The digital economy in the Southeast Asian nations ¹ has hit its stride, proving its resilience and exceeding expectations over the last decade. According to the 10th edition of the annual e-Conomy SEA report ² by Google, Temasek, and Bain & Company, the region is set to surpass $300 billion ³ in Gross Merchandise Value (GMV) ⁴ by 2025, beating the inaugural forecast 10 years ago by 1.5 times. Revenues are forecasted to hit $135 billion as profitability accelerates across the region.

The report shows Southeast Asia has successfully transitioned from a phase of hyper-growth to one focused on sustainable profitability. The 7.4x increase in total GMV and an 11.2x jump in revenue since 2016 ⁵ are now paving the way for the region’s next phase: the AI reality.

Here are the three key takeaways from this year’s e-Conomy SEA 2025 report:

1. Businesses sustain momentum through innovation and smarter growth.

Across digital economy sectors, businesses are pursuing sustainable profitability while continuing to drive growth. Video commerce is a highlight, fundamentally transforming the e-commerce sector by surging five-fold in three years, and expected to account for 25% of total e-commerce GMV by 2025. Most food delivery platforms are profitable or approaching that milestone, having successfully optimized logistics, streamlined operations and diversified earnings. Similarly, the transport sector continues to grow via tiered services and in-app ads, while online travel is gaining momentum driven by higher rates and government-backed visa schemes. Online media growth is fueled by the rise of retail media networks, increasing maturity of video commerce and AI-powered ad formats. Digital financial services (DFS) have grown beyond basic payments, with cross-border QR interoperability now a reality across eight countries.

2. Investor interest shifts from rapid expansion to long-term value creation.

Investor confidence is staging a targeted rebound, with private funding ⁶ climbing 15% year-over-year to roughly $8 billion. This capital is strategically focused on late-stage deals and the rapidly growing DFS sector, which is drawing about half of the total deal value. This cautious uptick is built on three solid pillars: more realistic entry valuations, proven monetization models where revenue growth keeps pace with GMV, and a clearer pathway to profitability. The narrative is shifting from merely rapid expansion to long-term value creation. Looking ahead, the focus is now moving to the fourth enabler — dependable exit pathways — with positive signs emerging from a healthy IPO pipeline in the region.

3. Southeast Asia is emerging as a global AI hotspot.

The region is quickly positioning itself at the forefront of the global AI transformation. Its digital depth provides a launchpad, with three in five people now shopping online, and over 60% of all payments being digital. This foundation fuels the AI boom: consumer interest in AI topics stands at an impressive three times the global average. And the benefits are tangible: Three out of four users report that AI-powered tools have helped them discover content and make tasks easier.

The AI acceleration demands robust physical infrastructure, and investment is actively flowing in to answer that call. With over 4,600 MW new capacity planned, the region’s data center capacity is set to grow by 180% – faster than the 120% growth projected for the rest of Asia Pacific. ⁷ AI is also a bright spot for investors: over the past year, more than $2.3 billion has been invested into the region’s over 680 AI startups, accounting for over 30% of private funding in the first half of 2025.

The achievement of the $300 billion GMV milestone confirms the success of Southeast Asia’s foundational digital decade. The region is poised to capitalize on the structural shifts defining the future: the immediate, high-impact acceleration of AI, signs of the revival of capital markets and a strategic drive toward deeper regional cooperation and regulatory support.

https://blog.google/around-the-globe/google-asia/sea-economy-2025/