SINGAPORE -- An increasing number of Southeast Asian people are relying on digital means to purchase products and services, helping the region's internet economy to balloon to more than $50 billion, according to a report by Bain & Co.
The management consulting firm found the number of digital consumers in the region had surged by 50% since last year to 200 million, following a survey of 2,400 people from six members of the Association of Southeast Asian Nations -- Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam -- about their online consumer behavior.
Bain also found that about 230 million Southeast Asian individuals now count as "online engaged consumers" -- meaning that they have at least researched products or services online.
Lower-priced mobile phone models were a significant driver of the region's digital economy, with more Southeast Asian consumers using smartphones. Of the smartphones shipped in Southeast Asia over the past year, 62% were priced at $150 or less, with 89% of internet users in the region using smartphones as their primary connected device. This in turn helped to boost mobile connectivity across the region.
Social media also played a significant role in the region's digital spending. The report found that 85% of users across the six countries use social media and messaging several times a day. At least 90% of respondents in every country surveyed except Singapore said that they had made a purchase using social media or had been influenced by such channels.
"Social is fast becoming a robust channel in its own right as users rely on it to find products, interact with sellers and ultimately make a purchase," Bain & Co. said. Travel and tourism forms the bulk of the region's digital market, with a value of $22 billion in 2016, followed by e-commerce at $15 billion.
As Southeast Asia continues to grow its digital economy, the report warned that the digital sector has taken a toll on certain industries such as shopping malls and travel agencies. Sebastien Lamy, partner at Bain & Co., noted that in Singapore, shopping malls have difficulties finding longer-term tenants as e-commerce grows, with many empty spaces being converted to temporary pop-up stores.
"Southeast Asia has become a proving ground for digitally native companies as well as traditional companies looking to tap into the digital market," Lamy said. "Those that can develop and implement a strategy focused on adaptability, flexibility and reinvention are likely to come out on top."
To get ahead of the digital wave, the report suggested that companies should use digital technologies and innovations to create new products and services, understand more about customers' experiences and reinvent their business.