Post-Pandemic Slowdown in Southeast Asia's Digital Services Adoption as Community Activities Return to Normal

A recent report by Google, Temasek, and Bain & Company reveals that Southeast Asia's digital economy grew faster than expected in 2022, reaching an estimated US$200 billion in gross merchandise value (GMV).

This achievement is three years ahead of previous projections and represents a 20% increase compared to the US$161 billion recorded in the previous year.

The region's digital economy is projected to reach US$330 billion by 2025. The six major economies included in the report are Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. The report does not cover the populations of Brunei, Cambodia, Laos, and Myanmar, as well as Timor-Leste and Papua New Guinea.

This growth aligns with the increasingly massive adoption of digital services in Southeast Asia. The report highlights that 100 million additional internet users have come online in the past three years.

E-commerce contributed the most to Southeast Asia's digital economy, estimated at US$131 billion. E-commerce adoption is nearing saturation among urban digital users in Southeast Asia.

However, the adoption of digital services has slowed down post-pandemic. In 2021, e-commerce adoption reached 75%, while in the first half of 2022, it was only 19%.

Several digital service adoptions were minimal in the first half of 2022, such as online groceries and video-on-demand. The report attributes this to consumers returning to their pre-pandemic habits and activities. In fact, music-on-demand service adoption in the first half of 2022 was 0%, compared to 52% in 2021.