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Internet economy rise in Southeast Asia

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Southeast Asia’s internet economy will hit $105 billion this year, as the pandemic crisis prompted stuck-at-home consumers to go online to shop, get food delivered at home, and for entertainment purposes, an industry report said on Tuesday.

The report, which covers Indonesia, Malaysia, Vietnam, Singapore, and the Philippines, said the region added 40 million new internet users this year, taking the total to 400 million. That implies 70% of the region’s population is now online, the report added.

“The virus has brought about a permanent and massive digital adoption spurt,” stated the report by Google, Singapore state investor Temasek Holdings, and business consultants Bain & Co.

Southeast Asia’s internet economy expanded 5% from 2019.

Retailers take advantage of the internet

Online retailers have emerged as winners from coronavirus lockdowns as people prefer to shop from their homes instead of making a trip to stores amid worries over a resurgence in infections. E-commerce grew 63% to reach $62 billion in 2020, to become the largest vertical this year, while the travel sector contracted 58% to $14 billion.

Singapore’s internet economy contracted 24% to $9 billion as the pandemic choked the travel sector, while Vietnam and Indonesia continued to grow at double-digit rates.

The region’s online industry is poised to triple to $309 billion in gross merchandise value by 2025, nearly in line with the $300 billion forecasts made last year.

With an 11% increase in online users, Southeast Asia is one of the world’s fastest-growing internet markets. That compares with around 4.7 billion internet users worldwide, up 7.4% from a year ago, according to wearesocial.com, a digital monitoring service.

Continued growth in internet usage has helped create unicorns such as Grab and Go-Jek, with the region’s startups attracting billions in capital from global technology companies and investment firms.

The deal value has declined since 2018, primarily driven by a slowdown in big-ticket unicorn investments, the Google-Temasek-Bain report said. Still, $6.3 billion worth of deals were struck in the first half of 2020 versus $7.7 billion a year ago.

Investors still have sufficient capital to deploy but are focusing more on companies’ path to profitability.

Singapore Downtown District poeple wearing protective masks for Covid-19, CoronaVirus

South-East Asian countries yearn to revive tourism

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While some South-East Asian countries have gradually reopened their borders to foreign travelers, many feel that the region’s tourism industry has a way to go before it dispels the gloom brought by the COVID-19 pandemic on “a bumpy road” to recovery.

As part of encouraging moves in the region, Singapore is lifting border restrictions for visitors from the Chinese mainland from Friday, the city state’s authorities announced late last week. Visitors must take a Covid-19 test upon arrival and will not need to quarantine if they record a negative result.

Singapore’s move comes on the heels of Thailand welcoming the first batch of Chinese tourists under a special tourist visa program in late October. They were the first foreign arrivals in the tourism-reliant country in seven months.

The visa program was devised by the Thai authorities to restore, incrementally, a sector that by some estimates accounts for more than 10 percent of the country’s GDP, with almost 40 million visitors last year.

In South-East Asia, Thailand is far from alone in having its tourism industry ravaged by the pandemic.

In Indonesia, the number of foreign visitors plunged more than 70 percent from January to September compared with the same period last year.

A strategy of gradual reopening to foreign visitors is a good start for countries in South-East Asia, and China stands out as a target source market for tourists with its record on coronavirus control, said Xu Liping, director of Southeast Asian studies at the Chinese Academy of Social Sciences.

South-East Asia boost cooperation

Thailand was one of the top overseas destinations for Chinese tourists last year, accounting for by far the largest number of visitors by nationality. Some 11 million Chinese visitors put about US$17 billion into the economy.

In a bid to lift its tourism industry out of the doldrums, Thailand plans further moves to open up.

Yuthasak Supasorn, governor of the Tourism Authority of Thailand, said the first phase of reopening will be limited to 1,200 people, a far cry from a monthly figure of around 3 million before the pandemic. A full revival of tourism in South-East Asian nations is some way off, Xu said. “South-East Asia’s tourism sector is still facing a bumpy road ahead. It all depends on the situation with the epidemic,” he said.