South-east Asia’s digital economy is projected to grow 17% to USD$368 billion in 2026, driven by expanding e-commerce activity and the growing adoption of artificial intelligence across consumer and business transactions.
South-east Asia’s digital economy, encompassing e-commerce, online travel, online media and mobility services, alongside a growing digital financial services sector, has become an increasingly important driver of regional growth as consumers and businesses shift more activity online. Its expansion is creating opportunities for companies to reach customers across borders, while intensifying competition for consumer spending. According to the latest e-Conomy SEA report, published by Google, Temasek and Bain & Company, the region’s digital economy is projected to reach $368 billion in gross merchandise value (GMV) in 2026, up 17% year on year. GMV measures the total value of goods and services sold through digital platforms. The report projects that it could reach $1.14 trillion by 2035.
E-commerce remains the region’s largest digital sector, with GMV expected to rise 18% to $226 billion in 2026. Artificial intelligence (AI) is also influencing how consumers discover and purchase products, with 69% of shoppers using AI to compare complex purchases such as electronics, according to the report. Businesses are increasingly using AI to personalise recommendations, improve customer engagement and support transactions, while online travel, digital financial services and online media contribute to the wider expansion.
Investment activity in the region’s digital economy has been boosted by major infrastructure transactions, although the headline increase in funding does not necessarily reflect a broader recovery in private investment. Companies attracted $21 billion in funding in the first half of 2026, exceeding the $11 billion recorded throughout 2025. However, the increase was largely driven by two major data centre deals involving ST Telemedia Global Data Centres and DayOne. Meanwhile, the number of private funding deals fell 28.4% in 2025 to 421, according to Reuters‘ coverage of the research.
Nitin Gajria, Google’s Managing Director for Southeast Asia and South Asia Frontier Markets, said unlocking the region’s potential in AI-driven commerce would require clear governance, transparent capabilities and responsible deployment, particularly as consumers begin entrusting AI agents with more complex purchasing decisions. The findings suggest that the next phase of digital commerce growth will depend not only on greater AI adoption, but also on businesses’ ability to translate that adoption into measurable commercial value while maintaining consumer trust.