40 million new internet users in 2020, report finds


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 Southeast Asia to 400 million. It added that many of the new users came from non-metropolitan areas in Malaysia, Indonesia and the Philippines.

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 2020, with e-commerce registering a 63% growth while the online travel segment contracted 58%. Overall, the region’s internet sectors remain on track to cross $300 billion by 2025.

“We’ve been profoundly impacted by the global coronavirus but it has been heartening and encouraging to see that the resilience still exists in Southeast Asia’s digital economy,” Stephanie Davis, vice president for Southeast Asia at Google, said on CNBC’s “Squawk Box Asia” on Tuesday before the report was officially released.

Davis explained that Covid-19, which has infected more than 50 million people worldwide, drove a lot of the decision-making for consumers across Southeast Asia. She added that there was encouraging evidence that much of that shift to digital consumption is here to stay.

“When we ask consumers why they chose to use e-commerce, as just one example, during coronavirus, they share with us that yes, it was to avoid potential exposure to coronavirus. But really importantly, near the same percentage of people state it is because it is efficient and they found it to be helpful,” Davis said.

Some of the main findings from this year’s report includes:

1. Digital financial services are gaining momentum as more small-and-medium-sized businesses have become receptive to accepting online payments. Digital payments are set to grow from $600 billion in 2019 to $620 billion in 2020 as the average number of cash transactions fall and could reach $1.2 trillion by 2025.

2. Health technology and education technology sectors received a boost from the pandemic as many people turned to online health consultations while schools shifted to remote learning. Investments into those sectors are growing.

3. Online travel and transport sectors were hit the hardest as the pandemic ground international travel to a halt while many people began to work from home. Still, the report predicts online travel to rebound to $60 billion by 2025.

4. Regional technology investments rose 17% in the number of deals between the first half of 2019 and first half of 2020 but total deal value fell from $7.7 billion to $6.3 billion. Investors put more money into the financial technology space where deal value rose from $475 million to $835 million in the first half of 2020.



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