Kuala Lumpur, Malaysia – A recent report from Google, Temasek, and Bain & Company revealed that the digital economy in Malaysia is projected to achieve $31b in gross merchandise value (GMV) in 2024, reflecting a 16% increase from 2023.
In this report, e-commerce and travel rebound were noted to have been driving the country’s expansion, with significant investments in AI infrastructure. Said approach helped to place the country among the top 10 globally in terms of AI search interest.
More specifically, the e-commerce sector grew by 17% to $16b GMV in 2024 as major e-commerce platforms reinvest in GMV growth, paired with the rise of video commerce. Online travel, on the other hand, showed the fastest GMV growth compared to other sectors at 19% year-on-year to reach $8b GMV in 2024.
These figures could be attributed to Malaysia’s international tourism experiencing a robust recovery and expected to exceed pre-pandemic levels in 2024. Additionally, overseas travel spending has increased by 330% since 2020, driven by Malaysians capitalising on travel opportunities, especially to the Asia Pacific region, accounting for 38% of total outbound spending.
Visitors from Southeast Asia were also observed to contribute approximately 49% of the country’s inbound traveller spend, fuelled by various factors such as improved air connectivity, strategic airline partnerships, and a favourable exchange rate.
In terms of food delivery and transport, the report also found that said sector has increased by 10% from $3b GMV in 2023 and to reach $4b in 2024. This steady growth momentum is driven by the recovery of commuter demand and international travel.
Meanwhile, online media in Malaysia has also shown consistent growth, noting its GMV is expected to grow 10% from $3b in 2023 to $4b in 2024. According to the report, these could be driven by the increasing popularity of digital content, games, and streaming services.
Digital financial services further continues on an upward trajectory as various Malaysia’s digital banks offer compelling features and ease of access, contributing to the rapid growth of the DFS landscape. Digital payment is expected to reach $172b in 2024, a 5% increase from 2023. Alternatively, digital wealth is anticipated to expand and achieve an assets under management (AUM) of around $80b by 2030.
Data from the findings also revealed the impact of artificial intelligence in Malaysia’s digital landscape, with said innovation among the priorities of the government. In fact, the government continues to place emphasis on responsible AI development and deployment through its Malaysia AI Roadmap 2021-2025 and upcoming National AI Office (NAIO) launch.
Malaysia is also among the Top 10 countries globally driving AI search interest, especially in the education, marketing, and gaming sectors, with Kuala Lumpur, Putrajaya, and Selangor leading the nation in AI interest.
Malaysia has also recorded a large AI infrastructure investment among SEA countries at $15b in H1’24. The report estimates Malaysia’s current data centre capacity at 120MW and expects that to expand 5X over the coming years.
“As Malaysia assumes the ASEAN Chairmanship next year, we aim to be a regional champion for digital policies that are forward-looking and transformative, to promote a regulatory environment that encourages technological advancement and to nurture cross-border collaboration,” commented YB Tuan Gobind Singh Deo, Minister of Digital, as represented by Mr. Fabian Bigar, the Secretary General of the Ministry of Digital, at the event.
“The e-Conomy report serves as a powerful validation of our efforts and is not merely a report; it is a testament to the immense potential that lies ahead for Malaysia’s digital future. It is a call to action for all of us—the government, the private sector, and the people of Malaysia—to collaborate and realise our nation’s full digital potential. Let us seize this opportunity and together, build a digitally empowered Malaysia that is prosperous, inclusive, and sustainable,” he further shared.
“We have been seeing a consistent strong growth of Malaysia’s digital economy, and this year is another strong testament to the potential of Malaysia’s digital economy. With the region’s focus on AI, it’s encouraging to see the country’s leaders are putting AI and semiconductors on the country’s priority list,” said Farhan Qureshi, country director for Google Malaysia.
“At Google, we are committed to further support the growth of Malaysia’s digital economy by accelerating the local workforce with AI-ready skills and tools. From equipping youths with future-ready skills in AI through Google Career Certificate scholarships to deploying Google Workspace for public officers, we are dedicated to ensuring Malaysia remains at the forefront of the digital age,” added Qureshi.
Meanwhile, Amanda Chin, Partner, Bain & Company, also said, “Southeast Asia’s digital economy continues to do well, with continued double-digit GMV and revenue growth and a surge in profitability across sectors led by key players. Likewise, in Malaysia, we see a healthy digital economy driven by e-commerce, online travel, and digital financial services. As Malaysia’s DFS sector embraces digital disruption, new technologies such as AI are poised to accelerate growth.”
Chin then explained, “To fully harness the transformative potential of generative AI, businesses must advance beyond experimentation and invest in foundational elements—aligning AI initiatives with core business objectives to address real-world problems and create tangible value, strengthen AI talent, and build scalable, adaptable infrastructure for sustained growth.”
“Investments in AI infrastructure and the growing interest of Malaysians in AI technology signal a promising future for the country’s digital economy. As the digital landscape evolves, driven by strategic government initiatives, it is essential to prioritise digital security to safeguard data, maintain trust, and ensure the sustained progress of the digital sector,” remarked Geia Lopez, head of data, insights, and international growth at Google Southeast Asia.
