Leveraging the strengths of the digital economy.

SGGP 30/11/2023 05:53

Vietnam had the fastest digital economy growth rate in Southeast Asia in 2023 (compound annual growth rate - CAGR for the 2022-2023 period was 19%) and will continue to be one of the fastest-growing digital economies in the 2023-2025 period.

This assessment was recently released by Google, Temasek, and Bain & Company in their 8th Southeast Asia Digital Economy Report, themed “Conquering New Heights: Towards a Profitable Growth Journey”.

Fastest growth rate in Southeast Asia.

The report indicates that the region's total merchandise value continues to grow and is projected to reach US$218 billion, an 11% increase year-on-year. Revenue from the digital economy in Southeast Asia is expected to reach US$100 billion this year. Vietnam continues to have the fastest digital economy growth rate in Southeast Asia and is projected to maintain this position in 2025 (tied with the Philippines). Vietnam's total merchandise value is expected to achieve a compound annual growth rate of 20%, from US$30 billion in 2023 to nearly US$45 billion in 2025. Growth in merchandise value over the next two years will be driven by e-commerce, online travel , and digital payments.

Paying for purchases in person at Fahasa Bookstore, District 7, Ho Chi Minh City. Photo: HOANG HUNG

“Vietnam’s digital economy has the potential to further increase the prevalence of digital applications, and its highly skilled, self-trained domestic technology workforce is driving innovation,” said Fock Wai Hoong, Head of Southeast Asia at Temasek Group.

Meanwhile, Andrea Campagnoli, Head of Office and Founding Partner of Bain & Company in Vietnam, said: “It is remarkable that the growth rate and revenue of the Southeast Asian digital economy continue to maintain double-digit growth, with revenue expected to surpass US$100 billion in 2023. In particular, Vietnam showed positive growth in investment volume in the first half of 2023 compared to last year.”

Support from online payments

In the development of the digital economy, online payments are indispensable. Among these, QR code payments have become the most popular trend and are gaining increasing share. According to the Napas payment system, in the third quarter of 2023, QR code payments via VietQR doubled in number, reaching over 100 million transactions per month.

According to a representative from the online payment system Payoo, QR code payments on the online platform in Q3 2023 increased by 6% in volume and 30% in value compared to the previous quarter. At the counter, QR code payments increased by 8% in volume and nearly 20% in value, reaching a 44% increase compared to the first three months of the year. Notably, while QR codes were previously only popular in self-operated shopping and dining transactions at stores, they are now also common in bill payments. The number of QR code bill payment transactions in Q3 2023 increased 2.6 times compared to Q2 2023.

Mr. Nguyen Ba Diep, co-founder of the MoMo e-wallet, commented: “With their keenness and quick adaptation to modern trends and technology, young people are a key factor in driving digital transformation and digital payment trends in Vietnam. By actively using digital payments in their daily lives, young people are contributing to creating and spreading a new consumer trend and forming a digital economy.”

Currently, approximately 2.5 million users pay via MoMo for over 90% of public administrative services on the National Public Service Portal, and 1 million users pay for other public services. Simultaneously, 4,260 schools nationwide, including most schools in Ho Chi Minh City, accept tuition payments via MoMo. Similarly, 148 hospitals and clinics nationwide, including all major hospitals in Ho Chi Minh City, have also implemented MoMo payment options.

Based on this data, Mr. Nguyen Ba Diep emphasized that young people are the core force in promoting the digital economy, contributing to the implementation of the national policy of accelerating digital transformation. Mr. Marc Woo, Managing Director for Vietnam of Google Asia- Pacific , stated that Vietnam's digital economy is developing in the right direction, and important sectors are expected to continue to grow despite facing many challenges.

Areas that drive the digital economy.

E-commerce in Vietnam grew by 11% from 2022-2023 and is expected to grow at a compound annual growth rate of 22% by 2025, aiming for a total merchandise value of US$24 billion by 2025. The tourism sector is projected to fully recover this year, primarily driven by strong domestic tourism growth. Online tourism has grown by 82% over the past year and is expected to grow at a compound annual growth rate of 21% from 2023-2025, with a projected merchandise value of US$7 billion. Other key sectors continue to grow and contribute to Vietnam's digital economy, including transportation, food (food delivery services), and online media.

Source: https://www.sggp.org.vn/khai-thac-the-manh-kinh-te-so-post716275.html