QR systems and are seeing extremely strong adoption. Eight markets now offer cross-border QR interoperability. Lending businesses are managing risks by using transaction data for underwriting, while digital wealth platforms are starting to reach scale.
Rekindling investor interest
- A cautious uptick in private funding
Private funding grew 15% in the last 12 months from $6.8 billion to $7.7 billion. A tilt towards late-stage funding (around 80% of total funding in Series C to E+ vs. roughly 70% in the year before) reflects shifting investor priorities. DFS continues to garner the lion’s share of funding (45%–50%, up from about 30% in the year before).
- Investors turn their focus to AI
There are now approximately 700 active AI startups in SEA; about 30% of private funding in the last 12 months has gone towards AI. Of venture capital firms surveyed, 50% indicated that more than a quarter of their overall portfolio have AI as their core product; this is poised to grow to 71% in the next 12 months.
- Positive signs of exits are emerging around the world
Learning from the past, more companies are now focusing on profitability from an early stage. Positive signs of public market exits are emerging globally and in Asia-Pacific, as the volume of IPOs has risen across NASDAQ, HKEX, and SSE Star, among others. There is a robust pipeline of over 150 IPO candidates across Indonesia, Malaysia, and Singapore, despite the region trailing global markets in the first half of 2025.
Advancing into an intelligent economy
- Capitalising on SEA’s enthusiasm for AI
Fuelled by globally leading consumer interest, the digitally savvy population in SEA is rapidly adopting AI, creating a massive, untapped market. To capitalise on this opportunity, businesses must navigate the region's unique challenges, including fragmented regulations, low-cost labour, and the critical need to earn consumer confidence for decisions that go beyond daily conveniences.
- AI redefines the consumer journey from search to discovery
AI is reshaping the path to purchase, replacing traditional linear searches with a dynamic, AI-powered discovery process. Consumers are increasingly using tools like AI-powered search and multimodal inputs to answer more complex queries, requiring businesses to adapt their strategies to guide users from initial curiosity to the final purchase.
- Fostering consumer trust for AI-assisted decisions
Realising the full commercial potential of AI requires fostering consumer trust. Despite enthusiastic adoption of AI for daily conveniences, consumers remain cautious about delegating more significant decisions due to concerns around privacy, data security, and reliability. To deepen user confidence, businesses must build trustworthy AI systems that prioritise transparency and control.
- Tackling ASEAN’s nuanced regulatory and financial barriers
AI integration faces significant challenges from a fragmented regulatory environment across the region, which creates uncertainty and raises compliance costs. Furthermore, the high upfront cost of AI technology for businesses presents a major ROI challenge in a region characterised by relatively low labour costs, potentially slowing widespread adoption.
Mapping the AI transformation
- Commemorating 10 years of unprecedented growth
The SEA digital economy has grown from $40 billion GMV a decade ago to over $300 billion in 2025. More significantly, a decisive shift to monetisation in 2024 is forecast to propel revenue to $135 billion: an 11.2 times increase in a decade, overcoming challenges like Covid-19 and inflation.
- Transformational milestones over the past decade
SEA's digital economy has undergone a monumental transformation, beginning with an incredible wave of 200 million new users coming online. In doing so, they went beyond passive scrolling to fully embracing digital life, leading to a fundamental shift in regional commerce where 3 in 5 people now shop online and over 60% of all transactions are digital.
- Looking ahead: The next decade holds both promise and uncertainty
The decade ahead will be defined by the balance between powerful catalysts and significant hurdles. Growth will be driven by the acceleration of AI, the revival of capital markets, and greater ASEAN cooperation.
This momentum, however, faces a major headwind from global uncertainty. The decisive factor will be the wild card of regulatory choices, which can either unlock or inhibit the region's immense potential in this next phase.
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