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38 per cent of Singaporean small and medium and enterprises (SMEs) thought they would not have survived Covid-19 without selling on digital platforms.

This is according to the e-Conomy SEA 2020 report, a multi-year research program launched by Google, Temasek and Bain & Company, which covers the internet economy of six Southeast Asian countries.

Merchants believe digital platforms helped them survive during Covid-19

In comparison, a slightly lower average of 35 per cent of SMEs across all the Southeast Asian countries covered -- Indonesia, Malaysia, the Philippines, , Singapore, Thailand, and Vietnam --  felt the same.

The country with the highest percentage of merchants who indicated this was Malaysia, with 43 per cent of them believing digital platforms helped them survive during the pandemic.

In addition, the majority of the 3,000 Southeast Asian SMEs that were surveyed believed that online platforms deliver positive impact, though about 30 per cent of them opined that it was "too expensive" to adopt digital platforms.

Meanwhile, 82 per cent of the businesses surveyed anticipate over half of their sales to come from online sources in the next five years, and 84 per cent expect over half of their supply purchases to happen online in the same duration.

Its sixth edition, this is the first time the report has included a section to SMEs in the region, surveying 3,000 businesses in the six countries.

This year's report covers five leading sectors in the internet economy, such as e-Commerce, transport and food, online media, online travel, and financial services, as well as two "nascent" sectors -- healthtech (healthcare technology) and edtech (educational technology).

E-commerce experienced biggest growth

While last year's internet economy was described as "resilient" amid challenging circumstances due to Covid-19, the e-Conomy report described this year's situation as a "resurgence" due to strong economic rebound.

Singapore's Gross Merchandise Value (GMV) in 2021 is expected to hit US$15 billion (S$20 billion), a 35 per cent year-on-year surge. The e-commerce sector is the leader of the pack, reporting a growth of 45 per cent.

Meanwhile, the transport and food sector grew by 35 per cent, online travel grew by 28 per cent, and online media reported a growth of 15 per cent.

According to Rohit Sipahimalani, the Chief Investment Strategist at Temasek, the pandemic has led to accelerated and enduring digital adoption in Southeast Asia, which has propelled the internet economy in the region to new heights.

He added that Singapore will continue to play an "integral role" in driving growth in the region's internet economy as a gateway for funding and talent, and an attractive tech hub.

Southeast Asia GMV to hit US$1 trillion by 2030

The report also forecasted that the internet economy in Southeast Asia could reach US$1 trillion (S$1.35 trillion) GMV by 2030, as the region enters the "Digital Decade" and undergoes "seismic shifts" in consumer and merchant behaviour.

For context, the GMV for 2021 sits at US$174 billion (S$234.67 billion).

According to the report, sectors such as e-commerce, online grocery, transport and food, and online media are expected to drive the growth.

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