Vietnam advised to make full use of sharing economy

Hanoi (VNA) – Vietnam is in a favourable position to take advantage of development opportunities brought by the sharing economy, Chargé d’Affaires at the Australian Embassy in Vietnam Rebecca Bryant stated at a conference on this kind of economy in Hanoi on July 12.

According to Bryant, with a well-educated and young population and almost 70 percent of people owning smart phones, the country’s economy stands to benefit significantly from these developing technologies.

She said that one of the greatest changes in recent years has been the development of the sharing economy, which is estimated to grow from 14 billion USD in 2014 to 335 billion USD by 2025, increasing by 22 times within 10 years.

“So while the sharing economy is still in its infancy at the moment, it will inevitably become a major part of the economy – both at a national and global level,” she noted.

Sharing the same point of view, Nguyen Thi Tue Anh, deputy director of the Central Institute for Economic Management, stated that the nature of the sharing economy is a new business model which takes advantage of digital technologies, thus reducing transaction costs and accessing a big number of customers through digital foundation.

The sharing economy is different from the traditional model, as all transactions have been implemented only by a third party. It provides more choices to customers with cheaper prices. Individuals joining in the sharing economy can be part-time to provide them more jobs and increasing income.

The sharing economy has developed in the sectors of transport service (Uber, Grab, Lyft and Zipcar), tourism and hotel (Airbnb, VRBO), labour (Homejoy and Handy, TaskRabbit, Upwork), and financial service (Kickstarter, Indiegogo, Lending Club).

The sharing economy will become a consumption trend in the future and expand to different sectors in the upcoming time, Anh said, adding that people in developing countries are expected to join in resources sharing with others more than in developed ones.

Sharing economy can also create new business methods, opening new business opportunities based on digital foundation and the fourth Industrial Revolution, she noted.

“With the sharing economy, the market would become more competitive with diversified services, thus bringing benefits to consumers. Moreover, it would also bring more investment opportunities, creating jobs ad increasing incomes,” she added.

The sharing economy can be an opportunity for Vietnam’s administrative reform toward e-government to effectively participate in the digital economy and Industry 4.0, while helping save natural resources, make use of abundant assets, protect the environment, and foster the development of a renovation and startup ecosystems, she noted.

However, the sharing economy can also have potential challenges, making new relations arise and causing benefit conflicts with traditional business methods.

“These challenges could be named as unequal competition, economic concentration and lack of tools to protect consumers online. State management agencies could struggle to control the new models, especially financial duties,” Anh stated.

Therefore, she suggested the Government continue improving the business environment to adapt with the rapid development of the digital economy while ensuring equality between the new model and traditional one. Suitable policies should be studied to encourage the model development.

The building of an e-government and information and technology foundation should be accelerated, especially building an open data system to serve for State management on the sharing economy model, she added.

Deputy Minister of Planning and Investment Vu Dai Thang said Vietnam has not been an exception in the development of business model.

According to him, both benefits and risks for the economy and consumers have been seen. It was the reason for the building of new policies and amending the current regulations has been vital to fully tap into opportunities brought by the sharing economy while minimising negative impacts.

He added that Vietnam has been studying international experience on the impacts of big trends of digital technologies to the economy. This can help the Government have necessary information to provide a suitable strategy in the wave of the Fourth Industrial Revolution.-VNA