Illustrative image (Source: Martech) Hanoi (VNA)
– Vietnam's digital economy is growing at the fastest pace in Southeast Asia with gross merchandise value (GMV) expected to increase by 28%, from 18 billion USD in 2021 to 23 billion USD. There has been 26% growth of e-commerce over the same period in 2021, according to the "e-Conomy SEA 2022" report.
The report, released recently by Google, Temasek and Bain & Company, predicted that Vietnam is set to post a 31% growth in GMV from 23 billion USD in 2022 to 49 billion USD in 2025.
The report said Southeast Asia’s top digital economies grew faster than expected in 2022, and are set to reach 200 billion USD in total value of transactions made this year.
The six major economies covered in the report, namely Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, will achieve the milestone of 200 billion USD by 2025, three years earlier than scheduled.
The 2022 GMV rose by about 20% from 161 billion USD in 2021. “After years of acceleration, digital adoption growth is normalising,” said the report.
Stephanie Davis, Google's vice president for Southeast Asia said that Vietnam ranks first in the group of six leading digital economies in Southeast Asia in terms of growth rate in 2022, of which its e-commerce has the highest growth rate in the region.
She expressed belief that despite existing difficulties in the world and region, Vietnam’s GMV will reach 50 billion USD in 2025.
Southeast Asia continues to see growth in the number of internet users, with 20 million new users added in 2022, raising the total number of users to 460 million.
However, that growth is starting to slow, and was just 4% in 2022 compared to a year ago. That’s compared to a 10% year-on-year increase in 2021 and 11% growth in 2020, at the height of the coronavirus pandemic.
Southeast Asia’s online economy is still on track to reach 1 trillion USD by 2030 as online shopping becomes the norm, according to the report.
“E-commerce continues to accelerate, food delivery and online media are returning to pre-pandemic growth levels, while travel and transport recovery to pre-COVID levels will take time,” the report said.
Digital financial services including payments, remittances, lending, investments and insurance have seen healthy growth from 2021 to 2022, thanks to offline-to-online behavior shifts post-pandemic, wrote the report.
Among these services, insurance recorded the highest, growing 31% year-on-year while lending grew 25% year-on-year.
All the six countries are set to post double-digit growth in GMV from 2022 to 2025. Overall, their Internet economy is predicted to reach 330 billion USD by 2025 if companies put a greater focus on profitability for the next three years.
According to the report, tech investments in SEA remain robust this year. However, the funding landscape tells a tale of two ends: early-stage deals are continuing with strong momentum, while late-stage deals are seeing more pronounced dips and a pause in IPOs. Meanwhile, DFS has overtaken e-commerce in investment volume. Investors will be cautious in the short-term as most do not expect a return to 2021 deal activity and valuation peaks in the next couple of years. Nonetheless, most investors remain bullish in Southeast Asia’s medium- to long-term potential, and have 15 billion USD dry powder on hand. The report also noted the increasing interest in emerging markets, like the Philippines and Vietnam, and in nascent sectors, like SaaS and Web3.
Southeast Asia’s “digital decade” has just begun, it said, noting that the course to exceed 300 billion USD by 2025 depends on the shape of recovery amid today’s uncertainties, while the path to a 600 billion USD-1 trillion USD digital economy in 2030 remains geared on SEA’s economic fundamentals./.
