KUALA LUMPUR: Malaysia is now the fastest-growing digital economy in South-East Asia, with an increase of 19% year-on-year (y-o-y) in gross merchandise value (GMV).
The country is also on track to reach GMV of US$39bil or about RM161bil this year.
According to the 10th edition of the e-Conomy South-East Asia (SEA) Report 2025 by Google, Temasek and Bain & Co, the growth is supported by sustained consumer adoption and stable macroeconomic conditions, including contained inflation.
“At the regional level, South-East Asia’s digital economy is projected to surpass US$300bil in GMV by this year, growing 15% y-o-y and outperforming the region’s first forecast by 1.5 times.
“As the world’s fifth-largest economy with a population of over 680 million, South-East Asia has rapidly digitalised over the past decade, showing strong resilience and monetisation capabilities, despite global headwinds such as Covid-19, inflation, and supply-chain pressures,” the report’s authors said in a joint statement yesterday.
Meanwhile, Bain & Co partner Amanda Chin said eCommerce, the biggest driver of Malaysia’s digital economy, continues to expand at a healthy pace and is expected to reach US$20bil this year.
She said the sector has grown 21% y-o-y in GMV, the second-fastest rate in SEA, supported by increasing platform consolidation as major regional players leverage significant economies of scale, as well as the rise of video commerce, which has converted consumer attention into sales with minimal friction.
“Artificial intelligence (AI) has also played a key role in how users research and make decisions, and how eCommerce platforms leverage AI for product recommendations. It is growing and becoming more diverse, and we see it playing a major role in building trust and providing more authentic recommendations,” she said during the presentation of the e-Conomy SEA Report 2025 here, yesterday.
On the online travel segment, Chin said the sector recorded 19% growth in GMV – the highest in SEA – driven by improved air connectivity, visa liberalisation measures, and large-scale digital tourism campaigns that are building momentum ahead of Visit Malaysia 2026.
She said total passenger arrivals to Malaysia had returned to near pre-pandemic levels, while both foreign arrivals and outbound travel helped sustain strong pricing power.
“As you look at hoteliers in high-demand markets like Singapore and Malaysia, they have been able to raise average rates by over 20%, returning to healthier profit margins and contributing to the sector’s overall value,” she said.
“As we approach 2026, which coincides with the Visit Malaysia 2026 campaign, there are many initiatives underway, including partnerships with major online travel platforms. We are really aiming for a 45 million visitor target, so we are very optimistic about the outlook for online travel,” she said.
For digital financial services, Chin said the segment continued to record double-digit growth, with digital payments expected to reach US$213bil, up 16% y-o-y in gross transaction value by this year.
She said the momentum was driven by Malaysia’s rapid shift toward cashless payments, with Bank Negara Malaysia reporting a 28% surge in digital payment usage. Meanwhile, cross-border acceptance has also expanded significantly, with the DuitNow QR standard now interoperable across an increasing number of regional markets. — Bernama
