Illustrative Image (Photo: weforum.org) Hanoi (VNA) - Vietnam is the fastest growing digital economy in Southeast Asia for a second year in a row and is expected to hold this position until 2025, according to the 8th Southeast Asia Digital Economy report released by Google, Temasek and Bain & Company on November 6.
The report covering Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam reveals despite global economic headwinds, the region’s gross merchandise value (GMV) remains on an upward trajectory, growing at 11 % a year, and is set to reach 218 billion USD.
It says the region’s revenues from the digital economy are poised to hit 100 billion USD this year.
Vietnam’s GMV is expected to grow from 30 billion USD this year to around 45 billion USD in 2025, driven by e-commerce and online travel.
The former will grow by 11% this year, and at a CAGR of 22% between 2023 and 2025, reaching around 24 billion USD.
Full recovery in the travel sector is expected this year, driven primarily by sharp growth in domestic travel. Online travel will grow at 21% to 7 billion USD.
According to the report, the irreversible shift to online continues to drive growth in digital financial services adoption, including digital payments.
While in Southeast Asia digital payments adoption has reached 50%, Vietnam is also embracing digital payments and is the fastest growing country, growing by 19% in 2022 and 2023 and at 13% CAGR in 2023-25.
Strong support from the government, investments by banks and the widespread usage and popularity of QR codes will continue to drive digital payments adoption in Vietnam. Digital payments will accelerate as the central bank promotes cashless payment in rural and remote areas.
Delegates at a ceremony on announcing the 8th Southeast Asia Digital Economy report (Photo: Google) The report cites that it is remarkable that Southeast Asia’s digital economy GMV and revenues continued their double-digit growth momentum, with revenues expected to break the 100 billion USD mark in 2023.
The report also points out that high-value users (HVUs) continue to drive sustainable unit economics but significant growth prospects lie in increasing digital participation.
Marc Woo, Managing Director, Vietnam, Google Asia Pacific, said while over 70% of digital economy transaction values were made by the top 30% of SEA spenders, non-HVUs also represented a significant opportunity.
While HVUs were more likely to increase spending over time, non-HVUs also presented a growth opportunity.
As consumer demand grows, the majority of non-HVUs will increase their online spending if more trust could be built and barriers such as the need to touch and feel products could be addressed, he said.
He added while digital inclusion had made inroads in SEA in recent years, consumers outside of metro areas were at risk of facing a widening digital economic divide.
Hanoi, HCM City and Da Nang were the top three metros leading digital participation in Vietnam but the gap was wide beyond them, he added.
Marc Woo, Managing Director, Vietnam, Google Asia Pacific at the event (Photo: Google) Full recovery in the travel sector is expected this year, driven primarily by sharp growth in domestic travel. Online travel grew by 82% from 2022 to 2023. It will continue to grow at a CAGR of 21% from 2023 to 2025, reaching a GMV of nearly 7 billion USD. The recovery in the number of domestic and international routes have enabled this uptick, despite the delayed return of Chinese tourists.
Other key sectors that continue to grow and help drive Vietnam's digital economy include transport & food and online media. The GMV of transport and food grew by 10% from 2022 to 2023 and are projected to grow at 16% CAGR from 2023 to 2025 and to reach 4 billion USD in 2025. The online media sector in Vietnam grew by 11% from 2022 to 2023, and is projected to reach a GMV of 7 billion USD by 2025 with a CAGR of 15% from 2023 to 2025./.
