e-Conomy SEA 2025 Report: The State of Malaysia’s Digital Landscape

In our previous blog on Google’s e-Conomy SEA 2025 Report, we unearthed Vietnam’s impressive digital economy performance as it registered strong double digit growth across all sectors. However, it’s worth noting that Malaysia, despite a consumer base that’s less than half of Vietnam’s, managed to grow exponentially. Also, it recorded even better performances in e-commerce and online travel.

But Malaysia’s digital economy didn’t take off because of good showing in only one or two sectors, rather it was a direct outcome of a range of factors, which we shall discuss in this blog ahead. So, here are the major  highlights of the report.

1. 19% Growth in Digital Economy

Malaysia’s digital economy grew by a whopping 19% to reach $39B in 2025. This growth came on the back of solid performances in e-commerce, online travel, online media, and transport and food.

While the e-commerce sector witnessed a 21% surge, online travel grew by 19%. Industries like online media and transport and food also grew by 13% each.

2. Great Appetite for AI-Powered Decision Making

Malaysia recorded a highly favorable AI stance as 74% of Malaysian users acknowledged engaging with AI on a daily basis.

Also, Malaysia with $759 of AI investments, saw the second highest private funding in the AI sector. Malaysia seconded Singapore, which recorded $1.31B of private funding in AI. While Singapore accounted for 55% of the funding, Malaysia’s AI investments made up for 32% of the outlay in the Southeast Asian market.

3. Higher-Value Video Commerce with Strong Seller Growth

Malaysia’s video commerce landscape was characterized by higher-value shopping and relatively lower seller competition. The sector continued to expand steadily, supported by rising seller participation and consistent transaction growth.

The market was home to around 350K sellers and stores, reflecting a sharp 40% year-on-year increase. At the same time, transaction volume reached 700M, marking a 10% annual rise. Notably, the top 10 sellers in every category accounted for 25% of total transactions, indicating strong concentration among leading players. With average order values ranging between $8 and $10 per order, Malaysia’s video commerce ecosystem leaned toward higher-ticket purchases and was only next to Singapore’s $20-$25 of average order value.

4. Digital Finance Matures With New Players And Policies

Digital payments surged in 2024, with Bank Negara Malaysia reporting a 28% year-on-year growth in transactions. Cross-border acceptance has also scaled, with the DuitNow QR standard now interoperable across an increasing number of SEA markets that now includes Cambodia.

On the lending front, the new Consumer Credit Act will require buy-now-pay-later (BNPL) and other non-bank lenders to be licensed and report to credit agencies. The competitive landscape is also evolving, with two digital banks opening this year to make five altogether, expanding access and competition. Each is backed by strong ecosystem players and pursuing distinct value propositions, from Islamic finance to leveraging Malaysia's first home-grown large language model, ILMU.

5. Tourism Accelerates, With A Digital Push In The Works

After welcoming approximately 25M tourist arrivals in 2024, inbound travel continued to accelerate in H1, growing over 20% year-on-year. This tourism boom has been supported by visa liberalisation policies and increased air capacity.

Malaysia is gearing up for its ‘Visit Malaysia 2026’ campaign by partnering with a major online travel platform to launch digital tourism campaigns at scale, leveraging rich traveller insights to refine marketing and optimise pricing in pursuit of a 45M visitor target.

Bottom Line

Malaysia’s performance in the e-Conomy SEA 2025 Report reflects a digital economy that is scaling with structure and strategic intent. Despite a smaller consumer base, the country matched regional growth leaders, powered by diversified sectoral gains, strong AI adoption, and a rapidly maturing digital finance ecosystem.

Beyond headline growth, Malaysia’s strength lies in its balance—higher-value video commerce, policy-backed financial innovation, and a tourism revival amplified by digital strategy. As investments deepen and regulatory frameworks evolve, Malaysia is steadily reinforcing its position as one of Southeast Asia’s most resilient and future-ready digital markets.

To delve deeper into the report, click here to read the full report.

We’ll be back with more insightful blogs on the e-Conomy SEA 2025 Report. Till then, stay tuned