Indonesia’s Digital Economy Grows 14%, Nears US$100 Billion, Google Says

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JAKARTA, Investortrust.id — Indonesia’s digital economy has grown 14% year-on-year to nearly US$100 billion in 2025, according to the latest SEA e-Conomy report released by Google, Temasek, and Bain & Company. The strong expansion cements Indonesia’s position as the largest digital economy in Southeast Asia.

Google said the digital sector is transitioning from a phase of hypergrowth to one of sustainable and profitable expansion, driven by the growing adoption of artificial intelligence (AI). “This momentum demonstrates the resilience and massive scale of Indonesia’s digital economy amid global challenges,” said Country Director Google Indonesia Veronica Utami during the report’s presentation in Jakarta on Thursday, Nov 13, 2025.

E-commerce remains the backbone of Indonesia’s digital economy, growing 14% to reach US$71 billion this year. The surge was bolstered by rapid growth in video commerce, which saw transaction value jump 90% to US$2.6 billion.

Indonesia now leads Southeast Asia in the adoption of video commerce, a trend largely supported by the influence of YouTube as a key reference point for consumers before making online purchases.

The online transport and food delivery sector also expanded 13% to reach US$10 billion, while online media—including digital advertising, gaming, and streaming—recorded the fastest growth at 16%, reaching around US$9 billion in total value.

In financial services, the total value of digital payments is projected to soar 27% to US$538 billion in 2025. Google said the sharp rise reflects Indonesia’s strengthening digital fundamentals, underpinned by rapid technology adoption and wide consumer participation.

The SEA e-Conomy 2025 report also highlights the resilience of Indonesia’s digital financial services (DFS) sector, which continues to post robust double-digit growth despite global macroeconomic and regulatory headwinds.

According to Bain & Company’s analysis, digital payment transactions are projected to surge 27% this year to US$538 billion, with total value expected to reach around US$1 trillion by 2030. Digital lending is similarly expanding, with outstanding loan balances estimated to climb 29% to US$13 billion in 2025 and potentially quadruple to between US$30 billion and US$40 billion by the end of the decade.

Digital wealth management and insurance segments, while smaller in scale, are also accelerating. Assets under management (AUM) for digital wealth are forecast to rise 25% to US$6 billion this year, and digital insurance premiums—including both life and non-life—are expected to grow 18% to nearly US$200 million, with the market approaching US$600 million by 2030.

The report underscores how Indonesia’s large, young, and increasingly digital-savvy population continues to drive adoption across payments, lending, investment, and insurance platforms, reinforcing the country’s status as Southeast Asia’s most dynamic digital economy.

“Indonesia is not only leading in scale but also in innovation that shapes the future of ASEAN’s digital economy,” the report stated.

Corporate Balance Sheets Emerge as Key Drivers of Indonesia’s Digital Investment Cycle

Indonesia’s digital economy remains on a steady growth path even as venture capital and private equity funding have slowed over the past few years. The latest SEA e-Conomy 2025 report by Bain & Company shows that private funding across major digital sectors reached only about US$100 million in the first half of 2025, far below the 2021 peak of US$9.1 billion.

Senior Partner Bain & Company Aadarsh Baijal explained that this decline reflects not a loss of confidence, but a structural shift in how digital expansion is being financed. “There are other forms of capital not reflected in VC data — major companies continue to invest from their balance sheets to reinforce their digital capabilities,” Baijal said during a virtual briefing on Thursday, Nov 13, 2025.

Large corporations, particularly in telecommunications, banking, and consumer goods, are now using internal resources to fund digital transformation initiatives, replacing the heavy reliance on external venture funding seen in earlier years. This shift marks the maturing phase of Indonesia’s digital ecosystem, where profitability and long-term integration take precedence over rapid, cash-intensive expansion.

Baijal noted that more than US$120 billion has been invested in Southeast Asia’s digital economy over the past decade, building a foundation for self-sustaining growth. Many established platforms have reached profitability, allowing capital to pivot toward next-generation opportunities such as artificial intelligence (AI), digital infrastructure, and enterprise technology solutions.

 

Indonesia Leads ASEAN in AI Commercial Momentum and Consumer Adoption

The SEA e-Conomy 2025 report also underscores Indonesia’s exceptional progress in artificial intelligence (AI) adoption, both in terms of investment inflows and user engagement. The country recorded the strongest commercial momentum for AI applications in the region, with a 127% year-on-year surge in revenue from AI-featured apps—the highest among ASEAN economies.

Between the second half of 2024 and the first half of 2025, Indonesia attracted US$91 million in private AI funding, accounting for 4% of total AI investments across ASEAN-10. The report noted that 79% of Indonesian consumers have gained exposure to AI through various platforms, reflecting rapid public familiarization with emerging technologies.

AI integration has also reshaped daily digital behavior. Around 80% of users interact with AI-powered tools every day, while 68% engage directly with AI chatbots for inquiries and assistance. Half of Indonesian users now expect AI to enhance decision-making speed and reduce cognitive effort.

Efficiency and personalization remain key motivations for consumers adopting AI features: 51% use AI to save time on research and comparisons, 35% seek personalized recommendations, and 32% value its role in improving security and fraud prevention.

Crucially, Indonesia also stands out for its high level of consumer trust in AI. Ninety-four percent of users are willing to share data with AI systems, compared with an ASEAN average of 50%, and 58% express confidence in the privacy and security of AI-driven platforms—well above the regional benchmark.

This robust combination of commercial growth, consumer engagement, and trust positions Indonesia as a regional leader in AI-driven digital transformation.

Indonesia Becomes Southeast Asia’s Leader in Video Commerce Growth and Adoption

Indonesia has emerged as the largest and fastest-growing video commerce market in Southeast Asia, according to the SEA e-Conomy 2025 report by Google, Temasek, and Bain & Company. The country recorded a remarkable 90% year-on-year surge in transaction volume, reaching 2.6 billion transactions in 2025, as more consumers embraced live shopping and interactive content-driven purchases.

The number of sellers and stores participating in video commerce grew 75% from a year earlier to around 800,000, signaling a rapid shift among small and medium enterprises toward digital engagement strategies. The top 10 sellers in each category now account for about 20% of total category transactions, underscoring an increasingly competitive yet concentrated marketplace.

Fashion and accessories dominate Indonesia’s video commerce segment, contributing 28% of gross merchandise value (GMV), followed by beauty and personal care at 20%, and phones and electronics at 15%. Other growing segments include home and tools, health and baby products, and food and beverages.

Average order value in Indonesia’s video commerce market ranges between US$4.5 and US$6 per transaction—comparable to the regional average—reflecting the broad-based adoption of low-ticket, high-frequency purchases among online shoppers.

The report attributes Indonesia’s leadership in this space to strong social media integration, influencer-driven marketing, and the country’s high digital engagement rates, which continue to set the pace for e-commerce innovation across Southeast Asia.