On October 21, Google, Temasek and Bain & Company jointly released the latest "e-Conomy SEA 2026" Southeast Asia internet economy report.

Despite multiple challenges from geopolitics, inflation and market competition, Southeast Asia's digital economy maintained strong growth.

The report estimates that in 2026, Southeast Asia's digital economy GMV will reach US$368 billion, up 17% year on year; e-commerce GMV will reach US$226 billion, up 18% year on year.

More notably, Southeast Asia's digital economy is expected to surpass US$1 trillion by 2035, and AI is becoming an important factor driving future growth.

Unlike previous years, this year's report expands its research scope to ten Southeast Asian countries and focuses on analyzing the impact of AI on e-commerce shopping, platform competition and consumer behavior.

Southeast Asia's digital economy reaches US$368 billion

According to the report, Southeast Asia's digital economy GMV is expected to reach US$368 billion in 2026, up 17% from US$315 billion in 2025, maintaining double-digit growth.

By industry structure, e-commerce still accounts for the largest share. In 2026, e-commerce GMV is expected to reach US$226 billion, online travel US$59 billion, transport and food delivery US$40 billion, and online media revenue about US$44 billion.

The report expects that by 2030, Southeast Asia's digital economy GMV will grow further to US$620 billion, and reach US$1.139 trillion by 2035, leaving considerable room for future development.

Growth drivers include internet penetration, rising household incomes, expansion of digital payments, and continued extension of logistics networks to second- and third-tier cities.

E-commerce reaches US$226 billion, livestreaming continues to grow

E-commerce remains the core growth engine of Southeast Asia's digital economy.

The report shows that Southeast Asia's e-commerce GMV is expected to reach US$226 billion in 2026, up 18% year on year, higher than the digital economy's overall 17% growth rate.

In the long term, Southeast Asia's e-commerce market still has considerable growth potential.

By 2030, e-commerce GMV is expected to reach US$409 billion, and further grow to US$820 billion by 2035, with a compound annual growth rate of about 15% from 2026 to 2035.

Notably, online shopping behavior of Southeast Asian consumers is also changing.

In relatively mature markets such as Singapore, Malaysia and Thailand, membership rewards, free shipping and branded products are driving consumers to increase shopping frequency and spending.

In other markets, wider logistics coverage and higher e-commerce penetration continue to drive new user growth.

Meanwhile, livestream and short-video e-commerce continue to grow, and competition among platforms has further intensified.

The report notes that Shopee is improving user stickiness through logistics capabilities and membership benefits, TikTok Shop is developing from a content-driven impulsive shopping platform into a comprehensive e-commerce platform, while Lazada is placing more emphasis on the branded and high-value goods market.

This means that Southeast Asian e-commerce is no longer purely driven by low prices and traffic growth; platforms are competing for consumers through better delivery experiences, brand trust and marketing tools.

Six major markets show divergent digital economy development

Southeast Asia remains a region made up of markets at different development stages.

Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam are still the main components of Southeast Asia's digital economy.

However, the 2026 report no longer separately publishes complete e-commerce GMV data for the six countries. Instead, it adds analysis of AI adoption, user behavior and differences in digital economy development.

In terms of development characteristics, Singapore and Malaysia have relatively mature enterprise AI applications, Vietnam and Thailand are active in consumer AI usage, while Indonesia and the Philippines still have large room for user growth.

The report also estimates that in 2026, Vietnam's GDP growth rate will be about 7.1%, Indonesia about 5.0%, Malaysia about 4.7%, the Philippines about 4.1%, Singapore about 3.0%, and Thailand about 1.5%.

Differences in economic growth, consumer spending power and digital technology adoption mean e-commerce platforms need to formulate operational strategies for different markets.

AI is changing how Southeast Asian consumers shop

Compared with previous reports, the most obvious change in the 2026 report is that AI has become a key research focus of digital economy development.

Data shows that about 243 million people in the six Southeast Asian countries now use generative AI, equivalent to 58% of the working-age population. AI is gradually moving from a simple information query tool into consumers' daily shopping and business operations.

In e-commerce, 69% of surveyed consumers have used AI to compare product options, 19% of online shopping journeys begin with standalone AI apps, and 31% of consumers use image, video or voice search for products.

For e-commerce platforms, AI is also changing operational efficiency.

The report shows that Lazada's AI shopping assistant Lazzie had about 3 million daily active users during the 6.6 mega sale, and orders generated through AI guidance had an average order value about 75% higher than other orders.

Shopee's AI customer service can already handle about 80% of customer inquiries, while reducing the cost per customer service contact by about 30% year on year.

In addition, platforms are using AI to optimize product listing, advertising, customer service replies and product recommendations, helping sellers improve operational efficiency.

These changes mean AI is no longer just an internal efficiency tool for e-commerce companies; it is also directly participating in consumers' product discovery, comparison and purchase decisions.

For Southeast Asian e-commerce sellers, future competition will not only be about price, advertising and traffic, but also about product information quality, brand credibility, logistics experience, and the ability to use AI to improve operational efficiency.

SellerHome Review

The 18% growth and US$226 billion GMV of Southeast Asian e-commerce confirm that the market dividend still exists. Sellers should first assess how well their product categories fit Southeast Asia, and plan ahead for localized operations and logistics infrastructure to seize the window of opportunity.

Source: Cross-border Southeast Asia
Original link: https://www.amz123.com/t/Ci5BBW8J