Indonesia’s Digital Economy To Become Largest In ASEAN By 2025

• Nov 29, 2018

The annual “e-Conomy Southeast Asia” study conducted by Google and Singapore’s state holding company Temasek found that Indonesia’s digital economy is poised to become the largest in Southeast Asia after its market volume will have almost quadrupled to $100 billion by 2025 from $27 billion in 2018. This will bring more jobs and more consumer choices for an emerging tech-savvy generation, The Jakarta Post noted.

The study says the growth will be spurred by four key digital services, namely e-commerce with a contribution of 53 per cent, online travel (25 per cent), ride-hailing services (14 per cent) and online media (eight per cent).

Google head of strategy and insights Samuele Saini said that the growth might be slightly higher than predicted because the study did not include emerging digital businesses such as those related to finance, health and education.

Digital services, particularly in e-commerce, are expected to diversify product and service choices for Indonesia’s 150 million smartphone users – the largest number in the region – especially for people in more remote areas.

Similarly, homegrown e-commerce platforms Tokopedia and Bukalapak have launched advertisements highlighting their expansive logistics networks that can bring everything from electric guitars to rice cookers to even the remotest village.

The report further says the digital economy will also increase employment opportunities as the average Internet-based company in Southeast Asia will increase staff by ten per cent each year.

In addition to employment, the report predicts that the growth of transportation-facilitated digital services such as Grab and Go-Jek, which operate in food delivery, ride-sharing, logistics and mobile payment, may triple associated jobs to twelve million region-wide in 2025 from four million this year.

However, even if Indonesia’s digital economy grows to the estimated $100 billion by 2025, it will contribute only four per cent to a government target of $2.5 trillion in GDP in the same year. The contribution remains smaller than that in developed countries such as the US at 6.5 per cent or China at 33 per cent.

Source: http://investvine.com/indonesias-digital-economy-to-become-largest-in-asean-by-2025/