The report, released by Google, Temasek, and Bain & Company, noted Malaysia’s e-commerce continues to expand at a healthy pace, making up the biggest driver of the country’s digital economy and reaching $20 billion by 2025. The sector has grown 21% year-on-year in GMV, the second-fastest rate in Southeast Asia (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.

Malaysia’s online travel recorded 19% growth in GMV, the fastest in Southeast Asia, driven by improved air connectivity, visa liberalization measures, and large-scale digital tourism campaigns building momentum ahead of “Visit Malaysia 2026”.

Meanwhile, digital financial services show continued double-digit growth, with digital payments set to reach $213 billion USD in gross transaction value (GTV) by 2025.

This momentum is supported by Malaysia’s rapid shift toward cashless payments, including a 28% 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 Southeast Asian markets.

At the regional level, Southeast Asia’s digital economy is projected to surpass $300 billion in GMV by 2025, growing 15% year-on-year 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 digitalized over the past decade, showing strong resilience and monetization capabilities despite global headwinds such as the Covid-19 pandemic, inflation, and supply-chain pressures.