Takeaways: Google-Bain report on the SEA internet economy

Google, in partnership with Bain and Temasek, has been furnishing a high-level report on South-East Asia internet economy for a few years now. (Link to 2019 report).

I covered the takeaways from the last year's report here. While the numbers across categories have moved from last year, not a lot of paradigm shift has happened. Hence, from a broader context, the trends from the last year remain stable.

Broader takeaways from the report:

• SEA with its population base of 600M+ people has already seen more than 60% internet penetration. Out of these 350M+ internet users, 90% of the consumption is happening through mobile. The rate of growth of internet penetration has slowed down - quite expected as there are issues around trust, affordability, and awareness that need to be solved for additional growth.
• SEA internet users have been considered to be one of the most engaged internet users in the world with an average daily internet consumption of ~ 6 hours. This partially explains the huge spurt in the internet economy growth in the SEA countries - from 20% to 40% annually.
• As individuals, we may be different - but as groups, we are quite similar. Sure there are cultural, geographical differences that an India might have with an Indonesia. On a broader level, however, the consumption requirements are similar and that mirrors the nature of the organizations which have scaled a lot.
• The companies which have become sort-of poster boys in the SEA internet economy are the ones in eCommerce, Ride-hailing, Travel, and Media. India had its poster-boys limited to the same segments until very recently. In the next 5 years, I reckon we will have a set of big companies coming in Logistics, Financial services, Real-estate management and Healthcare.
• Push towards rural areas: Similar to the push towards Next Half-Billion in India, the big consumer technology companies are creating initiatives to make the people from the rural areas in SEA acquainted with the internet offerings. Around ~ 85% of its population lives in rural areas and hence, all the more important for the consumer tech firms to nurture this segment.
• The nature and geography of the dollars: eCommerce and Ride-hailing have been the sectors taking in every 2 of the 3 dollars invested from the VC money. This share should see more evenness in the coming years. Health care, Financial services, and SaaS should be the focus sectors. Geographically, Singapore has attracted the largest amount of investments. While this is understandable, countries like Thailand, the Philippines, and Malaysia should ideally see a fair investment in the coming years. These countries have a combined internet user base of ~ 120M and not developing the requisite infrastructure would be a missed opportunity.
• Development of key categories: eCommerce, Ride-hailing and Travel are the biggest categories in the SEA internet economy. SEA has long been a tourism destination for the world and it shows in the size of the online Travel industry in SEA (pegged at USD 30 billion+).
• eCommerce in SEA is now flirting with the concepts around Gamification / Social shopping / Auction / Unboxing videos. Lines between a pure-play content platform and a pure-play commerce platform are blurring. We are seeing early examples in India as well - with Flipkart and PayTM foraying into video and the likes of LBB experimenting with commerce. 
• Ride-hailing apps in SEA are following the playbook of a Super-App. Start with mobility, move to food-delivery and use the rich customer data to build financial services on top of it. Also, build a layer of Gaming or Video to let the user engage for a higher time.
• In the online media segment, the usual suspects are video streaming platforms, platforms that incentivizes short-content consumption. A lot of parallels when you see the Indian markets as well. Interestingly, a sports-media company named ONE Championship stands out because of its vertical focus on broadcasting martial arts events. This is something which we don't have a parallel yet - CricBuzz might have been one had it not merged with Times Internet.

The above has been a high-level interpretation of a report which itself is a high-level interpretation of the SEA internet economy :) If the summary seemed interesting, I would suggest to check out the original report.

Thanks for reading. Occasionally, I write here.