Digital Economy creating waves

Digital economy is the economic activity that is derived from billions of everyday online connections among people, businesses, devices, data, and processes.

For the first time, the 2030 forecast has projected that the digital economy could reach a value of $1 trillion by the end of the decade.

The Growth in the digital economy would see Southeast Asia help define the future of technology globally. Technology has been critical in helping Southeast Asians get through the COVID-19 pandemic.

A report states, the size of the digital economy is in terms of gross merchandise value or the sum of goods sold through customer-to-customer platforms. The report covers Indonesia, Malaysia, Philippines, Thailand, Vietnam, and Singapore, which together account for roughly 90% of Southeast Asia’s total population.

India and Southeast Asia have both grown rapidly in the last decade, thanks to the acceleration of digital adoption and rising consumer incomes. Double-digit growth is forecast for all six countries this year with the Philippines leading the pack at a compounded annual rate of 93%. Last year, India emerged as the third-largest startup ecosystem in the world, after the USA and China. Southeast Asia, meanwhile, is on track to become a $1 trillion digital economy by 2030. The largest economy, Indonesia, could become twice the size of the regional market today.

The upbeat forecast for the region bodes well for countries that are gearing up to use digitalization as the linchpin for their economic recovery from the COVID-19 crisis. Lockdowns and mobility restrictions drove more people in the region to go online to buy food and other essentials, to pay their bills, to continue their studies or work, and even for entertainment. They include those that used such digital services for the first time.

Southeast Asians have embraced the digital lifestyle. Eight in 10 internet users in the region have made an online purchase at least once. The report also reveals that today, 90% of these merchants accept digital payments, and one in three believe they wouldn’t have survived the pandemic without going online.

The market in India is seeing increasing consumption power, supportive regulations and high talent density. Founders today are leveraging this to solve a diverse range of problems with the aim to create value for millions of people, both in India and for the world. And many large companies with regional or global footprints are expected to emerge from this region in the decade to come.

S Mohini Ratna, Editor, VARINDIA