Southeast Asia’s digital economy is on track to exceed $300 billion in Gross Merchandise Value (GMV) by 2025, according to the 10th edition of the e-Conomy SEA report. Revenues are projected to reach $135 billion as profitability grows across the region.

The report, released by Google, Temasek, and Bain & Company, expanded coverage to ten Southeast Asian nations, including Brunei, Cambodia, Laos, and Myanmar, for a more complete view of the region’s digital transformation. Over the past decade, the digital economy has achieved 7.4x GMV growth, 11.2x revenue growth, attracted $120 billion in private investment, and added more than 200 million new internet users.

E-commerce, Food Delivery, and Online Services Drive Growth

E-commerce GMV and revenue are expected to reach $185 billion and $41 billion, driven by economies of scale of leading platforms and the rapid growth of video commerce, which now accounts for about 25% of total GMV.

Food delivery platforms are nearing profitability by optimizing logistics and operations in key metro areas. GMV for food delivery is projected at $23 billion, with revenue approaching $2.4 billion. The sector is also generating income from advertising, dine-in vouchers, loyalty subscriptions, and cloud kitchens.

Transport services are expanding through tiered offerings, subscription bundles, and in-app ads, with GMV projected at $11.5 billion and revenue at $1.9 billion in 2025. Online travel is expected to reach $51 billion in GMV and $24 billion in revenue, supported by higher airfares and accommodation rates. Visa-free and e-visa schemes have increased arrivals from China and India, while Japan and China are becoming key destinations for Southeast Asian travelers.

Online media is projected to reach $34 billion in GMV in 2025. Advertising growth, rising retail media networks, video commerce, and AI-powered ad formats are driving this expansion. Gaming, video, and music segments continue to grow, though slower than their 2024 peaks.

Digital Financial Services and Private Funding Trends

Digital Financial Services (DFS) are expanding beyond payments, with digital lending and wealth management reaching new levels. Ten Southeast Asian countries now use national unified QR systems, and eight have cross-border QR interoperability.

Private funding increased 15% year-on-year to around $8 billion, with a focus on late-stage deals and DFS, which account for about half of total deal value. Growth-stage investments stabilized, while average deal size increased. Funding is also shifting to software and services, AI, and deep tech, with Singapore, Vietnam, and Malaysia leading investor interest.

AI Adoption Accelerates Across Southeast Asia

Interest in AI across Southeast Asia is three times higher than the global average. Singapore, Brunei, Philippines, Indonesia, and Malaysia rank among the world’s top 20 for multimodal AI interest. Three out of four users report that AI tools help them discover content and make tasks easier, while 45% expect to save time on research and decision-making.

Data center capacity in the region is set to grow 180%, faster than the 120% growth projected for the rest of the Asia Pacific. Over $2.3 billion was invested in more than 680 AI startups in the past year, accounting for over 30% of private funding value in H1 2025.

Singapore Leads as Regional AI and Digital Economy Hub

Singapore continues to lead in digital economy maturity and AI governance. Its GMV is projected at $29 billion in 2025, up 7% from 2024. Transport and food services are expected to grow 12% to $6 billion, while online media is projected to rise 13% to $3.4 billion. Video commerce adoption is accelerating, with sellers and stores increasing 125% year-on-year to 80,000, and transaction volume up 30% to 45 million.

Singapore’s DFS sector is growing, with digital lending forecasted at $30 billion and digital wealth (AUM) projected at $44 billion. The country also secured $1.31 billion in private AI funding, the highest among SEA-6 countries, marking a 55% increase in H1 2025 compared to H2 2024.

“Singapore’s strength lies in its dual focus: driving relentless digital innovation while building a robust framework for AI governance,” said Sapna Chadha, Vice President for Southeast Asia and South Asia Frontier, Google.

“Singapore is strengthening its role as a tech and financial hub by emerging as a centre for AI innovation, attracting AI companies across Southeast Asia to establish their regional or global operations here,” said Fock Wai Hoong, Head, Southeast Asia, Temasek.

“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 into another decade of growth ahead,” said Florian Hoppe, Partner, Bain & Company.

PHOTO: FREEPIK

This article was created with AI assistance.