Vietnam’s digital economy leads the way thanks to the increasing penetration of digital services in urban and rural areas.
E-commerce continues to be driving force of digital economy
Vietnam’s digital economy has the fastest growth rate in Southeast Asia with gross merchandise value (GMV) expected to increase by 28%, from 18 billion USD in 2021 to 23 billion USD this year, according to a new report released by Google, Temasek and Bain & Company.
The growth driver of Vietnam’s digital economy continues to be based on the strong development of e-commerce. The industry grew 26% over the same period last year.
After the pandemic, Vietnam was one of the countries that quickly restored “new normal” activities. However, some consumption habits and trends formed and promoted during the pandemic are still maintained and continue to develop.
E-commerce has become the driving force in the growth of Vietnam’s digital economy. 90% of digital consumers plan to maintain, or even increase, the use of e-commerce platforms in the next 12 months. The majority of consumers focus on food delivery services (60%) and online grocery shopping (54%).
E-commerce continues to grow, creating momentum for Vietnam’s digital economy in 2022. (Photo: Hai Dang)
The report by Google and its partners is consistent with the new announcement by Lazada. This background assesses that in the new normal, Vietnam’s economy gradually recovers and is expected to continue to grow. Consumers continue to maintain online shopping habits, 8 out of 10 people will continue to shop online for comfort and convenience.
However, with anxiety about the epidemic and global economic fluctuations, consumers tend to consider and save in shopping. As a result, the average spend per customer is lower than it was two years ago.
Specifically, about shopping trends in the last 3rd quarter of 2022, the e-commerce platform said that users will expect to have more experiences on shopping applications, instead of just viewing goods. Besides, there is a wave of consumer preference for Vietnamese goods.
Lazada believes that, besides simply shopping, consumers increasingly want e-commerce to be an integrated destination where they can watch livestreams, play entertaining games, interact with celebrities…
In addition, Vietnamese consumers continue to give more preference to domestic brands. According to the survey, 52% of Vietnamese respondents said that they preferred to choose Vietnamese brands, putting their trust in Vietnamese brands more.
This trend is considered inevitable as Vietnamese domestic brands increasingly diversify products, improve quality, origin and reasonable prices in period of tight spending. In addition, domestic brands are also actively innovating, bringing suitable and highly applicable products to Vietnamese people.
Finance, digital investment grow strongly
In the annual digital economy report of Google, Temasek and Bain & Company, urban digital users in Vietnam have the highest level of digital service adoption, including e-commerce, food and groceries topped the list with 96%, 85% and 85% respectively.
On the other hand, the frequency with which Vietnamese consumes digital content is lower than the regional average, with 23% of survey respondents saying they watch video on demand at least once per week, followed by video on demand. 19% for online gaming and 16% for on-demand music. This shows that Vietnam still has a lot of growth potential in the long term.
Digital financial services (DFS) continue to thrive in Vietnam. The digital lending sector posted the fastest compound annual growth rate (CAGR) at 114%, and the investment sector is expected to see the biggest leap in 2025 at over 106% CAGR.
Furthermore, Vietnam leads Southeast Asia in the long-term growth market of venture capital funds (VCs) with 83% of venture capital funds expecting long-term growth in deals in Vietnam.
“Vietnam topped the rankings this year with the fastest growing digital economy and fastest growing e-commerce in Southeast Asia,” said Stephanie, Vice President of Google Asia Pacific, Head of Southeast Asia.
Despite current global and regional difficulties, Vietnam’s gross merchandise value (GMV) is on track to hit 50 billion USD by 2025.
The high-quality domestic workforce in the technology sector and the growing penetration of digital services in urban and rural areas, according to Stephanie, lay a solid foundation for Vietnam’s digital development in the future.
“Increasing awareness around environmental, social and governance issues will help Vietnam and Southeast Asia build a sustainable growth plan for the digital decade,” said a Google representative.