Ecommerce to grow 16% in Southeast Asia as video, AI reshape shopping

Southeast Asia's digital economy is set to grow 15% in 2025, led by a boom in video-based shopping and AI tools that are changing how people buy fashion, beauty, food and travel services online

Southeast Asia’s e-commerce industry is poised for another year of double-digit growth, powered by video-based retail and AI-driven shopping tools, according to the e-Conomy SEA 2025 report by Google, Temasek Holdings, and Bain & Co., cited by Nikkei Asia.

 

The report projects that gross merchandise value (GMV) for the e-commerce sector will reach $181 billion in 2025 across six key markets — Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam — up 16 per cent from $156 billion in 2024. 

When combined with food delivery, ride-hailing, and travel, the region’s total digital economy is expected to expand 15 per cent to $299 billion, maintaining last year’s growth rate.

Video commerce becomes a growth engine

A key growth driver is video commerce, where consumers buy products through livestreams and short videos. The segment is projected to account for 25 per cent of all e-commerce GMV by 2025, compared to less than 5 per cent in 2022. 

Platforms such as TikTok and other regional players are enabling creators to promote and sell products in real-time.

 

Fashion and accessories lead the segment, contributing 27 per cent of video commerce GMV, with rings and earrings among top-selling products.

 

Beauty and personal care follow at 21 per cent, driven by demand for sunscreens and foundation, the report said.   

 

AI reshaping how people shop

Artificial intelligence is increasingly being used to power product recommendations, personalisation, and inventory management, making the online shopping experience more intuitive. Retailers are deploying AI to improve discovery and optimise supply chains as competition intensifies across Southeast Asia’s mobile-first markets.

 

Other digital sectors on the rise

The report also projects strong growth in related digital verticals: 

• Food delivery is expected to grow 14 per cent to $22 billion.

• Transport services will rise 16 per cent to $11.1 billion, aided by affordable ride-sharing subscriptions.

• Online travel is forecast to expand 11 per cent, though travellers are shortening trips amid higher prices — the average trip duration in Asia-Pacific dropped to 5.3 days, from 6.1 days last year.