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E-commerce is the biggest segment, and sales are expected to reach US$185 billion this year, while revenue is projected to hit US$41 billion.<\/span><\/p>\n This was driven by significant economies of scale for leading platforms in the region, as well as the rapid expansion of video commerce.<\/span><\/p>\n \u201cShoppertainment\u201d fuelled the growth of video commerce, which is expected to account for 25 per cent of e-commerce sales, compared with less than 5 per cent in 2022.<\/span><\/p>\n Mr Florian Hoppe, a partner at Bain and Company, a global consultancy, said buyers want to engage with sellers.<\/span><\/p>\n \u201cThese creators, they put up 30 plus monthly videos, engage constantly, they need to be relatable,\u201d he said.<\/span><\/p>\n Online travel was the next biggest segment of Southeast Asia\u2019s growing gross merchandise value, with growth supported by high airfares and accommodation rates as well as the relaxation of visa schemes.<\/span><\/p>\n The report also found a cautious uptick in private funding in Southeast Asia, which grew around 15 per cent from a year ago to around US$8 billion.<\/span><\/p>\n More than US$2 billion of funding went to AI-related start-ups in the past year, said Mr Fock Wai Hoong, head of Southeast Asia at Temasek, Singapore’s state investment firm.<\/span><\/p>\n \u201cWhile the majority of these AI companies are based in Singapore as its regional or global hub, we see the proliferation of AI usage across the broader region,\u201d he said.<\/span><\/p>\n Singapore is home to nearly 500 active AI start-ups, out of almost 700 in the region.<\/span><\/p>\n As the leading regional AI hub, Singapore secured US$1.31 billion in private AI funding from the second half of 2024 to the first half of 2025.<\/span><\/p>\n Over the same period, Singapore received 55 per cent of all AI investments into the 10 Southeast Asian countries included in the report.<\/span><\/p>\n Singapore\u2019s attractiveness and strength is also having a spillover effect, causing Southeast Asia to be \u201cglobal magnet for AI infrastructure\u201d, said Ms Chadha of Google.<\/span><\/p>\n Singapore is reaching its energy consumption ceiling, and cloud providers are turning their focus to neighbouring nations such as Malaysia.<\/span><\/p>\n The total capacity of data centres in the region is expected to grow by around 180 per cent, faster than the growth projected for the rest of the Asia-Pacific region.\u00a0<\/span><\/p>\n In a separate briefing for the media, Mr Fock of Temasek said AI continues to be an area that the company will focus on.<\/span><\/p>\nINVESTMENTS INTO AI<\/span><\/h2>\n