Vietnam’s internet economy reaches a total value of $14 billion in 2020, which is one of the fastest growth rates in Southeast Asia, according to a Google report.
The report on Southeast Asia’s internet economy released by Google, Temasek, and Bain & Company pointed out that Vietnam and Indonesia’s digital economies are still growing at double digits.
In Vietnam, with its various stages of lockdowns, users turned to the internet for solutions to their sudden challenges. A significant number tried new digital services: 41 per cent of all digital service consumers were new (higher than the SEA average), with 94 per cent of these new consumers intending to continue their new habit post-pandemic.
Vietnamese were spending 3.1 hours online (for personal use) pre-COVID-19, which spiked to 4.2 hours at the height of lockdowns, and now rests at 3.5 hours per day. With eight out of 10 users viewing technology as very helpful during the pandemic, it has become an indispensable part of people’s daily lives, Vietnam Investment Review, a local media reported.
HealthTech and EdTech have played a critical role during the pandemic, with impressive adoption rates to match. Even so, these sectors remain nascent and challenges need to be addressed before they can be commercialised at a larger scale. Nonetheless, the boost in adoption, compounded with fast-growing funding, is likely to propel innovation in this space over the coming years.
E-commerce has driven significant growth in Vietnam at 46 per cent, alongside strong growth across most sectors, except for travel. Overall, 2020 GMV is expected to reach a total value of $14 billion in 2020, having grown at 16 per cent on-year. Looking at 2025, the overall e-conomy will likely reach $52 billion in value, re-accelerating to around 29 per cent compound annual growth rate.
The report shows that internet usage in Southeast Asia continues to multiply, with 40 million new users this year alone. The region remains in the throes of COVID-19, and its economic impact is still unfolding. Already evident, however, is that the coronavirus has brought about a permanent and massive digital adoption spurt, with more than one in three digital services consumer (36 per cent of total) being new to the service, 90 per cent of whom intend to continue their newfound habits post-pandemic.
E-commerce, online media, and food delivery adoption and usage have surged this year, while transport and online travel have suffered significant challenges. Ultimately, the net effect is that the internet sector will remain resilient at $100 billion GMV by year-end 2020, and is poised to grow to over $300 billion GMV by 2025, a clear indication that momentum has not been derailed by the year’s challenging environment. The crisis will also boost digital financial services, as consumers and small- and medium-sized enterprises become more receptive to online transactions, according to the Vietnam Investment Review.
By Thanh Van