It's that time of the year again! Google, Temasek and Bain just released their e-Conomy SEA report 2022. If you've only got a few minutes (but still want to know the talk of the town), this is for you. 🌊

⛵️ Sailing through stormy waters

SEA was returning to pre-pandemic normal, but global macroeconomic conditions hit. Now, we'll be facing high interest rates and inflationary pressure, lowering consumer demand — especially in the sectors at the core of the digital economy.

💯 It's been tough, but we'll make it

While macroeconomic conditions are slowing growth, SEA's digital economy is still on track to hit ~$200B in gross merchandise value (GMV) this year.

• This is three years earlier than expected in the 2016 e-Conomy report.
• Digital adoption is still rising, just at a slower pace than the COVID highs.

😎 The urbanites are pushing it

The largest chunk of the digital economy? Wealthy consumers and young digital-native consumers.

• The opportunity for growth: deeper engagement (aka, more frequent and valuable orders, subscriptions or cross-selling services).
• Adoption and spending by cash-strapped urban and suburban consumers remain lower.

📈 Different sectors, different stories

The SEA digital economy follows three different trendlines.

• E-commerce: S-shaped curve. It's continuing its growth trajectory but from a higher starting point after the steep acceleration during COVID.
• Food delivery and online media: return to trendline. They're back to pre-pandemic levels after a two-year spike.
• Travel and transport: U-shaped recovery. Pre-pandemic levels are still far away.

🏦 The financial services fight

More people have started using digital financial services than ever — but here's the dilemma.

• Fintechs, platforms and digibanks will be stress-tested by rising interest rates and a riskier lending environment.
• Banks and insurance companies are rapidly digitalizing and have a tight grip on wealthy consumers.

💰 All about the (VC) money

Don't freak out! Most tech investors are still bullish medium and long-term on SEA's potential and have $15B of dry powder.

• Early-stage deals still have strong momentum.
• Late-stage deals are seeing more pronounced dips and paused IPOs.

Plus, there is growing interest in emerging markets like the Philippines and Vietnam and emerging sectors like SaaS and web3.

🌱 Baby steps count

While digital players don't produce as many emissions as others, they've started rolling out reducing and recycling programs.

• They can still do more to lower impact by 30–40%, but they're also a great way to raise consumer awareness.

👩🏻‍🔧 How's your job?

The digital economy has created 160k high-skilled jobs, indirectly supporting 40M jobs, and allowed 20M merchants and 6M restaurants to grow online.

But remember. There are still concerns about worker-partners' welfare — workplace safety, workers' rights and supporting gig workers.

🧐 So what's the plan?

It's just the beginning! The ability to go past $300B by 2025 depends on the current recovery and the path to a $600B–1T digital economy in 2030 depends on SEA's economic fundamentals.

• Digital inclusion, hiring higher-quality talents and sustainable growth are key to moving forward.