In Southeast Asia, COVID-19 Speeds Transition to Digital Technologies

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ASEAN Beat | Economy | Southeast Asia

In Southeast Asia, COVID-19 Speeds Transition to Digital Technologies

A new report into the region’s digital economy shows the dramatic effects that the pandemic has had on daily life.

In Southeast Asia, COVID-19 Speeds Transition to Digital Technologies
Credit: Flickr/Roberto Trombetta

As the novel coronavirus has undertaken its deadly migration across the globe, most attention has understandably focused on its immediate public health consequences, as well as the downstream economic consequences of the lockdown measures needed to contain it.

A less remarked development, however, has been the changes to everyday life that have resulted from the contagion. In particular, a new report reveals the extent to which COVID-19 has driven a dramatic uptake of digital technologies across Southeast Asia, accelerating a profound shift that was already underway.

The e-Conomy SEA 2020 report, jointly compiled by Google, Singapore’s Temasek and the venture capital firm Bain & Company, focused on Southeast Asia’s six largest economies: Indonesia, Malaysia, Singapore, Thailand, the Philippines and Vietnam.

The report’s most interesting finding concerns the impact of COVID-19 in speeding the region’s uptake of digital platforms and technologies.

The report reveals that 40 million people in these six nations came online for the first time in 2020, bringing the total number of Internet users in the region to 400 million, up from 250 million in 2015.  The represents around 70 percent of the 580 million people living in these countries. At the same time, the size of the region’s internet economy this year exceeded $100 billion for the first time, and if current trends hold, is set to triple to more than $300 billion by 2025.

This year’s growth comes after a decade that has seen a revolutionary uptake in digital technologies and social media platforms in Southeast Asia, which is now home to four of the eight nations with the largest numbers of Facebook users.

In particular, the e-Conomy SEA 2020 report notes that the use of e-commerce platforms, food delivery apps and online media have all surged since the start of the pandemic. Digital financial services are showing signs of growth as the region’s populations shy away from non-essential public interactions.

“COVID-19 has changed people’s daily lives in fundamental ways,” Stephanie Davis, vice president for Google in Southeast Asia, said in a press release accompanying the report’s release. “The digital adoption that was projected to happen over several years has accelerated.”

The pandemic has also brought about growth in sectors like online education, as students are forced to take classes from home. Bucking the upward trend were online travel services, which have been gutted by the pandemic.

In some ways, the report’s findings are only to be expected. As populations have been put under varying degrees of lockdown, much ordinary, real-world economic activity has been rendered risky or impossible. Of more consequence is the report’s suggestion is that this broad digital shift may outlast the pandemic, producing profound and permanent changes in how the region lives and works.

In 2020, the report found, more than one in three consumers of digital services began using a new online service due to COVID-19. Of these, 94 percent intended to continue using the service beyond the pandemic. A large number of the new digital consumers are from non-metropolitan areas; in Malaysia, Indonesia and the Philippines.

The report suggests that the wrenching adjustments that have accompanied COVID-19 will be with us for many years to come.