Malaysia's Digital Economy To Reach US$31 Bln In 2024 - Report

KUALA LUMPUR, Nov 26 (Bernama) -- Malaysia's digital economy is poised to reach US$31 billion (RM138.4 billion) in gross merchandise value (GMV) in 2024, an increase of 16 per cent from 2023. 

According to the latest e-Conomy Southeast Asia (SEA) 2024 by Google, Temasek and Bain & Company, the country's digital economy has progressed towards profitability while maintaining double-digit growth for GMV. 

Google Malaysia country director Farhan Qureshi said Malaysia's digital economy has charted consistent growth and this year is another strong testament of the potential of Malaysia's digital economy. 

"With the region's focus on artificial intelligence (AI), it is encouraging to see the country's leaders are putting AI and semiconductors in the country's priority list," he told a media briefing at the release of the report here today. 

According to the report, deeper digital.participation among users, effective monetisation strategies and the recovery of pandemic-impacted sectors are expected to drive continued growth. 

The report said e-commerce remained the largest contributor to digital economy, as the sector grew by 17 per cent to US$16 billion (RM71.44 billion) GMV this year as major e-commerce platforms reinvest in GMV growth paired with the rise of video commerce. 

Online travel posted the fastest GMV growth compared to other sectors at 19 per cent year-on-year to reach US$8 billion (RM35.71 billion) GMV in 2024 as Malaysia's international tourism is experiencing a robust recovery and expected to exceed pre-pandemic levels in 2024. 

The report said spending on overseas travel has jumped 330 per cent since 2020 as Malaysians take advantage of opportunities to travel abroad, though primarily in the Asia Pacific region, which accounted for 38 per cent of outbound expenditures. 

Meanwhile, food delivery and transport has grown 10 per cent from US$3 billion (RM13.39 billion) GMV in 2023 and to reach US$4 billion (RM17.86 billion) in 2024, driven by the recovery of commuter demand and international travel. 

Farhan said Malaysia was 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. 

As more companies deploy AI to innovate, improve efficiencies and customers’ experiences as well as bring new ideas to life, the demand for AI infrastructure will continue to grow. 

To meet this demand, Malaysia has recorded a large AI infrastructure investment among Southeast Asian countries at US$15 billion (RM66.97 billion) in the first quarter of 2024. 

The report estimates Malaysia's current data centre capacity at 120 megawatts and expects that to expand five times over the coming years. 

"When we look at Malaysia, the significant things that we should be celebrating when we talk about AI as a journey, about 50 per cent of investments in Southeast Asia are really happening in Malaysia," said Farhan. 

-- BERNAMA