The pandemic’s effect in supercharging digital adoption has resulted in digital players’ strategy shifting from acquisition to engagement. Of the 460 million Internet users in 2022, 100 million users have come online in the last three years.
“We are seeing market leaders take a longer-term recovery strategy and invest in capabilities to target markets and consumer segments with higher value generation potential,” said Florian Hoppe, Partner and Head of Digital Practice in Asia-Pacific, Bain & Company.
The different sectors in the digital economy will follow different growth lines, with the report forecasting the e-commerce sector to continue holding firm in its position, with a forecast 16 per cent GMV growth for 2022. Food delivery and online media are likely to see growth taper after the spike during the pandemic, with GMV growth at 14 per cent and 9 per cent respectively. Transport and online travel sectors are expected to see a strong recovery at 43 per cent and 115 per cent GMV growth as international travel resumes. But consumer demand is expected to suffer from rising prices, and headwinds such as increasing fuel prices, supply shortages and continuing travel restrictions to result in a gradual recovery.
“The acceleration of the digital economy during the pandemic has unlocked significant value for industry sectors, but it is critical to recognise that the new macro turbulences ahead will see different growth archetypes emerging across verticals,” said Hoppe.
Digital financial services is forecast to grow, with optimistic forecasts across payments, remittance flow, lending loan book, investments and insurance. In particular, the lending loan book is expected to grow from US$50 billion in 2022 to US$325 billion in 2030, and investment assets under management from US$39 billion in 2022 to US$530 billion in 2030.
Funding for tech investments in Southeast Asia has growth year on year, with funding value for H1 2022 at US$13.2 billion, above US$11.5 billion in H1 2021, but a drop from US$15.2 billion in H2 2021. Early-stage investments are continuing to see investments coming in, with ticket sizes growing between 40 per cent and 60 per cent. Growth-stage investments are also growing, hitting record highs in 2022, but late-stage investments are seeing funding dry up, as initial public offerings fall from 15 in 2021 to just four in H1 2022.
