1. Background- Internet sectors in ID and VN ended 2019 on a successful note, having seen robust growth at scale
RedSeer primary data shows that many Internet sectors in Indonesia and Vietnam ended 2019 on a strong note, with high growth rates despite being multi-billion dollars in GMV already.
For multiple sectors, 2019 was a breakout year of sorts, as they expanded rapidly to new segments. Sectors like E-tailing, Foodtech and E-Wallets in Indonesia would fall into this category, along with E-tailing in Vietnam.
2. However Covid-19 has proven to be a massive black swan event, with cases rising rapidly across ID, VN and broader ASEAN
As these Internet sectors ended their 2019, undoubtedly full of optimism for 2020, the Covid-19 tragedy struck the ASEAN region. With significant impact in both Indonesia and Vietnam, as countries proceeded to move to lockdown stage to control spread of infection- with significant impact of Internet sectors performance.
3. eHealth and E-tailing emerge as short term winners from Covid-19 in ID/VN, while on-demand sectors suffered most
Internet sectors experienced Covid-19 impact differently. The eHealth sector in Indonesia as the biggest beneficiary, while E-tailing held up reasonably well in Vietnam. While on the other side, ride haling was the most severely impacted, especially 2W.
While Foodtech also saw massive dip especially in Vietnam, due to severe constraints on supply/delivery side as well on consumer side.
4. In longer term, we see 4 types of recovery journeys for ASEAN Internet Sectors- basis their growth historically vs during Covid-19
Basis the short term Covid-19 impact and the long-term growth trajectories of Internet sectors in ID+ VN, we bucket them into 4 categories.
We see that for the majority of the sectors, the Covid-19 impact will be either a short hiccup from which a fast recovery will emerge e.g. for Foodtech or Covid- 19 will act has a growth booster that will structurally boost long term demand for that sector.
While relatively slower growing sectors like ride hailing would need to innovate on product to recover fast from the crisis.