
Small businesses in Southeast Asia are missing out on the digital revolution
CIO Review APAC | Thursday, October 09, 2025

FREMONT, CA: The pandemic has wreaked havoc on major economies in Southeast Asia, which are still trying to recover from new outbreaks, virus strains, and a fragmented vaccination roll-out. However, as damaging as these limitations have been, they are also proving to be a beneficial driving factor for millions of customers to adapt to new ways of spending and embrace internet commerce, resulting in irreversible changes in consumer behaviour.
According to Bain & Company and Facebook study, eight out of ten customers in Southeast Asia are currently online. To put that number in context, the number of new digital consumers added in the Philippines, Singapore, Malaysia, Indonesia, Thailand, and Vietnam in just one year is equal to the whole population of the United Kingdom.
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The economy of Southeast Asia has been propelled by digital financial services in particular. The significant rise in digital customers has been fueled by the rise of digital payments and greater internet access during the pandemic. The growing trend away from cash payments and increased use of e-commerce, as well as the continued development of new payment mechanisms, particularly for e-wallets and prepaid cards, are expected to push online payments in the region to approach USD1 trillion by 2025.
However, the benefits of becoming digital are not being felt equally by all sectors of the economy, which can be seen as a challenge as well as an opportunity. Millions of small and medium enterprises (SMEs) in Southeast Asia confront severe impediments to digital technology access and use, preventing them from reaping the full benefits of participation in the new economy and realizing their full potential.
SMEs are critical to the Philippine economy, accounting for 99.5 percent of all enterprises and employing 63 percent of the workforce. However, they underperform, accounting for only 36 percent of the economy's value-added services. If SMEs are unable to transition to digital, the gap is projected to widen as economies and cultures throughout the world adopt new methods of conducting business.
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