According to a Google, Temasek and Bain & Company forecast, the regional internet economy will have tripled to US$300 billion by 2025, while Thailand’s will have hit the $50 billion mark.
April Srivikorn, country manager for Google Thailand, said the company has collaborated with Temasek and Bain & Company to conduct research for the e-Conomy SEA 2019 report about the region’s internet economy. The report forecasts that by 2025, the regional internet economy will have tripled to $300 billion.
In Thailand, the internet economy stood at $16 billion in 2019, coming in second in Southeast Asia after Indonesia. It has been growing at 29 per cent per year and is expected to reach $50 billion by 2025. The biggest factor driving the growth is online travel (flights, hotels, vacation rentals), which is the largest segment in Thailand and most mature, recording $7.2 billion in gross bookings value in 2019, and growing at 17 per cent CAGR (compound annual growth rate).
E-commerce has also hit new heights, becoming the largest and fastest-growing segments in Southeast Asia.
April said that in Thailand, e-commerce showed the most accelerated growth at 54 per cent CAGR since 2015 and reached $5 billion in 2019. It is expected to rise to $18 billion by 2025.
Online media (advertising, gaming, subscriptions, music and video on demand) is also growing rapidly in Thailand at 39 per cent CAGR reaching $3 billion and is set to hit $7 billion by 2025.
“This is driven by the high levels of engagement on social media and video platforms among Thais,” said April.
Ride hailing in Thailand reached $1.3 billion in 2019, growing at 36 per cent CAGR since 2015.
April said opportunities in the internet economy are spreading beyond big cities. Seven major metropolitan areas account for more than 50 per cent of Southeast Asia’s internet economy, despite having only 15 per cent of the total population. By 2025, this has been forecast to grow twice as fast outside cities, creating new jobs, opportunities as well as greater demand for education and training.
She said the region’s internet economy has experienced a surge in fundraising over the last four years, but funding for Thai start-ups has dried up, particularly for the later stage.
She said that Southeast Asia’s internet economy has hit $100 billion this year for the first time, with 360 million people now online – 100 million more than just four years ago.
The Internet economy’s gross merchandise value in the region currently only accounts for 3.7 per cent of the national GDP, less than that of the US, which was 6.5 per cent in 2016. This represents a huge opportunity for accelerated growth.