5 Fastest Growing Sectors in Southeast Asia in 2023
Southeast Asia is a diverse and rapidly growing region with a wide range of industries and sectors experiencing strong growth. Below we explore 2023's top five fastest growing sectors in Southeast Asia and delve into the trends and opportunities driving this growth.
E-commerce is simply the buying and selling of goods and services online, and in Southeast Asia it has become an increasingly popular form of commerce in recent years. With a large and growing middle class, more and more people in the region are turning to online platforms to purchase a wide variety of goods and services. This trend is expected to continue in 2023. Consumer data analyst group Satatista predicts Southeast Asian e-commerce sales to be $158.9 billion in 2023. This growth is expected to continue at an annual of rate of twelve percent for the next four years. A key factor driving this growth is the increasing availability and affordability of internet and mobile technology, making it easier for people to shop online. Additionally, e-commerce companies like Lazada are investing heavily in logistics and delivery infrastructure, making it more convenient for people to receive their purchases.
The COVID-19 pandemic has had a profound impact on the healthcare industry in Southeast Asia, with a significant shift towards digital healthcare solutions. This includes telemedicine, remote patient monitoring, and the use of electronic medical records. Last year, Tech In Asia reported that investors in this sector invested over $100 million USD more in the first half of 2021 than the entirety of 2020 alone. In 2023, the digital healthcare sector is expected to see strong growth as people continue to prioritize their health and as technology improves. The increasing availability of mobile health apps and telemedicine platforms make it easier for people to access healthcare services remotely, which also contribute to driving this growth. Additionally, the use of electronic medical records is helping to improve the efficiency and accuracy of healthcare delivery.
Financial technology, or fintech, refers to the use of technology to improve and automate financial services. This sector is growing rapidly in Southeast Asia, with a large number of startups entering the market and offering innovative solutions such as mobile payments, online lending, and robo-advisory services. Jenfi is of course one of the many companies in this sector offering online lending to companies operating in digitally-enabled businesses.
In 2023, the fintech sector is expected to see significant growth as more people in the region gain access to financial services through digital platforms. The proliferation of mobile phones and increased internet access in Southeast Asia has made it easier for people to access financial services online. Additionally, the rise of digital currencies and blockchain technology is opening new opportunities for financial innovation.
As concerns about climate change and the need for sustainable energy sources continue to grow, the renewable energy sector is expected to see strong growth in Southeast Asia in 2023. This includes solar, wind, and hydroelectric power, as well as biofuels. Many countries in the region are investing in renewable energy as a way to meet their growing energy needs while also reducing their carbon emissions. Just last year Forbes reported on a $2.4 billion dollar investment toward the development of a solar farm on Batam, an Indonesian island just 44 kilometers south of Singapore. One of the key drivers of this growth is the increasing cost competitiveness of renewable energy technologies, making them an attractive alternative to fossil fuels.
Additionally, government policies and incentives are supporting the growth of the renewable energy sector. Following the Paris Agreement, the region has renewed its commitment to reducing emissions. The Association of Southeast Asian Nations (ASEAN) set a target that calls for 35 percent of installed power capacity to be renewable energies by 2025. And the majority of ASEAN members further committed to renewable energies by agreeing to a target of net zero for the year 2050. Early this year the International Renewable Energy Agency (IRENA) hosted an event to further explore ASEAN's renewable energy prospects with the goal of promoting renewables within the region, furthering the support for renewable energies.
Education technology, or edtech, refers to the use of technology to improve and enhance education. This sector is growing rapidly in Southeast Asia, with a large number of startups offering online learning platforms, educational software, and other innovative solutions.
Southeast Asian countries currently have substantial populations dispersed over large geographical distances while having a limited number of educators that can reach these populations. These conditions result in an ideal environment for edtech to flourish. Increasing availability of internet and mobile technology, and technological developments that make that connectivity possible, mean that educators can provide increased access to education in areas that previously would have been left under serviced.
A growing middle class in Southeast Asia is also driving demand for higher quality education and training. This group drives competition in the edtech sector as potential students and parents of potential students: explore edtech options that enhance traditional education; seek out services that produce higher quality results; and, perhaps most importantly, take the opportunity to pursue educational services beyond the limitations of physical location. Growing competition in this market is also pushing the rise of edtech services that support teachers and help them to become more competitive.
In addition to all the factors listed above, the Covid-19 Pandemic led to a rapid acceleration of growth in this sector that has drastically changed the edtech landscape. In 2020 edtech usage tripled from what it had been in the previous year and $54 million USD was invested directly in the sector. Edtech is expected to see strong continued growth in 2023 as more people in the region seek out ways to learn and improve their skills.
Each of the sectors discussed above are driven by a combination of technological advancements, economic and demographic trends, and regulatory and policy changes. They offer a wide range of opportunities for businesses and investors looking to tap into the growth potential of this dynamic and rapidly growing region. Jenfi itself is a part of the fintech sector, but in addition to that we are in a unique position that allows us to recognize the importance of the other sectors in this article as well. The potential of the e-commerce market is something we have built our company in response to. It is our mission to help businesses in the e-commerce market expand and grow. We also offer support to those who provide the software that facilitates other sector’s operations, these sectors include: edtech, telemedicine, and many other markets that continue to grow in the digital market.