Southeast Asia is hungry for AI — and the money isn't just in subscriptions

Key points

• Generative AI has reached about 243 million people in Southeast Asia in under three years, or 58% of the working population, according to the e-Conomy SEA report from Google, Temasek and Bain & Company.
• Only 1% to 2% of the region's population pays for personal AI subscriptions, so businesses are earning returns through e-commerce, advertising and other services.
• Southeast Asia's digital economy is projected to reach $368 billion in gross merchandise value this year and exceed $1 trillion by 2035.

Southeast Asia has adopted generative AI quickly, with about 243 million people using it in less than three years, according to the annual e-Conomy SEA report released Wednesday by Google, Temasek and Bain & Company. That figure equals 58% of the region's working population, and adoption has moved four times faster than mobile internet did.

Yet only 1% to 2% of the region's population pays for personal AI subscriptions, leaving a gap between wide use and direct consumer spending. The report projects Southeast Asia's digital economy will grow 17% to $368 billion in gross merchandise value this year and exceed $1 trillion by 2035.

How businesses earn returns

Florian Hoppe, a partner at Bain & Company, told CNBC that companies are finding commercial value from AI in areas such as online shopping and digital advertising. Firms use it to improve e-commerce conversion rates and handle routine customer inquiries, freeing staff for other work, he said. Consumers may also pay indirectly when they buy products developed with AI.

About 69% of shoppers use AI to compare complex purchases such as electronics. Early case studies show AI lifting conversion rates by 10% year on year and raising average spend per order by as much as 75%. Shopee, a Southeast Asian e-commerce platform, now handles roughly 80% of customer queries through AI chatbots, cutting cost per customer contact by 30% year on year.

They're very experimental

— Florian Hoppe, partner at Bain & Company

Consumer attitudes and usage

Hoppe described the region's consumers as showing "pragmatic optimism" toward AI and said they are very experimental and open to new tools. Singapore is among Southeast Asia's early leaders in AI adoption, he added.

The report found 75% of users would let AI agents find the best prices and complete purchases for them, and 62% of respondents trust AI tools more than they did a year ago. Usage per person in the region is still just 10% of U.S. levels. Online travel is projected to grow 10% to $59 billion in gross merchandise value this year, online media revenue 22% to $44 billion, and ride-hailing and food delivery 15% to $40 billion.