South-east Asia’s digital economy revenue set to hit US$100 billion in 2025: e-Conomy report

[SINGAPORE] The digital economies of South-east Asia are projected to hit a revenue of US$135 billion in 2025, according to the e-Conomy report by Bain, Temasek and Google.

This year’s report includes Laos, Brunei, Cambodia and Myanmar’s contribution to the digital economy.

Without digital financial services, the region’s digital economy revenue is set to hit US$100 billion.

Without the four new markets, 2025 digital economy revenue would be at US$99 billion, a 14 per cent jump from US$87 billion in 2024.

The region’s gross merchandise value (GMV) is also set to grow to US$305 billion in 2025, or US$299 billion without the inclusion of the four new markets. This is a 15 per cent increase from US$260 billion in 2024.

E-commerce still makes the bulk of GMV and revenue for South-east Asia, with travel coming in second. Online media comes in third for digital economy revenue.

Food delivery is shifting from luxury to mass market, with revenue for South-east Asia excluding the four new markets growing 18 per cent from US$2 billion in 2024 to US$2.4 billion in 2025. Revenue for the entire region is expected to hit the forecast of US$2.4 billion in 2025.

Players in food delivery are either profitable or approaching profitability on the back of a focus on a broader customer base, and spinning up adjacent revenue streams such as advertising, loyalty programmes and commissions on dine-in vouchers.

The revenue growth for advertising for food delivery players is estimated to grow between 60 and 90 per cent in 2025, compared with 2024. Players are now establishing stronger value chain control, looking to monetise their share of the consumers’ wallet, and pulling all their levers for internal efficiencies.

“That can be advertising, it can be some of the financing aspects, it can be how these products are shipped and moved,” said Florian Hoppe, partner at Bain & Company.

On the e-commerce front, video commerce is projected to make up 25 per cent of all e-commerce GMV in 2025, up from less than 5 per cent in 2022. Product categories for video commerce now go beyond fashion and beauty to even electronics, home furnishings and food.

Payments have continued to drive digital financial services in South-east Asia with gross transaction value (GTV) rising 19 per cent from US$1.2 billion in 2024 to an estimated US$1.4 billion in 2025.

With inclusion of the four new markets, GTV for payments is forecast to hit between US$2.4 billion and US$2.6 billion in 2030.

This growth in payments has been underpinned by the adoption of national unified QR systems. Cross-border QR payment interoperability has also advanced significantly, with nine countries now signatories to the Regional Payment Connectivity initiative.

On the funding front, fund flows have stabilised in 2024, with private funding value flat at US$8 billion, same as 2023. Deal count, however, has dropped from 883 in 2023 to 575 in 2024, as deals shift towards later-stage companies. But deal sizes have increased.

Later stage startups in Series D and E have rebounded in the first half of 2025, raising US$800 million compared with US$100 million in H1 2024 and US$400 million in the second half of 2024.

Digital financial services continue to take the bulk of funding in 2024, with nascent sectors next with 41 per cent of the funding.

There are positive signs of public market exits, with stock exchanges having a healthy initial public offering (IPO) pipeline.

“We understand that Indonesia and Malaysia both have more than 60 companies in their IPO pipeline, while the SGX has announced roughly 30 plus IPOs in preparatory phase,” said Hoppe.

Singapore is emerging as an artificial intelligence (AI) hub, getting the bulk of AI funding and startups in the region. Coupled with government initiatives to develop a skilled AI workforce and attracting talent, the Republic is working towards establishing itself as a leading centre for AI innovation and development.

“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. Importantly, it can also play a key role in unlocking funding and the exit environment for the region,” added Hoppe.