Malaysia’s internet economy is forecast to hit $21 billion in GMV (Gross Merchandise Value) this year, and is expected to reach $35 billion by 2025, says the latest e-Conomy SEA Report.

The findings, compiled by Google, Temasek and Bain & Company, showed growth across each sector of Malaysia’s internet economy.

The report – entitled ‘e-Conomy Southeast Asia (SEA) Report - Roaring 20’s: The SEA Digital Decade’, involves insights into the internet economies of six countries in southeast Asia, including Malaysia, Singapore, Indonesia, Philippines, Thailand and Vietnam. The sectors covered in the report include online travel, online media, digital financial services and e-commerce, amongst others.

The 47% growth in Malaysia’s digital market – from $14 billion last year to $21 billion in 2021 – was fuelled by a considerable 68% rise in e-commerce, which is forecast to grow to $19 billion by 2025.

Double digit growth was also reported in the transport and food and online media sectors, at 35% and 14% respectively.

According to Google Malaysia’s managing director, Marc Woo, businesses turned to digital platforms to survive during lockdowns, with many set to bolster their digital tools over the coming five years: “Malaysia’s 2021 GMV is projected to hit $35 billion by 2025 and we’ve seen how the pandemic has led to a permanent shift in digital adoption in Malaysia with 81% of all internet users now consuming digital services.”

In addition, Temasek’s chief investment strategist in South East Asia, Rohit Sipahimalani said the coronavirus crisis led to an ongoing digital adoption in the region, driving the internet economy to new highs: “Temasek looks forward to increasing our investments in Southeast Asia’s digital champions, using our capital to catalyse digital solutions and accelerate economic growth and job opportunities for our local communities,“ he said.

“We saw a sticking shift in Malaysia’s digital consumer behaviour as a result of lengthy lockdowns,” stated Willy Chang, Associate Partner at Bain & Company. “In addition to the strong growth of its internet economy, H1 2021 also saw record deal activity - coupled with the anticipated digital bank licenses, we are optimistic about the growth potential ahead.”