ASEAN Digital Economy Turns into Global Growth Engine

Driven by e-commerce and digital financial services, Southeast Asia’s digital economy generated revenues of USD 89bn in 2024, data from the e-Conomy SEA 2024 report showed. The sector continues to attract robust private investment, even amid recent global macroeconomic headwinds. The total value of announced investments in communication, data processing, and hosting services soared nearly fivefold from USD 777mn in 2015 to USD 4.4bn in 2024, according to the World Economic Forum. This surge is underpinned by a young, digital-native population, rapid urbanisation, and a supportive policy environment

Southeast Asia's digital economy has emerged as a global growth engine, with its gross merchandise value (GMV) reaching USD 263bn in 2024, reflecting a 15% y/y increase, the e-Conomy SEA 2024 report showed. Profitability, on the other hand, surged to USD 11bn, marking a 2.5x growth since 2022.

E-commerce is the primary growth driver, accounting for 60% of the total GMV or USD 159bn, propelled by video commerce innovations that now represent 20% of sectoral GMV. Digital financial services follow closely, while travel and transport sectors have rebounded to above pre-pandemic levels.

Cross-border trade facilitation under ASEAN’s Digital Economy Framework Agreement (DEFA)—projected to unlock USD 2tn in the region’s digital economy by 2030 —is accelerating regional integration. Concurrently, the ASEAN Digital Masterplan 2025 is bridging infrastructure gaps, with fixed and mobile broadband coverage expanding to 85% of urban areas and 65% of rural regions.

Strategic imperatives include accelerating DEFA ratification to unify disparate national regulations, scaling AI-driven productivity tools across manufacturing and agriculture, and addressing the urban-rural digital divide through targeted broadband subsidies. With GMV projected to reach USD 600bn by 2030 under baseline scenarios and up to USD 1tn with full policy optimisation, ASEAN is poised to solidify its position as the world’s fourth-largest digital economy within this decade.

Southeast Asia’s digital economy continues to attract robust private investment, even amid recent global macroeconomic headwinds. In 2023, 71% of all venture capital (VC) deals in ASEAN were digital economy-related, surpassing the global average and demonstrating the region’s strong appeal for technology-focused investors, according to the World Economic Forum. The total value of announced investments in communication, data processing, and hosting services soared nearly fivefold from USD 777mn in 2015 to USD 4.4bn in 2024. This surge is underpinned by a young, digital-native population, rapid urbanisation, and a supportive policy environment, including DEFA, which promises to further streamline regulations and boost investor confidence.

Despite these positives, the funding landscape has shifted. After peaking in 2021, private funding in ASEAN reached a six-year low in 2023, mirroring global trends of rising capital costs and investor caution. In 2025, the fintech sector is expected to remain the primary recipient of VC funding, followed by e-commerce and software-as-a-service (SaaS). Fintech investments, especially in wealthtech, cross-border payments, and financial software, continue to dominate, while early-stage SaaS companies attract most of the remaining capital.

Investor sentiment is also evolving. There is a growing emphasis on profitability and sustainable growth over rapid expansion, with late-stage funding and large M&A deals declining. In response,

startups are increasingly turning to alternative funding sources, such as venture debt and private credit, to secure lower-cost and less dilutive capital for expansion. Impact investing is gaining momentum, with capital flowing into climate resilience, financial inclusion, and gender-smart investments. Nearly half of global investors plan to increase their ASEAN allocations in 2025, focusing on sustainable development and ESG compliance.

Overall, ASEAN’s digital economy remains a magnet for private investment, but the landscape is becoming more selective and sustainability-driven, with investors prioritising quality, innovation, and long-term impact.

However, challenges such as regulatory complexity, skills gaps, and infrastructure disparities must be addressed to fully realize the region’s potential. Continued public-private collaboration, investment in digital infrastructure, and a focus on inclusive growth will be critical for ASEAN to cement its status as a digital powerhouse and a leader in the global digital economy.