KUALA LUMPUR: Malaysia's digital economy is set to reach US$31 billion in gross merchandise value (GMV) in 2024, marking a 16 per cent increase from the previous year.
This growth is part of the broader positive trend identified in the latest report on e-Conomy Southeast Asia (SEA) 2024 by Google, Temasek, and Bain & Company.
Bain & Company partner Amanda Chin said Southeast Asia's digital economy continues to do well, with continued double-digit GMV and revenue growth and a surge in profitability across sectors led by key players.
Likewise in Malaysia, Chin said the company has seen a healthy digital economy driven by e-commerce, online travel, and digital financial services.
"As Malaysia's digital financial services (DFS) sector embraces digital disruption, new technologies such as AI are poised to accelerate growth.
"To fully harness the transformative potential of Generative AI, businesses must advance beyond experimentation and invest in foundational elements," she said in a statement.
Meanwhile, Google Malaysia country director Farhan Qureshi said the company has been seeing a consistent strong growth of Malaysia's digital economy, and this year is another strong testament of the potential of Malaysia's digital economy.
With the region's focus on artificial intelligence (AI), Frahan said it is encouraging to see the country's leaders are putting AI and semiconductors on the country's priority list.
"At Google, we are committed to further supporting the growth of Malaysia's digital economy by accelerating the local workforce with AI-ready skills and tools.
"From equipping youths with future-ready skills in AI through Google Career Certificate scholarships to deploying Google Workspace for public officers, we are dedicated to ensuring Malaysia remains at the forefront of the digital age," he said.
According to the report, e-commerce continues to be the largest contributor to Malaysia's digital economy, with the sector expected to see a 17 per cent increase, reaching US$16 billion in GMV in 2024.
This growth is attributed to reinvestment from major e-commerce platforms in their GMV strategies, coupled with the rise of video commerce, which has become an increasingly popular method for online selling.
Meanwhile, the report said the online travel sector is witnessing the fastest GMV growth, expected to surge by 19 per cent year-on-year, reaching US$8 billion in 2024, driven by the strong recovery of Malaysia's international tourism, which is anticipated to exceed pre-pandemic levels.
On food delivery and transport services, the report said it is set to grow by 10 per cent in 2024, reaching $4 billion in GMV. This steady growth is driven by the recovery in commuter demand and international travel.
The report also highlighted that online media in Malaysia has shown consistent growth with its GMV expected to grow 10 per cent from US$3 billion in 2023 to US$4 billion in 2024, driven by the increasing popularity of digital content, games, and streaming services.
Additionally, the report said digital financial services continue on an upward trajectory as various Malaysian digital banks offer compelling features and ease of access, contributing to the rapid growth of the DFS landscape.
"Digital payment is expected to reach US$172 billion in 2024, a 5 per cent increase from 2023, while digital wealth is expected to significantly expand and reach an assets under management (AUM) of approximately US$80 billion by 2030," it added.