The internet economies in Malaysia, Thailand, Singapore and the Philippines are growing by between 20% and 30% annually, with no signs of slowing down, according to Google and Temasek multi-year research program.
This is a remarkable feat compared to other regions, but hardly the best showing in Southeast Asia. The two pacesetters in the region are Indonesia and Vietnam, which lead the pack with growth rates in excess of 40% a year.
Time is money: competing for user engagement
Companies are switching their focus from acquiring new customers to driving engagement. Their goal is to convince users to stay on their platforms for longer, in the belief that purchases will follow. Vying for user engagement, companies have expanded their scope across sectors, moving into new services, gamifying promotions and streaming enticing content.
This has ignited more intense competition, while providing users with more choices and lower prices.
Growth opportunities beyond metros
The growth of the internet economy has yet to spread evenly across Southeast Asia. Seven metropolitan areas that house just 15% of the region’s population still account for more than 50% of the internet economy.
People living in these metro areas buy six times more online than those living elsewhere. The internet economy, however, has the potential to grow twice as fast in areas outside the big cities, bringing all Southeast Asians on board.
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