Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

Southeast Asia internet economy forecast cut on economic headwinds

Economy Oct 27, 2022 05:11AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: A man walks past the sign of "Google for India", the company's annual technology event in New Delhi, India, September 19, 2019. REUTERS/Sankalp Phartiyal 2/2
 
GOOGL
-2.75%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GOOG
-3.29%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Chen Lin

SINGAPORE (Reuters) - Southeast Asia's internet economy is expected to be worth $330 billion by 2025, though this a downgrade from a previous forecast due to economic uncertainty and more pressure on tech companies to make a profit, an industry report said on Thursday.

The annual report, by Alphabet (NASDAQ:GOOGL)'s Google, Singapore state investor Temasek Holdings and global business consultants Bain & Company, trimmed its forecast for 2025 from $363 billion in last year's report.

"Amidst global macroeconomic headwinds, reduced disposable income, sky-rocketing prices, and lower product availability, there is tapering of demand from Southeast Asia consumers," the trio said in a joint release.

The region of 11 countries is one of the world's fastest growing internet markets, due to a young population, widespread smartphone usage and urbanisation, and a growing middle class.

The report, which covers Indonesia, Thailand, Vietnam, Singapore, Malaysia, and the Philippines, is still upbeat on this year and sees the internet economy growing 20% to $200 billion, three years earlier than anticipated in an inaugural report in 2016.

All six countries are expected to post double-digit growth between now and 2025, with Vietnam having the fastest growing digital economy this year at 28%.

Indonesia, the region's most populous nation, saw its digital economy grow 22% to $77 billion this year, contributing to about 40% of Southeast Asia's total online spending.

On the tech investment front, while early-stage deals are continuing with strong momentum, late-stage deals are seeing "more pronounced dips" and a pause in plans to go public.

Global investors are getting increasingly cautious amid rising interest rates and plummeting stock valuations, the report said, with initial public offering prospects set to grind to a near halt for the next 12 to 18 months.

The digital financial services sector is expected to overtake e-commerce to become the region's top investment sector, with payments taking up the majority share of the deals.

In the first half of 2022, the sector saw a record funding of around $4 billion.

Meanwhile, Vietnam, Indonesia and Philippines are likely to attract more investors in the longer-term, the report said.

"Universally investors generally expect deal activity to recover from 2024 onwards," said Fock Wai Hoong, Deputy Head of Technology & Consumer and Southeast Asia at Temasek.

Venture capitalists had $15 billion on hand to sustain deals at year-end 2021, the report said.

Southeast Asia internet economy forecast cut on economic headwinds
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Bubba Born
Bubba Born Oct 27, 2022 6:33AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Don't hold your breath. The economy in SE Asia is China dependent and China has Chinese sized problems.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email