South Asian internet economy to cross $100 billion mark

As stuck at home consumers go online to shop after the pandemic, South Asia’s internet economy is all set to cross the $100 billion mark this year, said a recent report.

According to the report, South Asia’s internet economy will hit $105 billion this year.  The report said that the region added 40 million new internet users this year, taking the total to 400 million.  That implies 70% of the region’s population is now online.

The report while citing investment pundits, said “The coronavirus has brought about a permanent and massive digital adoption spurt.”

Moreover, the report said that Southeast Asia’s internet economy expanded 5% from 2019. E-commerce grew 63% to reach $62 billion in 2020, to become the largest vertical this year, whereas the travel sector contracted 58% to $14 billion.

Online retailers have emerged as winners from coronavirus lockdowns as people prefer to shop from their homes instead of making a trip to stores amid worries over a resurgence in infections.

The online industry of the South Asian region is poised to triple to $309 billion in gross merchandise value by 2025, nearly in line with the $300 billion forecasts made last year. With an 11% increase in online users, Southeast Asia is one of the world’s fastest-growing internet markets. That compares with around 4.7 billion internet users worldwide, up 7.4% from a year ago, according to wearesocial.com, a digital monitoring service.

In addition to this, the report said that the investors still have sufficient capital to deploy but are focusing more on companies’ path to financial gains.

This is the first time that such estimates in the annual South-east Asia e-Conomy report by Google, Temasek and Bain & Co had not been revised upwards to reflect the growth of the Internet economy. This year, the region’s Internet economy is expected to hit US$100 million in gross merchandise value (GMV) – which measures the total value of merchandise sold – leaving it roughly flat from a year before.

Covid-19 has proven difficult for certain sectors such as ride-hailing, online travel and lending. Unsurprisingly, online travel was the worst hit, and nosedived 58.8 per cent to US$14 billion in GMV for 2020. (ToI)