South-east Asia digital economy to hit US$368 billion GMV in 2026, US$1.1 trillion in 2035: report
E-commerce will contribute the bulk of the growth, with AI improving product discovery and recommendations
The digital economy in South-east Asia is projected to reach US$368 billion in gross merchandise value (GMV) by 2026, marking a 17% increase from US$315 billion in 2025, according to the e-Conomy SEA report by Bain, Google, and Temasek. This growth is largely driven by e-commerce, which is set to account for US$226 billion in GMV by 2026 and US$820 billion in GMV by 2035.
Artificial intelligence is playing a crucial role in this expansion by enhancing product discovery and recommendations, leading to more customer conversions. Online advertising, projected to generate US$44 billion in revenue for 2026 and US$97 billion in 2035, will remain the largest contributor to the sector's revenue. South-east Asia's digital economy has seen a rapid adoption of generative AI, with 58% of the working population, or over 243 million people in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, now using it.
While consumers constitute the majority of AI users in the region, enterprises in mature markets like Singapore and Malaysia make up the bulk of AI use in terms of percentage of tokens. Singapore leads the region in GenAI adoption, followed by Malaysia and Vietnam. The Singapore government's National AI Strategy 2.0 has bolstered businesses' confidence to invest in infrastructure, skills, and talent.
Despite initial pro-China stances, Malaysian Chinese businesses are now distancing themselves from Beijing.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
