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 significant 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 emphasizes the country's ongoing digital transformation and profitability.
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: Malaysia is leading in AI infrastructure investments in Southeast Asia, with US$15 billion recorded in Q1 2024.
- Travel Sector Recovery: Online travel is anticipated to grow by 19%, reaching US$8 billion in GMV.
Consistent Growth in Digital Economy
According to Google Malaysia's country director, Farhan Qureshi, the digital economy has shown consistent growth, with 2023 serving as a strong testament to its potential. The report indicates that deeper digital participation, effective monetization strategies, and the recovery of sectors impacted by the pandemic are key drivers of this growth.
E-Commerce: The Largest Contributor
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, particularly with the rise of video commerce, which is reshaping consumer engagement.
Online Travel Sector on the Rise
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 exceed 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 Growth
The food delivery and transport sectors are also on the rise, with a projected growth of 10%, increasing from US$3 billion in 2023 to US$4 billion in 2024. This growth is driven by the recovery of commuter demand and the resurgence of international travel.
AI Infrastructure Investment
Malaysia is emerging as a leader in AI search interest globally, particularly in education, marketing, and gaming sectors. The report highlights that Kuala Lumpur, Putrajaya, and Selangor are at the forefront of this interest. To support the growing demand for AI, Malaysia has recorded significant investments in AI infrastructure, totaling 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.
Conclusion
The outlook for Malaysia's digital economy is promising, with substantial growth anticipated across various sectors. As the country continues to prioritize AI and digital transformation, it is well-positioned to capitalize on emerging opportunities, ensuring a robust and sustainable economic future.
