Vietnam's digital economy to reach $52 billion by 2025

This rapid growth is underpinned by the country’s extensive digital transformation, with Vietnam’s national digital transformation plan aiming to ensure that more than 80% of households have fiber optic infrastructure by 2025.

In addition to infrastructure construction, sub-sectors in Vietnam's digital economy also bring new opportunities for investors, such as e-commerce, digital financial services, Internet and gaming, IT- enabled services and industry .

Among them, e-commerce and digital financial services have provided tremendous impetus for the growth of Vietnam's digital economy.

E-commerce

Vietnam’s e-commerce market is likely to grow from $2.8 billion in 2018 to $15 billion by 2025, a study has found .

This growth is driven by increased internet access , a relatively young consumer base , and an increasing number of local businesses opting for e-commerce.

As a distribution channel , COVID-19 has accelerated the adoption of e-commerce solutions by businesses and consumers.

According to a recent market survey, the frequency of online shopping in Vietnam increased by 14% in 2020, indicating that more and more consumers are changing the way they shop .

Products with the fastest growth in online consumption include food , beverages , cosmetics , sporting goods , fashion and stationery , and the most commonly used e-commerce platforms by consumers are Shopee , Lazada and Tiki.

However, regional foreign platforms are dominating Vietnam's e-commerce market , such as Lazada and Shopee . However, local e-commerce platforms such as Tiki have signaled expansion plans during the epidemic .

However, Vietnam’s e-commerce market also has policy significance in its pursuit of digital transformation , after all, the National Digital Transformation Plan is actively promoting the adoption of e-commerce by local businesses.

Digital Financial Services

Cash payments remain one of the preferred payment methods in Vietnam . In 2019, only 41% of adults in the country had a bank account, most of whom were in cities.

There are signs that consumer demand for digital financial services may rise as growing internet access and a booming e-commerce market could create opportunities for digital banking , payments and other financial services.

In August 2020, Timo Plus, Vietnam’s first “digital bank”, announced that it would invest in digital financial services through credit and savings products to attract savers who want to break away from traditional banking services.

During the epidemic, consumers' demand for online payments also increased, with digital payments growing 76% in the first quarter of 2020.

These changes in the consumption of financial services have sparked interest among Vietnamese fintech companies . Fvndit , Kim An Group , Timo and NextPay are among the companies that received new capital injections from domestic and foreign investors in 2020.

E-commerce platform

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Southeast Asia