Vietnam, which has one of the smallest e-commerce markets in Southeast Asia, is in a hurry to catch up.
Vietnam expects its digital economy to represent 20% of the country’s gross domestic product by 2025, the government website reported, citing a draft decision by the prime minister. The National Party Congress, which meets every five years, has set a target for the digital sector to make up 30% of GDP by 2030.
It’s an ambitious reach: Vietnam’s digital economy currently accounts for just 8.2% of GDP. Euromonitor International estimates e-commerce represented a mere 3% of Vietnam’s retail market last year, the smallest slice among Southeast Asia’s major economies, the VietnamNet news website citing a report of Ministry of Information and Communications official.
Clicks for Retail
Online shopping’s slice of total retail in Southeast Asia in 2020
Vietnam’s officials expect 80% of the population to have online payment accounts by 2025, according to the government’s post, Xuan Quynh Nguyen reported on Bloomberg.
That’s also when they want half of e-commerce transactions — many of which are still conducted in cash — to go cashless.
The government isn’t alone in wanting change. Vietnam’s young and tech savvy population – more than half of the 98 million citizens own smartphones – is attracting foreign tech investors, including Warburg Pincus LLC, Goodwater Capital LLC and Alibaba Group Holding Ltd.
Digital Economy Booms
Major Southeast Asia Internet economies by value
Between 2016 and the first half of 2020, investors funneled $1.9 billion into Vietnam’s online sector, according to a study by Alphabet Inc.’s Google, Temasek Holdings Pte and Bain & Co. showed.
The country’s digital economy is forecast to grow to $52 billion by 2025 from 2020, expanding nearly 30% per year, according to the same study, according to Bloomberg