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Southeast Asia: An Emerging Market With Booming Digital Growth

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Southeast Asia: An Emerging Market With Digital Growth Potential

Southeast Asia: An Emerging Market With Digital Growth Potential

When it comes to economic growth in Asia, the focus often falls on China.

However, while China’s story is continually staggering in its scale, the Chinese economic powerhouse is only a part of a much wider story in Asia.

Just like China, rapidly-growing countries like Vietnam, Indonesia, Cambodia, and The Philippines are also seeing their economies transform in meaningful ways – and Southeast Asia as a whole is becoming one of the most exciting regions for technological adoption, foreign investment, and digital innovation in the world.

Today’s infographic comes to us from Sea, and it helps shed some light on the digital wave that’s powering the growth across a geographically expansive and tremendously diverse region.

A Digitizing Economy

With a younger population, growing affluence, and people that are increasingly tech-savvy, the internet population in Southeast Asia is expected to swell from 260 million to 480 million between 2015 and 2020.

More and more business is being done online in the region – and as a result, it is estimated that by 2025, the digital economy in Southeast Asian countries will be worth a hefty $197 billion.

That’s an impressive 640% increase over the size just a decade prior.

Sectors to Watch

Which parts of the digital economy will see the most impact?

According to proprietary data from Google and investment company Temasek, the most interesting sectors to watch in the region should be in e-commerce, digital entertainment, online travel, and digital financial services.

Est. growth in market size (%) between 2016-2021
Greater Southeast AsiaU.S.China
E-commerce261%23%196%
Digital entertainment145%n/a54%
Online travel90%15%172%

E-commerce, which is expected to grow by 261% between 2016 and 2021, is one of the region’s most explosive sectors. With a lack of physical retail stores and limited choice of goods in Southeast Asia, rapidly-growing access to the internet provides a new means for people to shop.

Further, the travel and transportation market is also expected to boom with a 90% increase by 2021, and this will be driven by growing ridership in taxi-on-demand services. The area will also see its digital entertainment sector – defined as the combined mobile and PC gaming markets – grow at nearly triple the pace of China over the coming years (145% vs 54%).

Lastly, mobile payments is another sector to watch, as tech enables Southeast Asians to “leapfrog” traditional payment technologies like physical bank or credit cards. By 2021, mobile payments will have a 43% market share in the region.

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Markets

Charted: What are Retail Investors Interested in Buying in 2023?

What key themes and strategies are retail investors looking at for the rest of 2023? Preview: AI is a popular choice.

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A cropped bar chart showing the various options retail investors picked as part of their strategy for the second half of 2023.

Charted: Retail Investors’ Top Picks for 2023

U.S. retail investors, enticed by a brief pause in the interest rate cycle, came roaring back in the early summer. But what are their investment priorities for the second half of 2023?

We visualized the data from Public’s 2023 Retail Investor Report, which surveyed 1,005 retail investors on their platform, asking “which investment strategy or themes are you interested in as part of your overall investment strategy?”

Survey respondents ticked all the options that applied to them, thus their response percentages do not sum to 100%.

Where Are Retail Investors Putting Their Money?

By far the most popular strategy for retail investors is dividend investing with 50% of the respondents selecting it as something they’re interested in.

Dividends can help supplement incomes and come with tax benefits (especially for lower income investors or if the dividend is paid out into a tax-deferred account), and can be a popular choice during more inflationary times.

Investment StrategyPercent of Respondents
Dividend Investing50%
Artificial Intelligence36%
Total Stock Market Index36%
Renewable Energy33%
Big Tech31%
Treasuries (T-Bills)31%
Electric Vehicles 27%
Large Cap26%
Small Cap24%
Emerging Markets23%
Real Estate23%
Gold & Precious Metals23%
Mid Cap19%
Inflation Protection13%
Commodities12%

Meanwhile, the hype around AI hasn’t faded, with 36% of the respondents saying they’d be interested in investing in the theme—including juggernaut chipmaker Nvidia. This is tied for second place with Total Stock Market Index investing.

Treasury Bills (30%) represent the safety anchoring of the portfolio but the ongoing climate crisis is also on investors’ minds with Renewable Energy (33%) and EVs (27%) scoring fairly high on the interest list.

Commodities and Inflation-Protection stocks on the other hand have fallen out of favor.

Come on Barbie, Let’s Go Party…

Another interesting takeaway pulled from the survey is how conversations about prevailing companies—or the buzz around them—are influencing trades. The platform found that public investors in Mattel increased 6.6 times after the success of the ‘Barbie’ movie.

Bud Light also saw a 1.5x increase in retail investors, despite receiving negative attention from their fans after the company did a beer promotion campaign with trans influencer Dylan Mulvaney.

Given the origin story of a large chunk of American retail investors revolves around GameStop and AMC, these insights aren’t new, but they do reveal a persisting trend.

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