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Indonesia Set to Lead Southeast Asia's Digital Economy by 2024

2024-11-15 09:45:11.682000

Southeast Asia's digital economy is undergoing significant changes, with Indonesia poised to become the largest market in the region. Google estimates that Indonesia's digital economy will reach approximately US$90 billion by 2024, marking a 13% growth from US$82 billion in 2023 [453be61c]. This growth is attributed to widespread internet access and innovations in e-commerce, as highlighted in the e-Conomy SEA 2024 report published by Google, Temasek Holdings, and Bain & Company [453be61c].

While the overall growth of Southeast Asia's digital economy is projected to slow to 15% in 2024, down from 17% in 2023, Indonesia's economy has tripled since 2018, when it was valued at US$27 billion [b877cc54][453be61c]. Veronica Utami, Google Indonesia's Country Director, emphasized that Indonesia is expected to lead the region in gross merchandise value (GMV), driven by a stronger economic foundation and the potential of artificial intelligence [453be61c].

The e-commerce sector in Indonesia is projected to expand significantly, with online travel expected to grow by 24% to reach US$9 billion GMV. Additionally, digital financial services are anticipated to achieve a gross transaction value (GTV) of US$404 billion, reflecting a 19% growth [453be61c]. Digital lending is also on the rise, with projections of reaching US$9 billion GMV, while food delivery and online media are expected to generate US$6 billion and US$8 billion GMV, respectively [453be61c].

Despite the promising growth in Indonesia, the first half of 2024 has seen a decline in private funding for tech companies across the region, dropping to a record low of 306 deals compared to 564 in the same period in 2023 [b877cc54]. Major tech firms are under pressure to demonstrate profitability, with an expected profit of US$11 billion on US$89 billion in revenue [b877cc54].

As Southeast Asia's digital economy continues to evolve, the interplay between consumer spending, technological investment, and security will be crucial for its future trajectory, particularly as Indonesia emerges as a leader in the region [b877cc54][453be61c].

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