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Vietnam’s digital economy – abundant room for growth

Vietnam’s digital economy – abundant room for growth

Wednesday 19, 10 2022
Digital economy is an inevitable trend globally and in Vietnam. The potential and room for development for the digital economy in Vietnam are abundant enough for domestic and foreign enterprises.

The development of Vietnam’s digital economy

Digital economy is an inevitable trend globally and in Vietnam. The country is pushing for the digital economy's development, deeming it the breakthrough of the fourth industrial revolution.

VietnamCredit - SEA Digital Decade

In 2021, the report “e-Conomy SEA 2021 - Roaring 20s: the SEA Digital Decade” stated that Vietnam’s digital economy was worth about 21 billion USD, 7 times higher compared to 2015. It is predicted that the country’s digital economy would reach 220 billion USD in gross merchandise value by 2030, ranking second in the region behind Indonesia.

Under the influence of the COVID-19 pandemic, Vietnam remains an attractive innovation hub in the region and the world with trade and investment activities skyrocketing, reaching a record high of 1.37 billion USD, focusing on the fields of e-commerce, finance, health, and education, etc.

Currently, over 50% of ministries, branches, and localities across the country have developed and implemented programs, projects, and plans for digital transformation. Applying modern science and technology has helped the field of e-commerce to have many positive changes. In the first 6 months of 2021, Vietnam has 8 million new consumers on digital platforms. Many individuals and businesses apply internet and technology services to buy and sell products and services.

The potential of digital economy in Vietnam

The room for the digital economy to grow in Vietnam remains abundant. Dr. Nguyen Hoa Cuong - Deputy Director of the Central Institute for Economic Management, assessed that the digital economy in Vietnam developed higher than expected. Out of 99 million people, there are about 72 million Facebook users, 30 million Viber users, etc. The number of people using digital social platforms is very large, with the average time using applications related to social networks being 2.5 hours/person/day.

VietnamCredit - Economic Management

The Government aimed to push for the digital economy to account for 20% of Vietnam’s GDP by 2025. According to the latest statistics of the National Digital Transformation Department, as of June 2022, the share of the digital economy in GDP has reached 10.41%, a sharp increase from 9.6% at the end of 2021. However, it is still quite far from the target set for 2025 of 20% of GDP.

The impressive development of the digital economy in Vietnam and the tendency of people to become digital consumers is also mentioned in the report "SYNC Southeast Asia" by Meta Corporation and Bain & Company. newly announced. According to the report, 8 out of 10 people of working age in Vietnam are digital consumers. The average contribution of e-commerce to total retail sales in Vietnam reached 15% in the past year, higher than the 10% increase in India and 4% in China.

The report “SYNC Southeast Asia” also makes the following statement: Vietnamese digital consumers are becoming savvier, switching brands more often, and increasing the number of shopping platforms to find a better value, with 22% of online orders being made across various e-commerce platforms. Value was one of the key drivers of this behavior, as "better price" was chosen as the top reason to switch platforms, followed by product quality and faster delivery times. The number of online platforms used by Vietnamese consumers grew from 8 in 2021 to 16 in 2022.

Mr. Khoi Le, Country Director of the Vietnam Market of Meta Group, said that young workers and rising incomes create opportunities for e-commerce to continue to develop in Vietnam. Businesses in Vietnam can thrive if they focus on the right direction, build integrated channel strategies, and flexible supply chains, and apply new tools and technologies to interact with digital consumers. digital

Vietnamcredit - Vietnam Market

In addition, thanks to cutting-edge thinking, Vietnam is now among the top markets in terms of the adoption rate of future technologies such as financial technology (fintech) and cryptocurrencies, augmented reality, virtual world, and NFT. In the past year, 58% of digital consumers in Vietnam have used fintech solutions.

According to Mr. Khoi Le, the use of digital technology in Vietnam is at a ripe point and is mainly driven by features and convenience. 7 out of 10 digital consumers in Vietnam have used metaverse technology in 2022. In particular, Vietnam has the highest VR adoption rate among Southeast Asian countries, with 29%.

 

Compiled by VietnamCredit

 

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Vietnam Economy

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