SOUTHEAST ASIA DIGITAL ECONOMY 2025 Southeast Asia digital

SOUTHEAST ASIA DIGITAL ECONOMY 2025 Southeast Asia digital economy Report shows that the digital market of Southeast Asia is estimated to grow to more than US$ 200 billion by 2025, multiplied by more than 6 from US$ 31 billion in 2015. Google and Temasek, a Singaporean stateowned investment company, have recently collaborated together to produce this report on the digital economy of Southeast Asia and its evolution to 2025. Proprietary Google Data Secondary Data Sources Data Source Expert Interviews Temasek Research

SOUTHEAST ASIA DIGITAL ECONOMY 2025 Research Scope: Sectors Geographies First-Hand e. Commerce Indonesia Travel Singapore Media Malaysia Philippines Thailand Vietnam

SOUTHEAST ASIA DIGITAL ECONOMY 2025 1. SEA –Fastest growing internet region (14% 5 year CAGR) with an existing internet user base of 260 m growing to 480 m users by 2020. 2. Consequently, the SEA internet economy is going to grow to $200+ billion by 2025; driven mostly by the growth of first hand ecommerce market (32% CAGR over next 10 years) followed by online media (18% CAGR) and online travel (15% CAGR). 3. First hand ecommerce market is going to outpace the growth of offline retail market (32% v/s 7% 10 year CAGR) with potential of reaching a rapid $88+ billion mark compared to a sluggish potential of reaching $120 billion in the retail offline sector. Lack of big-box retail; access particularly difficult in remote islands. A burgeoning youth population with 70% under the age of 40. Rapidly growing middle class to grow by 5. 3% over the next 10 years. Growth Driving Factors Unique to SEA

SOUTHEAST ASIA DIGITAL ECONOMY 2025 Growth Driving Areas: • SEA can be a $200 bn internet economy with $40 -50 bn of additional investments over the next 10 years (SEA GDP grows at 5. 3% CAGR). Number of Transactions (27% 10 -year CAGR) Online Travel: to reach $90 bn by 2025 (15% CAGR) Hotel + Airlines: Compose 85% of total online travel market (15% CAGR) Carriers: Majority driver of growth in SEA (35% of gross booking) and higher online penetration (55% for regional carriers) Online rides: (Uber, Grab) should reach $13 bn (18%CAGR). Active riders to reach 29 mn. Online media: (ads and gaming) will contribute to $20 bn by 2025 (10% of total GMV).

SOUTHEAST ASIA DIGITAL ECONOMY 2025 Report Overview: � SEA ready to take off with 124 k users coming online everyday for the next 5 years. � 260 M users already online on the 4 th largest internet market in the World. � 3. 8 M users coming online every month with SEA being the fastest growing internet market in the World. � With 700 M mobile connections the SEA has mobile phones that are 130% of the total population there. � With Indonesia being the fastest growing nation in the World, SEA is going t have the fastest growing internet market (480 M users by 2020). � ASEAN is going to equal the growth in internet users growth with India over 2015 -20 (14% CAGR). � Thailand (9% CAGR 2015 -20), Singapore (3% CAGR 2015 -20), Indonesia (19% CAGR 2015 -20), Vietnam (13% CAGR 2015 -20), Philippines (11% CAGR 2015 -20) and Malaysia (5% CAGR 2015 -20). Ecommerce and Travel to make >90% of total online retail spend. First hand goods. Second hand goods. �

SOUTHEAST ASIA DIGITAL ECONOMY 2025 5 key systemic changes required: � Thriving Young Population: 70% of SEA population is under the age of 40(vs. 57% in China). � Increase n Internet speed and penetration: Internet speeds in SEA are expected to reach global average (23. 3 mbps) with more than 80% of the population � GDP Growth: SEA as a region has a nominal GDP of about $2. 5 trillion USD(larger than India) growing at 5. 3% over the next 10 years. � More Conducive Payment Ecosystem: Payment Ecosystem is expected to accelerate with increased access to financial system, going from 0. 7 acct/capita +1 acct/capita. � Lack of store access: Organized retail store available per capita is significantly less than developed markets.