Southeast Asia’s digital economy is forecast to exceed 300 billion USD by the end of this year, supported by continuous growth over the past decade, according to the 10th e-Conomy SEA Report released by Google, Temasek and Bain & Company on November 11.

Illustrative photo: The ASEAN Economic Community (AEC) Council Special on the ASEAN Digital Economy Framework Agreement (DEFA), held on 24 October 2025 in Kuala Lumpur, Malaysia.

Unlike previous editions, this year’s report expands its scope to include Brunei, Cambodia, Laos and Myanmar for the first time. Earlier reports focused only on Indonesia, Malaysia, the Philippines, Singapore, Thailand and Viet Nam. The report covers six major sectors of the digital economy, namely digital financial services, e-commerce, travel, online media, food delivery and transport.

According to Ms. Sapna Chadha, Vice President for Southeast Asia and South Asia Frontier at Google, the company projected in 2014 that the region’s digital economy would reach 200 billion USD by 2025. In reality, this target was achieved three years ahead of schedule, reflecting growth that has outpaced expectations.

The report indicates that total digital economy revenue across the 10 countries is expected to reach 135 billion USD as profit margins improve. The four newly added countries account for about 2% of gross merchandise value (GMV), and their inclusion provides a more complete picture of the region’s digital transformation.

GMV comprises sectors such as e-commerce, food delivery, transport, online travel and online media, while revenue figures also cover digital financial services. E-commerce remains the largest segment, with GMV projected to reach 185 billion USD in 2025, accounting for 60% of the region’s total digital economy, an increase of roughly 18.6% year-on-year.

Online travel is the second-largest component by GMV, supported by sustained high airfares and accommodation costs, as well as the easing of visa requirements in several countries.

The report also notes that private investment in Southeast Asia’s technology sector is showing signs of recovery, rising by around 15% from the previous year to nearly 8 billion USD.

In the field of artificial intelligence (AI), Mr. Fock Wai Hoong, Temasek’s Head of Southeast Asia, reported that more than 2 billion USD was invested in AI-related startups over the past year. While most AI companies are based in Singapore, AI activity is spreading to other countries in the region.

As the region’s AI hub, Singapore attracted 1.31 billion USD in private AI investment from the second half of 2024 to the first half of 2025, accounting for around 55% of total AI funding across the 10 Southeast Asian countries covered in the report. Singapore currently hosts nearly 500 AI startups, out of roughly 700 AI startups operating across the region.

Source: Compiled by the Multilateral Trade Policy Department, Ministry of Industry and Trade