Malaysia's digital economy is on track to reach an impressive US$31 billion (RM138.4 billion) in gross merchandise value (GMV) by 2024, marking a 16% increase from 2023. This growth is highlighted in the latest e-Conomy Southeast Asia (SEA) 2024 report by Google, Temasek, and Bain & Company, which indicates that the digital landscape in Malaysia is evolving towards profitability while maintaining robust double-digit growth.
Key Takeaways
- Projected Growth: Malaysia's digital economy is expected to grow by 16% in 2024.
- E-Commerce Dominance: E-commerce remains the largest contributor, projected to reach US$16 billion.
- AI Investment: Significant investments in AI infrastructure are anticipated, totaling US$15 billion in Q1 2024.
E-Commerce Growth
E-commerce continues to be the backbone of Malaysia's digital economy, with a projected growth of 17% this year, bringing its GMV to US$16 billion. Major e-commerce platforms are reinvesting in growth strategies, particularly through the rise of video commerce, which is reshaping consumer engagement.
Online Travel Boom
The online travel sector is experiencing the fastest growth, with a year-on-year increase of 19%, expected to reach US$8 billion in GMV by 2024. This surge is attributed to a robust recovery in international tourism, which is anticipated to surpass pre-pandemic levels. Notably, spending on overseas travel has skyrocketed by 330% since 2020, with the Asia-Pacific region accounting for 38% of outbound expenditures.
Food Delivery and Transport Sector
The food delivery and transport sector is also on the rise, projected to grow from US$3 billion in 2023 to US$4 billion in 2024, reflecting a 10% increase. This growth is driven by the recovery of commuter demand and the resurgence of international travel.
Focus on Artificial Intelligence
Malaysia is emerging as a key player in the global AI landscape, ranking among the top 10 countries for AI search interest, particularly in education, marketing, and gaming. Kuala Lumpur, Putrajaya, and Selangor are leading regions in this trend. As companies increasingly adopt AI to enhance efficiency and customer experiences, the demand for AI infrastructure is expected to grow significantly.
Investment in AI Infrastructure
To support this demand, Malaysia has recorded substantial investments in AI infrastructure, amounting to US$15 billion in the first quarter of 2024. The current data center capacity is estimated at 120 megawatts, with expectations to expand fivefold in the coming years. This investment positions Malaysia as a leader in AI development within Southeast Asia, with approximately 50% of the region's investments occurring in the country.
Conclusion
The outlook for Malaysia's digital economy is promising, with significant growth anticipated across various sectors. As the country continues to prioritize digital transformation and AI development, it is well-positioned to capitalize on emerging opportunities in the global digital landscape.
