Growth of Southeast Asia’s internet economy to slow in 2023

As per a recent report published by Google, Singapore state investor Temasek Holdings, and global business consultant Bain & Company, the Southeast Asian internet economy’s growth is projected to decelerate to 11% in 2023 from 20% last year. Presently, the region’s internet market is predicted to reach $295 billion by 2025, a reduction from the earlier forecast of $330 billion.

The report indicates a decline in private funding for digital economy sectors to 2017 levels despite growing cash reserves. This decline reflects global trends towards higher capital costs and associated challenges in the funding lifecycle. Florian Hoppe, Partner and Head of Vector in Asia-Pacific, Bain & Company, clarified that the forecast reduction is primarily a result of a shift in long-term goals and stabilization after the pandemic and that there would be consistency as we move forward towards 2025.

This region, comprising 11 countries, is home to more than half a billion people. Characterized by a young population, an expanding middle class, and rising smartphone usage, it is currently witnessing a swift expansion in the internet market and holds immense potential.