THE Southeast Asian digital economy is on course to surpass US$300 billion (about RM1,245 billion) in value by the end of 2025, fuelled by robust growth in e-commerce, transport and online services, with Singapore continuing to anchor the region’s transformation.
According to a joint report released on Tuesday by Bain & Company, Temasek and Google, the region’s gross merchandise value (GMV) — the total worth of goods and services sold online — reached US$299 billion by mid-2025 across Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
The report, which for the first time included Brunei, Cambodia, Laos and Myanmar, showed that total revenue across these ten nations hit US$100 billion, pushing regional GMV to US$305 billion — exceeding the US$200 billion forecast made in the inaugural 2015 edition of the study.
The study highlights that artificial intelligence (AI) is set to accelerate transformation across the region, given its large online population and enthusiasm for digital innovation.
Bain & Company partner Florian Hoppe said: “Singapore continues to anchor South-east Asia’s digital economy. Its early momentum in scaling AI capabilities can unlock a broader regional opportunity to turn transformation into lasting economic value. Importantly, it can also play a key role in unlocking funding and the exit environment for the region.”
The Straits Times cited Google’s vice-president for South-east Asia and South Asia Frontier, Sapna Chadha, saying the impact of AI and the shift towards sustainable profitability are already evident.
“The future here will be defined by speed as the region harnesses its proven ability to seize the returns of this new age not in years, but in months. We remain deeply committed to partnering with South-east Asia as it accelerates toward its next ambition: becoming a thriving intelligent economy,” she said.
Temasek’s head of South-east Asia, Fock Wai Hoong, said investor confidence in the region’s digital economy remains solid, with funding stabilising as investors prioritise quality and efficiency over sheer volume.
“Temasek remains committed to the region’s digital economy by deploying our capital to growth-stage businesses, to help take proven business models from start-up to scale-up,” he said, noting that public market exits are showing signs of recovery, with Singapore reportedly having around 30 IPOs in the pipeline.
Across all key sectors, the report recorded double-digit growth. In e-commerce, market consolidation has led to stronger revenue growth as larger regional players leverage economies of scale. Video commerce has also evolved from niche to mainstream, driven by “shoppertainment” that blends entertainment with online shopping.
Food delivery GMV grew by 14 per cent year on year, while transport services — including ride-hailing — expanded by 16 per cent, with autonomous vehicles expected to gain traction within the next five years.
Online travel also posted strong recovery due to rising airfares and increased travel volumes, while accommodation providers in high-demand markets such as Singapore and Malaysia saw hotel room rates surge by more than 20 per cent.
Private funding in the digital economy rose 15 per cent to US$7.7 billion over the past year, though still 30 per cent below 2021’s record high. Singapore, Vietnam and Malaysia are expected to lead future funding growth, particularly in AI, deep technology and software services.
Chadha said Singapore’s dual focus on driving digital innovation while maintaining robust AI governance frameworks would be key to sustaining its leadership role.
Fock added that Singapore’s growing reputation as an AI hub is attracting regional and global firms to establish operations there.
“Ongoing efforts to strengthen regional cooperation and improve capital market conditions in Singapore will help ensure that South-east Asia’s AI ambitions continue to be realised,” he said. - November 11, 2025
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