Google, Temasek, and Bain & Company today launched the 10th edition of the e-Conomy SEA Report 2025, revealing that Malaysia is now the fastest-growing digital economy in Southeast Asia with an increase of 19 percent year-on-year (YoY), and on track to reach Gross Merchandise Value (GMV) US$39 billion (approximately RM161 billion*) this year.
This shift towards resilient growth is supported by sustained consumer adoption and stable macroeconomic conditions, including contained inflation.
At the regional level, Southeast Asia’s (SEA) digital economy is projected to surpass US$300 billion (approximately RM1.24 trillion*) in GMV by 2025, growing 15 percent YoY and outperforming the region’s first forecast by 1.5 times.
As the world’s fifth largest economy with a population of over 680 million, Southeast Asia has rapidly digitalised over the past decade, showing strong resilience and monetisation capabilities despite global headwinds such as Covid-19, inflation and supply-chain pressures.
Key findings in the Malaysia report:
Malaysia’s performance this year is underpinned by the strength and maturity of its digital economy
Online travel recorded 19 percent growth in GMV, the fastest in SEA, driven by improved air connectivity, visa liberalisation measures and large-scale digital tourism campaigns building momentum ahead of “Visit Malaysia 2026”.
With inbound travel accelerating more than 20 percent YoY in the first half of 2025, Malaysia is benefitting from both rising traveller volumes and higher-value trips as visitors opt for better-quality and digitally enabled travel experiences.
These trends reflect a digital sector that is increasingly defined by stable adoption, efficiency and deeper value creation across both consumers and businesses.
E-commerce continues to expand at a healthy pace, making up the biggest driver of the country’s digital economy, reaching US$20 billion (approximately RM83.3 billion) by 2025. The sector has grown 21 percent YoY in GMV, the second-fastest rate in SEA.
This was supported by rising platform consolidation with large regional players leveraging significant economies of scale, and expanding video commerce engagement that converted attention into sales with minimal friction.
Digital Financial Services (DFS) show continued double-digit growth, with digital payments set to reach US$213 billion (approximately RM887 billion) in Gross Transaction Value (GTV) by 2025.
This momentum is driven by Malaysia’s rapid shift toward cashless payments, including a 28 percent surge in digital payment usage reported by Bank Negara Malaysia, and cross-border acceptance has scaled significantly with the DuitNow QR standard now interoperable across an increasing number of SEA markets.
Malaysia’s rise as one of Southeast Asia’s core AI and digital infrastructure hub
Malaysia’s digital economy is also strengthened by strong investments in digital infrastructure. Data centre capacity has increased to 690 MW in H1 this year from 120 MW in 2024, and plans have been reported to further increase capacity by 350 percent.
This represents half of all planned regional capacity. In 2024, Google has also committed a US$2 billion investment in the country, including the development of its first Google data center and Google Cloud region to meet the growing demand for AI-ready cloud services locally and around the world.
Positive investment climate, driven by funding and IPO activity and strong investments in digital infrastructure.
The country captured 32 percent of all private AI funding across SEA, at US$759 million (approximately RM3.14 billion), supported by major digital financial services deals. Malaysia also led Southeast Asia in IPO activity, contributing half of the region’s listings over the last 12 months.
This uptick in exits signals a more stable investor environment, reinforcing Malaysia’s position as a competitive destination for high-growth technology companies and digital expansion.
Investor sentiment is optimistic, with nearly two-thirds (64 percent) of surveyed investors expecting funding activity in the country to rise through 2030, particularly in software, services, AI and deep tech.
Ben King, Managing Director, Google Malaysia & Singapore said, “Malaysia’s digital economy is showcasing a positive growth trajectory. This momentum is fueled by several critical factors – robust sector growth, a healthy funding landscape, and strong digital infrastructure investments.
“But it is high AI adoption that is accelerating this progress. With three in four Malaysian digital consumers having used GenAI tools, this strong daily engagement is laying a solid foundation for the next phase of AI-powered growth. In line with the nation’s goal of becoming a regional digital leader by 2030, Google remains fully committed to supporting Malaysia’s ambition to build an inclusive, innovative, and AI-ready digital economy."
“Southeast Asia’s digital economy has shown extraordinary growth and remarkable resilience, sustaining momentum despite periods of investor caution and a shifting macroeconomic landscape over the last decade. Malaysia now stands at the forefront as Southeast Asia’s fastest-growing digital economy, on track to reach US$39 billion in GMV by 2025,“ said Amanda Chin, Partner, Bain & Company.
“Powered by robust growth across e-commerce, online travel, cashless payments, and expanding AI-ready infrastructure, Malaysia is cementing its position as a digital leader in the region. The real opportunity now lies in how businesses harness AI as a catalyst for impact while building on Malaysia’s strong digital foundations.”
Malaysia’s digital progress is expected to bring meaningful benefits to consumers and businesses, including improved travel services, broader access to secure and convenient digital financial solutions, and expanding opportunities in AI, cloud services and digital skills development.
GMV includes only e-commerce, food delivery, transport, online travel, and online media, while revenue includes digital financial services in addition to GMV sectors. Figures for 2016-2024 cover SEA-6 markets, while 2025 figures include the rest of ASEAN-10 and are based on annualised results from H1 2025. The number of internet users spans ASEAN-10.
*Currency exchange rate is USD 1 to RM4.16, as of Nov 20, 2025.
This content is provided by Hexa-Communications.
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