Thailand is expected to remain the second-largest digital economy in Southeast Asia in terms of gross merchandise value (GMV) from 2023 to 2030, according to data in the "eConomy SEA 2023" report.
Thailand's GMV is expected to expand to US$100-165 billion in 2030, up from an estimated $49 billion in 2025 and $36 billion in 2023, according to the report prepared by Google, Temasek and Bain.
For the region, Thailand is the second-largest digital economy behind Indonesia. Indonesia's digital economy is estimated at $210-360 billion in 2030, up from $109 billion in 2025 and $82 billion in 2023.
The report analysed five main sectors, covering e-commerce, travel, food and transport, online media, and digital financial services.
This year the Southeast Asian digital economy is set to deliver $100 billion in revenue, growing at a 27% compound annual growth rate (CAGR) from 2021, estimated the report.
E-commerce, travel, transport and media contributed $70 billion in revenue. The focus on monetisation has not come at the expense of consumer engagement and GMV growth, according to the report. GMV is expected to grow by 11% to $218 billion in 2023.
Travel and transport are on track to exceed pre-pandemic highs in 2024, while e-commerce is showing resilience. Online businesses are moving from acquiring users at high costs, to deepening engagement with existing customers in a bid to steer the focus to profitability. The report said GMV will continue its upward trajectory through the rest of the decade.
Digital economy will continue to be a major growth driver in the region, noted the report. Thailand's digital economy GMV is expected to have a 17% CAGR during 2023-25, higher than the projected nominal GDP CAGR of 6% for the same period. The GMV is projected to have a 13% CAGR during 2025-30 compared with 5% CAGR for nominal GDP.
For Thailand, the travel recovery will drive near-term economic growth, but e-commerce offers the main thrust in reaching a $50 billion digital economy in 2025, noted the report.
E-commerce is the largest contributor to Thailand's digital economy with GMV of $22 billion in 2023, expected to expand to $30 billion in 2025 and $60 billion in 2030.
The GMV for online travel is estimated at $5 billion this year, rising to $8 billion in 2025 and $15 billion in 2030. For transport and food this year, GMV is estimated at $3 billion, rising to $4 billion in 2025 and $10 billion in 2030.
The GMV of online media is projected at $5 billion in 2023, $7 billion in 2025, and $15 billion in 2030.
According to the report, Thailand will see moderate growth driven by an improving economy, increases in private consumption and the gradual return of foreign tourists.
Exports are contracting slower than expected, with the government projecting a slight rise by the end of 2023. Thailand's growth will be relatively moderate compared with the rest of the region, with promising long-term fundamentals, noted the report.
Inbound travel is rebounding, but at a slower pace than expected. Thailand's heavy reliance on tourism revenues means the country was more adversely affected than the rest of the region, especially as arrivals from China remain below pre-pandemic levels.
New government policies, such as visa waivers for Chinese visitors and other initiatives by the Tourism Authority of Thailand, are paving the way for a full recovery by 2024, noted the report.
Meanwhile, regulators are pushing the digital financial service sector towards the underserved. The central bank plans to issue new digital banking licences in 2024 that are designed to provide better customer experiences and increase the reach of financial services across Thailand. The PromptPay account-to-account payment system expansion will support this effort, connecting more Thais to the financial infrastructure, said the report.
For Thailand, the gross transaction value (GTV) of digital payments in 2023 is estimated at $134 billion, rising to $176 billion in 2025 and $310 billion by 2030.
Digital lending is estimated at $12 billion in 2023, $21 billion in 2025, and around $65 billion in 2030.
The GTV of digital insurance is estimated at $800 million in 2023, $1.1 billion in 2025 and $2.5 billion in 2030, while digital wealth is projected at $12 billion in 2023, $23 billion in 2025 and $110 billion in 2030.
High-value users
The report noted as businesses pursue an accelerated path to profitability, engaging high-value users (HVUs) has become critical to achieving sustainable unit economics.
HVUs are defined as the top 30% of online spenders with an outsized contribution to digital economy spending. The top 30% of Southeast Asian spenders account for more than 70% of the digital economy spend, and they can be found everywhere.
This is accentuated in gaming, travel and transport. In the longer term, companies will need to embrace a broader set of customers to continue growing in a sustainable way and unlock the region's full monetisation potential.