Wednesday, October 4, 2023

Indonesia to Double the Size of Current SE Asia’s Digital Economy 2030

Grace Nadia Chandra
November 18, 2021 | 1:00 am
A buyer scans the payment QR code at Mayestik Market in Jakarta on May 11, 2021. (Antara Photo)
A buyer scans the payment QR code at Mayestik Market in Jakarta on May 11, 2021. (Antara Photo)

Jakarta. Indonesia's internet economy will likely reach $330 billion in value by 2030, almost double current Southeast Asia's digital economy value of $170 billion, according to a recent report by Google, Temasek, and Bain released last week.  

"Indonesia alone could be two times Southeast Asias GMV today by 2030," the companies said in a recently released report titled "Roaring 20s: The SEA Digital Decade". 

The report also estimated Indonesia's internet economy would likely reach $146 billion in value by 2025 from an estimated $70 billion this year, boosted by growth in e-commerce and an open regulatory framework supportive of digital financial services,

The report, which is the sixth edition of the internet economy in Southeast Asia, covers Indonesia, along with Vietnam, Thailand, the Philippines, Malaysia, Singapore. They provide insight into the booming e-commerce, transport and food, online travel, online media, and financial services sectors, as well as the growing sectors of healthcare and EdTech. 


It also factors in the pandemic and how it has dramatically sped up digitalization as a result. 

According to the report, from the beginning of the pandemic up until the first half of 2021, there have been 21 million new digital consumers in Indonesia. Notably, 72 percent are from nonmetropolitan areas — highlighting favorable penetration rates. 

On top of this, users who have used digital services before the pandemic have consumed 3.6 times more services than they did since it began. 

As a result, all Indonesian sectors studied in this report showed double-digit growth in 2021. 

Unsurprisingly, e-commerce remains the largest growth driver of the digital economy, with a 52 percent year-on-year growth to $53 billion from $35 billion. Online media ranks next with 48 percent, followed by transport and food at 36 percent.

The report also highlighted that Indonesia had surpassed Singapore in becoming the "hottest investment destination in the region," signaling a new era of the digital economy in the years to come. 

"Despite market uncertainty, global capital continues to pour into the market given its strong growth fundamentals, especially where there was increased usage as a result of Covid-19, like in e-commerce, fintech, healthtech, and edtech," the report wrote. 

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