Digital payment adoption a challenge in SEA: Google-Temasek study: Page 2 of 2


Funding is healthy


Digital payment adoption a challenge in SEA: Google-Temasek study: Page 2 of 2


The 2018 Google-Temasek e-Conomy Internet study is in its third iteration and the research seeks to quantify the value of the Internet economy in Southeast Asia based on metrics such as gross merchandise value (GMV). The study is sponsored by Google and run in cooperation with Singapore’s investment arm Temasek Holdings.

The research seeks to also spot and forecast the business, technological and funding trends for the region up to the year 2025. Data for the study is based on the large troves of data obtained from Google Consumer Barometer, Temasek’s analysis, other reputable third-party sources and interviews with experts, including teams at Golden Gate Ventures, Monk’s Hill Ventures, Openspace, Wavemaker, and Jungle Ventures.

The study has been a benchmark for companies to base their press releases on and has also been oft-cited in many media reports. The 2016 and 2017 studies concentrated on four areas: e-commerce (marketplaces, and online malls), online media (online advertising and online gaming), ride hailing (online transport) and online travel (online flights and online hotels).

Sub-areas of this year’s study expanded to include video and music streaming under online media; online food delivery under ride hailing; online vacation rentals under online travel. In future, the study is likely to investigate sectors such as social commerce, financial services (fintech), healthcare and education, company officials said.


Digital payment adoption a challenge in SEA: Google-Temasek study: Page 2 of 2


Google’s vice president of Southeast Asia and India Rajan Anandan (pic, above) said that one of the key findings of the study is that the value of the region’s Internet economy has grown 44% at US$72 billion in 2018, up from US$50 billion in 2017.

Rajan added that the forecast for the region’s Internet economy value is expected to reach US$240 billion by the year 2025, led by Southeast Asian powerhouses such as ride hailing kings GrabTaxi Holdings Pte Ltd and Go-Jek, as well as e-commerce players Lazada Group and Indonesia’s Sea Ltd, which owns Shopee.

Besides other headline news that the report published, some other key findings of the Google-Temasek report for the six countries in questions are:

  • e-Commerce transactions doubled to US$23 billion in 2018 from US$10.9 billion a year ago, with Indonesia’s e-commerce market being the largest as it hit US$12 billion in 2018 up from US$1.7 billion in 2015, growing at a compound annual growth rate (CAGR) of 94%;
  • Online media hits US$11.4 billion in 2018 up from US$3.8 billion in 2015 driven by advertising, gaming and subscription music and music on demand;
  • Online travel reached US$30 billion in 2018, up from US$19.4 billion in 2015 for flights and hotels booked online;
  • Online transport grew to US$5.7 billion up from US$2.5 billion in 2015, with online food delivery hitting US$2.5 billion in 2018 up from US$400 million in 2015;
  • Most venture funding went to Southeast Asia’s nine ‘unicorns’ (companies who receive more than US$1 billion in funding) startups. They are: Indonesia-based Bukalapak, Go-Jek, Tokopedia, Traveloka; Singapore-based Lazada, Razer Inc, Grab, Shoppee; and Vietnam’s Vng Corporation;
  • In terms of total funding in the region, the figure for the first half of 2018 stood at US$6.5 billion up from US$2.9 billion for the same period in 2017; the figure for the entire 2018 is expected to far surpass the total funding for 2017, which came in at US$7.1 billion;
  • More than 2,000 Internet companies across the region received funding in the last three years, collectively raising US$7 billion; companies valued between US$10 billion and US$100 billion raised US$1.4 billion in 2018 alone;
  • Most funds of about US$16 billion were raised by Singapore-based companies, while US$6 billion was raised by Indonesian companies. US$2 billion was raised by companies in the rest of the four countries covered in the study; and
  • Fintech investment has surged in the first half of 2018, growing four times from US$350 million to US$1.3 billion in the same period last year.

Google’s Rajan noted that in the first year of the study was done in 2016, there was only a US$1 billion of venture capital being poured into the region.

“This number has grown significantly and the massive funding constraints are now largely behind us,” he argued. “Now as we go beyond 2018, we believe we’ll see transactions become more valuable as consumers buy more products and services online.

“Funding we believe [for Southeast Asia] startups is very much on track to where we want it to be and we also see that certain portions of the ecosystem are becoming more matured.”


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