Vietnam’s digital economy to reach US$14 billion this year

Vietnam’s digital economy is expected to reach US$14 billion in 2020, a year-on-year increase of 16%, and will likely reach US$52 billion in 2025, re-accelerating to nearly 29% in compound annual growth rate, according to a report from Google, Temasek and Bain & Company.

Vietnam’s digital economy, digital economy, Vietnam, economy

Source: Internet

According to the report, In Vietnam, with its various stages of social distancing, users turned to the internet for solutions to their sudden challenges. A significant number tried new digital services: 41% of all digital service consumers were new (higher than the SEA average), with 94% of these new consumers intending to continue their behaviour post-pandemic.

E-commerce has driven significant growth in the country, at 46%, alongside strong growth across most sectors, except for travel, it said.

The report also said that Southeast Asia’s digital economy remains resilient at According to the report, In Vietnam, with its various stages of social distancing, users turned to the internet for solutions to their sudden challenges. A significant number tried new digital services: 41% of all digital service consumers were new (higher than the SEA average), with 94% of these new consumers intending to continue their behaviour post-pandemic.Indonesia and Vietnam continued to grow at double-digit rates, and Singapore remains a regional enabler for growth, despite short term GMV decline due to the online travel sector.

The report, which covered Indonesia, Malaysia, Vietnam, Singapore, Thailand and the Philippines, showed that Internet usage in the region continues to multiply, with 40 million new users this year alone. That pushed the total number of internet users in these Southeast Asian countries to 400 million or nearly 70 % of the population.

The coronavirus brought about a permanent and massive digital adoption spurt, with more than one in three digital service consumers (36% of total) new to the service. Of the number, 90% intend to continue their newfound habits post-pandemic, it said.

Many of the new users came from non-metropolitan areas in Malaysia, Indonesia and the Philippines.

The report looked at seven internet economy sectors in Southeast Asia, including e-commerce, transport and food delivery, online travel, online media, financial services, health technology and education technology, with health and education technology added to the 2020 version.

E-commerce is expected to grow by 63% to US$62 billion in 2020 and is poised to hit US$172 billion in 2025.

Digital financial services are also gaining momentum as more small-and-medium-sized businesses have become receptive to accepting online payments. Digital payments are set to grow from US$600 billion in 2019 to US$620 billion in 2020 and could reach US$1.2 trillion by 2025.

The health technology and education technology sectors received a boost from the pandemic as many people turned to online health consultations while schools shifted to remote learning. Investments in those sectors are growing.

Online travel and transport sectors were hit the hardest as the pandemic ground international travel to a halt while many people began to work from home or became concerned about sharing transport. Still, the report predicted online travel to rebound to US$60 billion by 2025.

Source: VNA

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