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Malaysia: Internet economy to hit RM147bil by 2025
KUALA LUMPUR: Malaysia’s Internet economy is estimated to be worth US$21bil (RM88bil) in 2021, boosted by e-commerce, online media, transport and food growth.
According to Google, Temasek and Bain & Co’s latest edition of the e-Conomy South-East Asia Report, which also observed growth across all sectors of the country’s Internet economy, Malaysia’s digital market is expected to hit US$35bil (RM147bil) by 2025.
“Malaysia is moving into a new way of life as the pandemic has led to a permanent shift in digital adoption.
“The steep 47% growth of Malaysia’s digital market from US$14bil (RM59bil) in 2020 to US$21bil in 2021 was driven by a significant 68% surge in e-commerce, which is expected to grow to US$19bil (RM80bil) by 2025,” said Google, Temasek and Bain & Co in a joint statement yesterday.
In their report, titled “e-Conomy South-East Asia Report – Roaring 20’s: The SEA Digital Decade,” it was revealed that Malaysia’s transport and food and online media sectors also observed double digit growth at 35% and 14%, respectively.
It said the pandemic had led to a permanent shift in digital adoption in Malaysia, with 94% of consumers using their digital services until today; while 98% said they intend to continue doing so going forward.
“Pre-pandemic users, those who used the services before the pandemic, have used an average of 4.2 more services since the pandemic began and amongst all users, satisfaction with the services sit at 76% across verticals.”
The report also revealed that digital merchants in Malaysia are becoming more tech-savvy.
“In Malaysia, 43% of digital merchants believe that they would not have survived the pandemic if not for digital platforms. This is the highest in the region, given the strict lockdowns in the past year.”
The report however said that this had accelerated digital adoption by merchants, with 98% now accepting digital payments and 72% using digital lending solutions.
“Many are also embracing digital tools to engage with their customers, with 70% expecting to increase usage of digital marketing tools in the next five years.”
As investors become accustomed to the new normal in deal-making, the report revealed that deal-making activities rebounded strongly in the first half of 2021 and is on track to hit the highest record in recent years.
“Investment appetite remains strong in the digital services that surged as a result of Covid-19, such as in e-commerce, fintech, healthtech and edtech. With the emergence of Malaysia’s first unicorn (Carsome) this year, the outlook for continued funding growth is optimistic.”
The sixth edition of the e-Conomy South-East Asia Report gave new insights into the Internet economies of six countries within South-East Asia, namely Malaysia, Singapore, Indonesia, the Philippines, Thailand and Vietnam.
Source: https://www.thestar.com.my/business/business-news/2021/12/02/internet-economy-to-hit-rm147bil-by-2025