40 million new internet users in 2020, report finds

Joaquina Erdmann

Customers and drivers for Grab Holdings Inc.’s GrabFood line up to collect orders at a Pisang Goreng Bu Nanik store in Jakarta, Indonesia, on Monday, July 15, 2019. Globally, the online food order industry has grown into a hyper-competitive field, which has led to consolidation as companies claw for a […]

Customers and drivers for Grab Holdings Inc.’s GrabFood line up to collect orders at a Pisang Goreng Bu Nanik store in Jakarta, Indonesia, on Monday, July 15, 2019. Globally, the online food order industry has grown into a hyper-competitive field, which has led to consolidation as companies claw for a bigger slice of more than $300 billion in restaurant deliveries. Photographer: Dimas Ardian/Bloomberg via Getty Images

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SINGAPORE — Southeast Asia saw a surge in the use of digital services like e-commerce, food delivery and online payment due to the coronavirus pandemic, according to a new report from Google, Temasek Holdings and Bain & Company.

As many as 40 million people in six countries across the region — Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Thailand — came online for the first time in 2020, the report said. That pushed the total number of internet users in those Southeast Asian countries to 400 million — or nearly 70% of the population, the report said.

The report said many of the new users came from non-metropolitan areas in Malaysia, Indonesia and the Philippines.

$100 billion in 2020

Global growth is facing an unprecedented challenge this year due to stringent lockdown measures that have affected businesses and employment across the world.

Still, the report predicted Southeast Asia’s internet sectors could witness strong growth and hit $100 billion in gross merchandize value (GMV) in 2020, with e-commerce registering a 63% growth while the online travel segment contracted 58%. GMV is a metric most commonly used in e-commerce that measures the total dollar value of goods sold over a certain period of time.

Overall, the region’s internet sectors remain on track to cross $300 billion in GMV by 2025 — that prediction was first made last year before the coronavirus pandemic.

Aadarsh Baijal, head of digital practice in Southeast Asia, at Bain & Company told CNBC that while the pandemic pushed more people to carry out online transactions this year, it does not necessarily mean they would spend more by 2025. Hence, the report’s five-year projection on the value of Southeast Asia’s internet economy remained mostly unchanged.

Still, it is “entirely possible” the region could cross the $300 billion mark before 2025 if there are signs of notable economic recovery, Baijal said.

Permanent habits

Some of the findings from the 2020 report include:

Correction: This story has been updated to correct the spelling of Aadarsh Baijal’s name, which had been inaccurately written in a press release.

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