Vietnam’s digital economy has secured the fastest rate of growth in Southeast Asia this year, with its gross merchandise value (GMV) set to rise 28% annually from US$18 billion last year to US$23 billion this year, said Google, Temasek, and Bain&Company in a report released on October 27.
E-commerce services are growing in Vietnam. (Illustration image)
This impressive performance is partly attributed to the 26% growth of e-commerce services in the country, they said.
According to the report, Vietnam is one of the countries that have quickly resumed socio-economic activities following the COVID-19 outbreak being brought under control. E-commerce has become the driving force behind the country’s digital economy growth, with 90% of digital consumers planning to maintain or even increase their use of e-commerce platforms over the next 12 months. Indeed, a majority of consumers focus on food delivery, at 60%, whilst online shopping makes up 54% of services.
Urban digital users have been most accepting of digital services, with e-commerce, food, and grocery services topping the list at 96%, 85%, and 85%, respectively. On the other hand, the frequency of a Vietnamese person consuming digital content remains lower than the regional average with 23% of survey respondents saying that they watch videos on demand at least once per week, followed by 19% for online gaming, and 16% for on-demand music. These figures highlight that Vietnam still has a lot of growth potential over the long term.
The report also shows local digital financial services (DFS), including payments, remittances, lending, investment, and insurance, continue to flourish in Vietnam. Notably, lending has the fastest compound annual growth rate (CAGR) at 114%, while investment is expected to record the biggest leap in 2025 at a 106% CAGR.
Furthermore, Vietnam leads the region in the long-term growth market of venture capital funds (VCs) with 83% of VCs expecting long-term growth to occur in the country.
Stephanie Davis, vice president for Southeast Asia Google, noted that despite regional and global challenges, the Vietnamese digital economy has enjoyed the fastest growth in the region, with its GMV likely to hit US$50 billion by 2025.
A high-quality domestic workforce in the technology sector and the growing penetration of digital services in urban and rural areas has laid a strong foundation for the country’s digital growth in the future, she said.
According to the report, top digital economies in Southeast Asia, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, all grew faster than expected this year, with these set to reach US$200 billion in total value transactions this year.
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