Southeast Asia’s Digital Economy Projected to Hit $368 Billion in 2026

Introduction to the e-Conomy SEA Report

According to the 11th edition of the annual e-Conomy SEA report titled "Building the Intelligent Economy" by Google, Temasek, and Bain & Company, Southeast Asia’s digital economy is growing 17% year-on-year. The report highlights that generative data and technology have become an essential part of daily life for 243 million Southeast Asians, representing 58% of the working population. The technology is scaling four times faster than the rollout of mobile internet, propelling the region's Gross Merchandise Value (GMV) to reach $368 billion in 2026 and placing it on a firm trajectory to exceed $1 trillion by 2035.

Growth Across Key Digital Sectors

Every major digital sector in the region is experiencing growth driven by artificial intelligence implementation. E-commerce anchors the shift with $226 billion in GMV, growing 18% year-on-year, where shoppers utilize multimodal discovery and in-app assistants to drive higher conversions. Online travel reached $59 billion in GMV with 10% year-on-year growth, where generative tools have overtaken social media as the second-most used tool for organizing complex itineraries. Online media generated $44 billion in revenue with a 22% year-on-year increase, and commerce media emerged as a $4 billion market. Mobility and food delivery achieved $40 billion in GMV, a 15% year-on-year growth supported by predictive suggestions and pooled rides. Finally, digital financial services recorded $1,650 billion in Gross Transaction Value, up 16% year-on-year, through fraud detection, credit access, and financial recommendations.

Consumer Trust and Agentic Commerce

Consumer trust is laying the groundwork for the era of agentic commerce in the region. Digital automation is already utilized by 72% of users who rely on everyday features like price tracking. The report notes that 75% of users express willingness to let AI agents autonomously compare prices and complete transactions on their behalf. This momentum is supported by regional optimism, with 62% of people reporting greater trust in AI tools compared to the previous year, driven by track records, familiarity, and output accuracy. Users look for privacy safeguards, capability transparency, and transaction reversal options to feel comfortable.

Infrastructure and Energy Requirements

To support a projected 60-fold increase in regional AI usage over the next five years, the digital ecosystem must evolve. Physical infrastructure requires a threefold expansion in data center capacity over the next five years to meet soaring compute demand. Additionally, facilities must manage strict model and energy efficiency. National frameworks like Singapore’s binding Power Usage Effectiveness rules under the Digital Infrastructure Bill and Malaysia’s Corporate Renewable Energy Supply Scheme model for clean energy access are highlighted as critical components.

Unified Regional Governance and Implications

The upcoming ASEAN Digital Economy Framework Agreement, scheduled for November 2026, will establish a region-wide digital trade pact to unify and accelerate growth across borders. Businesses are encouraged to move beyond answering single questions with AI toward completing multi-step tasks sustainably, supported by clear safety rules and privacy safeguards.