Việt Nam to become second largest digital economy in Southeast Asia in 2025

Việt Nam’s digital economy will likely reach US$52 billion in value by 2025.

With gross merchandise value (GMV) of its internet economy accounting for more than 5 per cent of the country's GDP, Việt Nam is emerging as the most digital of all economies in the region.

Last year, the Vietnamese internet economy hit double-digit growth at 16 per cent year-on-year, the highest in Southeast Asia.

The digital service industry is recording the fastest growth and is suitable with Việt Nam’s strengths with a young population who love technology and social networks.

Digital technology and the digital economy will be key drivers helping Việt Nam increase workplace productivity, escape the “middle-income trap”, and realise the objective of becoming a middle developed economy by 2040.

Việt Nam’s internet infrastructure and digital payment services remain limited, however, while the country still lacks a legal framework for digital assets.

With the boom of smartphones, the internet, and social networks, digital technology and digital transformation have developed rapidly in Việt Nam, shaping a fledgling, dynamic digital economy with great potential.

Việt Nam’s digital economy is made up of four main groups: e-commerce, online tourism, digital communications, and logistics technology.

Việt Nam possesses strengths in human resources and Government support, so the country could create a dynamic wave to strengthen the development of its digital economy.

The Party and State have outlined plans to build policies and programmes to join Industry 4.0, focusing on applying and developing science and technology, promoting innovation, and improving the quality of human resources.

Other targets are to achieve universal access to fibre-optic internet and 5G services, completion of digital government development, and the establishment of smart cities in key economic zones nationwide, and connection with regional and global networks of smart cities.

Vietnam remains an attractive innovation hub with strong growth fundamentals and a growing digital ecosystem, attracting foreign investment in the digital market.

The pandemic has paved the way for the increasing digital consumption in Vietnam’s e-commerce market, posting the fastest growth rate in Southeast Asia. Vietnam is the third-largest e-commerce market in Southeast Asia just after Indonesia and Thailand.

More than 70 percent of Vietnam’s population has internet access, 50 percent have used online shopping, and 53 percent have used e-wallets or online payments.

The increase in the usage of e-wallets, payments via smartphones and QR codes, and high demand for instant purchases such as buy-now-pay-later have contributed to fintech and e-wallet penetration reaching 56 percent in 2021 from 16 percent in 2017.

The digital economy has become an important development trend in many countries as the COVID-19 pandemic is profoundly transforming all socio-economic activities from in-person to contactless based on the digital infrastructure.

Vietnam is among the most dynamic countries in the development of the digital economy with improvements and breakthroughs over the years.

The opportunities for digital economic development in Vietnam rely on a young and tech-savvy population and a high ratio of smartphone usage.

The huge potential of the digital economy can only be translated into important resources when opportunities are capitalised on and efforts are made to remove the barriers to the digital economy.

It will be the legal basis for Vietnam to create a set of statistical criteria in line with international standards in order to accurately measure the size of the digital economy. It will also ensure feasibility and effectiveness in implementing resolutions, strategies and programmes on digital economic development.