Google forecasts Indonesia to become Southeast Asia’s largest digital economy
A new report by Google, Temasek, and Bain & Company projects that Indonesia's digital economy will reach a gross merchandise value (GMV) of $90 billion in 2024, an annual increase of 13% and the largest figure in Southeast Asia.
A corner of Jakatar. Photo courtesy of Indonesia Expat.
Indonesian weekly magazine Tempo cited the e-Conomy SEA 2024 report, which shows that the e-commerce sector is a major driver of this growth, with an estimated 11% increase in GMV to hit $65 billion this year.
Innovations by leading e-commerce platforms have significantly enhanced user experience, contributing to this surge.
Indonesia also stands out as the second-fastest-growing market for creator video uploads, with a compound annual growth rate (CAGR) of 16% between 2022 and 2024.
Veronica Utami, country director of Google Indonesia, mentioned the growing video commerce and the creator economy. “The rapidly growing video creator community in Indonesia underscores the significant potential of this sector,” she said in a November 13 written statement as quoted by Tempo.
She explained that artificial intelligence (AI) is emerging as a key driver of Indonesia's digital transformation. To support AI services and data growth, data center capacity in Indonesia is set to increase by 268%, reaching 202 MW.
Other digital sectors are also experiencing positive growth. Online travel is projected to grow by 24% to $9 billion in GMV, fueled by a 400% increase in international travel since 2020.
Digital financial services are expected to reach a gross transaction value (GTV) of $404 billion, with a 19% growth rate. Digital lending is projected to reach $9 billion in GMV, while food delivery and online media are estimated to reach $6 billion and $8 billion, respectively.
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