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Bangkok Post
Bangkok Post
Business

Internet economy set to generate $35bn in 2022

Thailand's internet economy is expected to rise 17% year-on-year to US$35 billion in gross merchandise value (GMV) in 2022, driven by e-commerce, eventually reaching $53 billion in 2025, according to the "e-Conomy SEA 2022" report by Google, Temasek and Bain & Company.

Thailand is expected to remain the second-largest internet economy in Asean this year behind Indonesia, which is projected to have $77 billion in GMV. Thailand is trailed by Vietnam ($23 billion), Malaysia ($21 billion), the Philippines ($20 billion) and Singapore ($18 billion).

Thailand's internet economy is predicted to have a compound annual growth rate (CAGR) of 15% from 2022 to 2025, the slowest among five other Asean countries: Vietnam (31%), the Philippines (20%), Indonesia (19%), Malaysia (17%) and Singapore (17%).

According to the report's summary, the Asean member states, despite embarking on a return to pre-pandemic normality, face global headwinds that risk derailing a full economic recovery.

"Rising interest rates and high inflationary pressure are affecting consumer demand, particularly the discretionary sectors that sit at the core of the digital economy," said the report.

The report shows Asean's digital economy is on course for $200 billion in GMV in 2022, three years earlier than projected, representing an increase of 20% year on-year.

The internet economy in the region is forecast to hit $330 billion in 2025 with a CAGR of 20% from 2022 to 2025.

According to a Bain & Company statement, the region's e-commerce continues to thrive and is expected to see 16% GMV growth to $131 billion in 2022 despite the partial resumption of offline shopping post-pandemic and a greater focus on profitability by platform players.

"Marketplaces are shifting priorities from new customer acquisition to deeper engagement with existing customers to boost frequency, value and loyalty," the statement read.

The internet economy as defined in the report comprises e-commerce, transport and food, online travel, and online media.

Thailand's e-commerce is expected to reach $22 billion in GMV in 2022, up 8% year-on-year, although the growth rate is much lower than the 99% CAGR recorded between 2019 and 2021 during the pandemic.

The country's e-commerce is forecast to hit $32 billion in 2025 with a CAGR of 13% from 2022 to 2025.

Online spending in the transport and food sector is predicted to climb 12% year-on-year to $3 billion in 2022, while online media spending is forecast to rise 10% to $5.1 billion.

Online travel is expected to see a jump of 139% to $5 billion in 2022 following the country's reopening, though this is still less than the pre-pandemic level of $7 billion in 2019, according to the report. The country's tourism industry has yet to fully recover.

Online travel is forecast to have a CAGR of 22% from 2022 to 2025.

The report also conducted a survey on digital consumption for countries in the region.

Some 23% of people surveyed in Thailand said they want to use more e-commerce services over the next 12 months, while 55% said their usage level will remain the same.

In terms of transport, 36% of respondents said they would use such services to a lesser degree, while 51% said they would use it at the same level.

Regarding food delivery, 32% said they would use such services to a lesser degree, while 52% said they would use the services at the same level.

In terms of media usage frequency, 33% of respondents in Thailand said they watch video-on-demand at least once a week, on par with Asean on average.

Some 33% of Thai respondents said they watch video-on-demand more than one hour per day, above the regional average of 23%.

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