Tag: Temasek

Kuala Lumpur, Malaysia – Malaysia’s digital economy is poised to reach $31 billion in Gross Merchandise Value (GMV) in 2024, an increase of 16% from 2023 according to the latest e-Conomy SEA 2024 report by Google, Temasek, and Bain & Company. In it, it stated that travel rebound and E-commerce underpin growth, with Malaysia recording significant investment in AI infrastructure and amongst top ten globally driving AI search interest.

According to the report, Malaysia’s digital economy has progressed towards profitability while maintaining double-digit growth for GMV. Deeper digital participation among users, effective monetisation strategies, and the recovery of pandemic-impacted sectors are expected to drive continued growth.

E-commerce remains the largest contributor to the digital economy. The sector grew by 17% to $16 billion GMV in 2024, as major ecommerce platforms reinvest in GMV growth, paired with the rise of video commerce. 

Meanwhile, online travel posted the fastest GMV growth compared to other sectors at 19% year-on-year (yoy) to reach $8 billion GMV in 2024 as Malaysia’s international tourism is experiencing a robust recovery and expected to exceed pre-pandemic levels in 2024. Spending on overseas travel has jumped 330% since 2020 as Malaysians take advantage of opportunities to travel abroad, though primarily in the Asia Pacific region, which accounted for 38% of outbound expenditures.

Speaking of travel, SEA visitors account for almost half (49%) of Malaysia’s inbound traveller spend, driven by several factors including improved air connectivity, strategic airline partnerships and a favourable exchange rate.

On another sector, food delivery and transport has grown 10% from $3 billion GMV in 2023 and to reach $4 billion in 2024. This steady growth momentum is driven by the recovery of commuter demand and international travel. 

Food delivery platforms are increasingly focused on boosting profitability through new revenue streams like tiered delivery options and subscription plans, while competitive intensity remains high in ride hailing due to new player entry and expansion of existing players.

Furthermore, online media in Malaysia has shown consistent growth with its GMV expected to grow 10% from $3 billion in 2023 to $4 billion in 2024, driven by the increasing popularity of digital content, games and streaming services. 

Lastly, digital financial services continues on an upward trajectory as various Malaysia’s digital banks offer compelling features and ease of access, contributing to the rapid growth of the DFS landscape. Digital payment is expected to reach $172 billion in 2024, a 5% increase from 2023, while digital wealth is expected to significantly expand and  reach an assets under management (AUM) of approximately $80 billion by 2030.

It is worth noting that artificial intelligence (AI) is transforming Malaysia’s digital landscape as the government continues to place emphasis on responsible AI development and deployment through its Malaysia AI Roadmap 2021-2025 and upcoming National AI Office (NAIO) launch. 

Malaysia is also among the Top 10 countries globally driving AI search interest, especially in the education, marketing and gaming sectors, with Kuala Lumpur, Putrajaya, and Selangor leading the nation in AI interest.

As more companies deploy AI to innovate, improve efficiencies and customer experiences as well as bring new ideas to life, the demand for AI infrastructure will continue to grow. To meet this demand, Malaysia has recorded a large AI infrastructure investment among SEA countries at $15 billion in H1’24. The report estimates Malaysia’s current data center capacity at 120MW and expects that to expand 5X over the coming years. 

Malaysia has seized the AI opportunity through strategic initiatives like KL20, which will bolster the startup ecosystem through incentives for high-tech industries, tax exemptions on foreign investments and a billion dollars in government funding for startups in Malaysia and the region.

YB Tuan Gobind Singh Deo, Minister of Digital, stated, “As Malaysia assumes the ASEAN Chairmanship next year, we aim to be a regional champion for digital policies that are forward-looking and transformative, to promote a regulatory environment that encourages technological advancement and to nurture cross-border collaboration. The e-Conomy report serves as a powerful validation of our efforts and is not merely a report; it is a testament to the immense potential that lies ahead for Malaysia’s digital future. It is a call to action for all of us – the government, the private sector, and the people of Malaysia – to collaborate and realize our nation’s full digital potential. Let us seize this opportunity and together, build a digitally empowered Malaysia that is prosperous, inclusive, and sustainable.”

Meanwhile, Farhan Qureshi, country director for Google Malaysia, said, “We have been seeing a consistent strong growth of Malaysia’s digital economy and this year is another strong testament of the potential of Malaysia’s digital economy. With the region’s focus on AI, it’s encouraging to see the country’s leaders are putting AI and semiconductors in the country’s priority list. At Google, we are committed to further support the growth of Malaysia’s digital economy by accelerating the local workforce with AI-ready skills and tools. From equipping youths with future-ready skills in AI through Google Career Certificate scholarships to deploying Google Workspace for public officers, we are dedicated to ensuring Malaysia remains at the forefront of the digital age.”

Amanda Chin, partner at Bain & Company, commented, “Southeast Asia’s digital economy continues to do well, with continued double-digit GMV and revenue growth and a surge in profitability across sectors led by key players. Likewise in Malaysia, we see a healthy digital economy driven by e-commerce, online travel and digital financial services. As Malaysia’s DFS sector embraces digital disruption, new technologies such as AI are poised to accelerate growth. To fully harness the transformative potential of Generative AI, businesses must advance beyond experimentation and invest in foundational elements—aligning AI initiatives with core business objectives to address real-world problems and create tangible value, strengthen AI talent, and build scalable, adaptable infrastructure for sustained growth.”

Lastly, Geia Lopez, head of data, insights, and international growth at Google Southeast Asia, stated, “Investments in AI infrastructure and growing interest of Malaysians in AI technology signal a promising future for the country’s digital economy. As the digital landscape evolves, driven by strategic government initiatives, it is essential to prioritize digital security to safeguard data, maintain trust, and ensure the sustained progress of the digital sector.”

Singapore—The latest ‘e-Conomy SEA report’ from Google, Temasek, and Bain & Company has been recently released and highlights that in 2024, the digital economy will reach $263b in Gross Merchandise Value (GMV), a 15% increase over last year. Revenues have also grown 14% and are projected to reach $89b in 2024. The report suggests that the digital economy can achieve both profitability and growth in tandem, marking a significant step towards achieving sustainable economic value.

Why SEA is primed for AI-powered acceleration

Southeast Asia is quickly becoming a global center for AI innovation and adoption. With substantial investments in AI infrastructure and a dynamic ecosystem of startups and developers, the region is on track to harness AI’s transformative potential across a wide range of industries. 

In the first half of 2024 alone, SEA attracted over $30b in AI infrastructure investments. Additionally, consumer interest in AI solutions is surging, with AI-related searches increasing 11-fold in the past four years. The region’s young, growing population, high levels of digital literacy, and widespread smartphone usage make it an ideal market for AI-powered products and services. 

From AI-driven travel planners to generative AI-based fraud detection, AI is delivering value across SEA’s digital economy, with applications spanning various industries. Pro-innovation policies that encourage AI growth and responsible governance will further expand opportunities within the region’s digital economy.

From transport, e-commerce, and online travel–these are the sector redefining SEA’s digital economy

After years of investment and development, leading players in the region’s digital economy are now progressing toward profitability while maintaining strong double-digit growth in both gross merchandise value (GMV) and revenue. Continued growth is expected to be driven by deeper digital engagement among users, effective monetisation strategies, and the recovery of sectors affected by the pandemic. E-commerce has also regained momentum, fueled by the rise of video commerce.

E-commerce, projected to reach $159b in GMV by 2024, is now primarily driven by existing customers, who contribute up to 70% of its growth. This marks a shift from previous years when first-time shoppers were the main drivers. Established players are reinvesting to boost GMV and defend their market share, as international competitors disrupt the market. Revenue is expected to increase 13% year-on-year (YoY) to $35b in 2024.

Meanwhile, video commerce has rapidly grown to account for 20% of e-commerce GMV, a significant jump from less than 5% in 2022. This trend is reshaping the e-commerce landscape in Southeast Asia, transforming the consumer shopping experience. From live shopping events to content created by influencers, video has become an essential component of online shopping.

Food delivery is also gaining traction as dining-out habits stabilize and new monetization avenues, such as in-app advertisements and subscriptions, emerge. Revenue in this sector is forecasted to rise by 54% YoY to $1.7b in 2024, while GMV is set to grow by 7% to $19b. Platforms are experimenting with strategies for future profitability, such as improving restaurant visibility and using AI to optimize operations.

In another industry seeing growth, the transport sector has surpassed pre-COVID levels, with revenue expected to grow by 36% YoY to $1.5b, driven by increased demand and strategic pricing. GMV is projected to rise by 18% to $9b. Despite inflationary pressures, consumer demand remains strong due to the expansion of established players into second-tier cities and rural areas, along with aggressive promotions by new entrants seeking user growth.

Online travel is outpacing the broader digital economy in terms of Gross Travel Bookings (GTB) growth, fueled by intra-regional travel within Asia-Pacific. Higher airfares and a growing preference for luxury travel options are expected to push GTB to $46b in 2024, a 21% YoY increase, while revenue is set to grow 18% to $20b. While direct booking channels remain dominant, online travel agencies continue to successfully monetise their core services as well as adjacent offerings, such as financing and insurance.

Meanwhile, online media is on track for significant growth, with GMV projected to rise to $30b, an 11% YoY increase. Video-on-demand and gaming are key drivers, with SEA developers gaining recognition in casual gaming and hyperlocal content. Advertising remains a reliable revenue stream, while hybrid models incorporating in-app purchases, subscriptions, and ads are becoming increasingly popular to cater to diverse player segments. The rise of gaming influencers has fueled a thriving creator ecosystem, with livestreaming becoming a key tool for facilitating real-time interaction between sellers and consumers.

Lastly, Digital Financial Services (DFS) are expanding rapidly, with revenue expected to grow by 22%, from $22b in 2022 to $33b in 2024. Digital payments and lending, which make up more than 90% of DFS revenue, are the primary growth drivers. E-wallets have become widespread, partnering with major payment card networks, while QR code usage continues to rise. 

It’s worth noting that a generational shift in investor behaviour is reshaping the wealth management landscape, a trend that is likely to persist as more merchants accept digital payments, risk assessment improves, and consumers increasingly seek online solutions for insurance and wealth management.

Increase in investor confidence in SEA’s long-term potential

Despite the ongoing challenges in the funding landscape, investors have demonstrated cautious optimism, channelling nearly 50% of their investments into emerging sectors. Although the exit environment remains difficult, early-stage companies in Southeast Asia have made substantial strides toward profitability. There is also a growing emphasis on fostering cross-border collaborations and improving IPO regulations to enhance capital market conditions.

Last year, the report highlighted four key factors to revitalise the funding landscape: realistic entry valuations, proven monetisation models, a clear path to profitability, and reliable exit strategies. While the first three have been successfully achieved, creating dependable exit pathways is still a work in progress due to the continued challenges in capital markets.

Singapore continues leading SEA’s increased appetite in AI products, services

Singapore’s digital economy has shown impressive resilience and is expected to reach $29b in GMV by 2024, marking a 13% increase from 2023. E-commerce has bounced back, growing from $8b in GMV in 2023 to $9b in 2024, while sectors like online media and travel have experienced double-digit growth, driven by strong infrastructure and pro-business policies.

Singapore ranks among the top 10 countries globally in terms of interest in AI-related topics, with sectors such as education, marketing, and travel leading AI search trends. There is a high demand for mobile apps featuring AI capabilities, including content creation tools, photo editing apps, and AI-powered virtual assistants. 

AI has also played a pivotal role in boosting Singapore’s tourism industry, enabling chatbots to provide personalised recommendations, analyse visitor data to optimise marketing strategies, and enhance visitor experiences through interactive exhibits and customised guides.

To meet the growing demand for AI infrastructure, investments in AI-ready data centers reached $9b in Singapore during the first half of 2024, second only to Malaysia, which attracted $15b in similar investments.

Digital Financial Services (DFS) have also become a key driver of growth, with digital payments and wealth management leading the way. Singapore’s status as a regional financial hub has drawn substantial venture capital and private equity investment. To stay competitive, the Singapore Exchange (SGX) has introduced initiatives to improve exit options and attract investor capital and IPOs. Singapore’s favourable business environment, political stability, and tax incentives have further strengthened its position as a leading economic hub.

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For Sapna Chadha, vice president for Southeast Asia and South Asia Frontier at Google, Southeast Asia’s digital economy is rapidly evolving as businesses adopt innovative strategies to achieve profitability, fostering a more sustainable and resilient ecosystem. 

“The rise of video commerce is supercharging e-commerce growth, with live shopping and creator-led content reshaping how people discover and buy products. Southeast Asia is emerging as a global hub for AI innovation and adoption. With significant investments in AI infrastructure and a thriving ecosystem of startups and developers, the region is poised to unlock the transformative power of AI across various sectors,” she said.

Meanwhile, Fock Wai Hoong, head of Southeast Asia at Temasek remarked how it is encouraging that SEA’s digital businesses are now focusing on achieving the appropriate balance between growth and profitability.

“Investors have also started looking for the next wave of growth by investing in nascent sectors such as software and services as well as AI, demonstrating confidence in the long-term potential of SEA’s digital economy. Temasek remains committed to deploying catalytic capital to the region’s digital economy to achieve sustainable and inclusive growth so that every generation prospers,” he said.

Lastly, Florian Hoppe, partner at Bain & Company stated that Southeast Asia’s digital economy continues to do well, with continued double-digit GMV and revenue growth and a surge in profitability across sectors led by key players. He also remarked how the region is also attracting significant AI investment, with over $30b committed to AI infrastructure in the first half of 2024.

“To fully harness the transformative potential of Generative AI, businesses must advance beyond experimentation and invest in foundational elements—aligning AI initiatives with core business objectives to address real-world problems and create tangible value, strengthen AI talent, and building scalable, adaptable infrastructure for sustained growth,” he said.

Kuala Lumpur, Malaysia – The 8th edition of the e-Conomy SEA report by Google, Temasek and Bain & Company has noted that domestic demand will drive economic growth in Malaysia with household spending, employment and wages on the rise. It also noted that online travel is growing 49% YoY – fastest of all the digital economy sectors – reaching $4b in gross merchandise value (GMV).

According to the report, Malaysia has the fastest-growing transport and food delivery sector in SEA. The sector grew 16%, boosted by Malaysian commuters’ return to offline activities and the continued preference for food delivery. 

It also added that even though foot traffic in malls has recovered to pre-pandemic levels and the food and beverage industry is experiencing an uptick, Malaysian consumers have held onto the digital habits that make their lives easier, such as food delivery and e-commerce. 

Meanwhile, e-commerce growth is flattening after growing 4% between 2021 and 2022 from pandemic-driven growth, but it remains Malaysia’s biggest digital economy sector at $13b, accounting for 57% of the total GMV. E-commerce is seeing high adoption in Kuala Lumpur and Selangor. 

However, there is a persistent gap between demand and supply in other areas of Peninsular Malaysia and East Malaysia, which presents an opportunity for e-commerce players to expand in those areas.

In terms of digital financial services (DFS) adoption, the irreversible offline-to-online behavior shift continues to drive growth in DFS adoption, and cash is no longer king with QR codes and other forms of digital payments becoming ubiquitous. Digital payments are the biggest value driver within the DFS categories in Malaysia – $165b GTV in 2023 – boosted by the government’s support for digital payments adoption and distributing benefits to lower-income communities through e-wallets. This has placed Malaysia as the 2nd biggest digital payment market in SEA in 2023.

It also noted that digital wealth grew 61% YoY – fastest of all the DFS categories – and is expected to be the second largest DFS sector in Malaysia by 2030. The increasing interest towards digital wealth presents a lucrative opportunity for established financial services institutions to retain high-net-worth customers. 

As the competition between DFS players intensifies, pure-play fintechs have extended their lending services to the underbanked segment, while established financial services institutions have been quick to shift their large existing customer bases to digitalised services. 

Lastly, Malaysia has seen good progress on digital inclusion, making inroads into rural areas to bridge connectivity gaps. The percentage of households with internet access saw an increase from 76% to 97% for urban and 49% to 89% for rural, within the time frame of 2015 – 2022. However, consumers outside of metro areas are at risk of facing a widening digital economic divide when it comes to digital participation – active involvement in the digital economy through consumption of products or services across sectors. 

Samuele Saini, country director at Google Malaysia, said, “Malaysia’s GMV is projected to reach between $45b and $70b by 2030 and we’ve seen how the resurgence of tourism along with Malaysian consumers’ sticky digital behaviours in e-commerce and food delivery can contribute to this economic growth. With Malaysia making good progress in bridging connectivity gaps, addressing the digital participation beyond metro areas can prove to be a key in unlocking the next wave of growth.”

Meanwhile, Willy Chang, partner at Bain & Company, commented, “t is remarkable that both Southeast Asia’s digital economy GMV and revenue continued their double-digit growth momentum, with revenue breaking the $100B mark in 2023. This shows the resilience of the Southeast Asian digital economy and that the key players are making progress towards more healthy unit economics and sustainable business models. Despite external headwinds and some return to in-person dining and shopping, we are optimistic that the overall digital economy will continue to grow in the longer run.”

Singapore –  Infosys, a global company in next-generation digital services and consulting, has announced a five-year extension of partnership collaboration with Temasek, a Singapore-based global investment firm.

Infosys Compaz, an Infosys-Temasek joint venture, has worked with large Southeast Asian corporations on their digital transformation journeys. The company’s technological expertise spans cloud, data and analytics, cybersecurity, digital, artificial intelligence (AI), and automation, among other areas.

This extension shows iCompaz’s commitment to growing its presence in Singapore and the Southeast Asian market. The region has one of the fastest-growing economies in the world and is an important growth market. iCompaz, founded in 2018, has collaborated with Temasek to drive its technology transformation initiatives, which include the implementation of new digital architecture, data applications, and security infrastructure.

This announcement reinforces Infosys’ 2018 commitment to invest in technologies and expand its capabilities. The goal is to provide beneficial professional services while also encouraging the growth and development of its workforce.

iCompaz from Infosys leverages the deep capabilities of Infosys Cobalt, an enterprise cloud acceleration suite, and Infosys Topaz, an AI-driven platform, to enable clients to achieve unprecedented innovations and efficiencies, fostering value creation in connected ecosystems. This collaboration demonstrates iCompaz’s dedication to providing solutions to its clients.

Speaking about the extension of partnership, Dennis Gada, EVP, head of financial services, Infosys, said, “We deeply value our collaboration with Temasek, and it has helped us scale both technology capabilities and talent base in the region. Our journey over the last 5 years has demonstrated shared aspirations of amplifying human potential.” 

He added, “We look forward to further building on the strong foundation we have laid together to provide differentiated value to all stakeholders across the region.”

Meanwhile, Rao Baskara, chief technology officer of Temasek, said, “We look forward to extending our collaboration and the next phase of growth of iCompaz as it continues to provide quality digital services to companies in Southeast Asia. This engagement also enhances Temasek’s capabilities, and enables us to harness the potential that digital transformation brings.”

Manohar Atreya, CEO of Infosys Compaz, remarked, “iCompaz has proven its expertise in the sphere of large-scale digital and IT transformation. We are delighted to extend this collaboration with Temasek, as we continue to leverage the global scale and depth of Infosys in intelligent AI platforms and data solutions, to help clients navigate their next journey in business transformation.”


Manila, Philippines – The trio Google, Temasek, and Bain & Company has finally released its overview of the SEA region’s digital economy for 2022. Titled ‘Through the waves, towards a sea of opportunity,’ the latest iteration of the annual e-Conomy SEA report projects that the Philippine digital economy is on track to hit $20b Gross Merchandise Value (GMV) by the end of the year. This is a $3b growth from last year’s $17b projected value. 

It is also projected to reach $35b GMV by 2025 and $100b to $150b GMV by 2030.

Despite the partial resumption of in-store shopping, e-commerce accounted for 70% of the overall Philippine digital economy. It is expected to reach $14b GMV by 2022 with a 17% growth from last year and is expected to amount to $22b GMV by 2025 as it continues to steer the local digital economy.

Aside from e-commerce, food delivery and video-on-demand round up the top three digital activities of Filipinos, showing an adoption rate of 88%, 69%, and 58% respectively amongst digital urban users.

Moreover, projections include transport and food delivery reaching $1.9b GMV, travel growing at $1b GMV, online media reaching $3.1b GMV, and digital financial services such as lending and remittance hitting $6b this year.

The report also stated that the Philippines will attract more investors across sectors in the years to come, as its digital investment sector grew 63% from last year. Digital financial services in the country continue to attract investor interest, garnering 56% of total investor funding in 2022. 

“The Philippine digital economy remains resilient despite headwinds and continues to provide boundless opportunities as it is projected to reach $20 billion GMV by end of year. This year’s e-Conomy SEA report also suggests that the country will be a leading investment destination with over 70% of investors expecting deal activity to increase in the period of 2025 to 2030,” said Bernadette Nacario, country director at Google Philippines.

Willy Chang, associate partner at Bain & Company, also said “The Philippines’ digital economy is one of the more attractive investment hubs in the region. Across internet sectors there remains tremendous whitespace for growth as the ecosystem drives greater digital inclusion in the country, particularly outside of metro areas.”

“The seventh edition of the e-Conomy SEA report shows that the digital future of the Philippines is bright as it has the fastest growing digital investments sector this year in the region,” said Department of Trade and Industry Secretary Alfredo Pascual.

e-Conomy SEA is an annual research programme that combines Google Trends, Temasek, and Bain & Company’s insights and analyses of the digital economies of six countries in SEA: Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

Manila, Philippines – With a fast-growing base of digital consumers and merchants, acceleration in e-commerce, and food delivery, the Philippines’ current internet economy has been recorded as the nation with the highest internet economy growth, with a rate of 93%, according to the latest collaborative research from Google, Temasek, Bain & Company. This has previously been predicted to grow from US$9b in 2020 to US$17b this year. 

Currently, the SEA region is estimated to reach US$174b in gross merchandise value (GMV) by the end of 2021. Furthermore, the region’s digital economy is further expected to reach US$360b by 2025, outgrowing the earlier projection of US$300b.

“Much like the rest of the region, the Philippines is entering its digital decade as the internet increasingly becomes an integral part of the consumers’ daily lives. The growth of the digital market in the country was driven by the explosive 132% growth in e-commerce and double-digit growth across all sectors including food delivery services,” noted the study.

The country has seen 12 million new digital consumers since the start of the pandemic, up to the first half of 2021. About 63% of those new digital consumers are from non-metro areas and 99% say that they intend to continue using these services going forward. Pre-pandemic users have consumed an average of 4.3 more services since the pandemic began and 95% of those pre-pandemic consumers are still found to be digitally-inclined consumers today.

“The pandemic has led to enduring digital adoption in Southeast Asia, which has propelled its internet economy to new heights. Temasek looks forward to increasing our investments in Southeast Asia’s digital champions, using our capital to catalyse digital solutions and accelerate economic growth and job opportunities for our local communities,” said Rohit Sipahimalani, chief investment strategist and head of Southeast Asia at Temasek.

It is estimated that the Philippines’ overall internet economy will likely reach US$40b in value, growing at 24% CAGR, which can be amplified due to strict lockdowns as well as heightened adoption of certain digital services.

Willy Chang, associate partner at Bain & Company, commented, “The Philippines’ internet economy is the fastest growing in SEA as a result of strict COVID-19 restrictions and a large number of new digital consumers. There remains ample headroom for growth as long as digital enablers continue to develop. For example, we saw a strong adoption of digital payment methods such as e-wallets and national real-time payment rails which facilitated the growth of the internet economy.” 

The report also noted that 39% of local digital merchants believe they would not have survived the pandemic if not for digital platforms. Digital merchants now use an average of two digital platforms, but profitability remains a top concern. Digital financial services saw very rapid growth this year, not only from e-wallets but also from the national payment rail. 

Of the digital merchants surveyed, 97% now accept digital payments, while 67% have adopted digital lending solutions. Many are also embracing digital tools to engage with their customers, with 68% expecting to increase usage of digital marketing tools in the next five years.

Bernadette Nacario, country director at Google Philippines said, “The digital adoption we’ve seen in the Philippines since last year has contributed to the accelerated growth of the country’s internet economy, magnifying its vast potential. Google is committed to helping Filipinos maximize the opportunities of going digital and helping the country shape an internet economy that is equitable, safe, and inclusive through programs and products that improve lives.”