The latest report of Google, Temasek and partner Bain & Company shows that Vietnam’s digital economy has the second highest growth rate (after Indonesia) compared to other countries in the region, the digital economy is forecast to reach 12 billion US dollars this year and reach 43 billion dollars in 2025.
The Southeast Asia Digital Economy Report 2019 (e-Conomy Southeast Asia 2019), conducted by Google, Temasek and partner Bain & Company, publishes specific figures of Southeast Asia digital economy, including 6 largest markets, which are Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
The report shows that Vietnam’s Internet economy is currently booming with an annual growth rate of 38% since 2015. The value of the digital economy is estimated at $ 12 billion in 2019 and $ 43 billion in by 2025, including areas such as e-commerce, online travel, online media and technology ride.
In terms of absolute size of the market, it is estimated that in 2019, Vietnam is ranking below Indonesia ($ 40 billion) and Thailand ($ 16 billion), in the same position with Singapore and higher than Malaysia ($ 11 billion) and the Philippines ($ 7 billion).
However, compared to the ratio of GDP, Vietnam leads the remaining 6 countries in Southeast Asia. Accordingly, the proportion of GMV (total value of goods transactions on the online platform) accounted for more than 5% of GDP (GDP figures have not been adjusted to increase) in 2019, higher than Indonesia at 4%.
“Vietnam is emerging as the most digital economy in the region,” the evaluation reports.
According to the report, Vietnam and Indonesia are the two breakthrough markets in the trend of developing the digital economy compared to the rest of the region, with the growth rate exceeding 40% a year, while those other countries have the growth rate from 20-30% annually.
The report also identified that the main factor that is driving the impressive numbers is the e-commerce market, where domestic markets like Sendo and Tiki compete with regional players like Lazada and Shopee.
Specifically, the size of the e-commerce market is about $ 5 billion, while online travel is around $ 4 billion, online communication reaches $ 3 billion, and tech car calls are around $ 1 billion.
In 2019, Vietnam has 61 million Internet users. The average time that Vietnamese people spend on using the Internet on mobile devices is 3 hours and 12 minutes, focusing on a group of social networking and communication applications (52%), video-watching apps (20%) and games (11 %), same apps for work.
Vietnam has also become the third largest source of investment capital in the region for Internet-based companies, with $ 600 million from early 2018 to the first half of 2019. A number of investment deals In MoMo, Sendo, Topica from international investors, contributing to making Vietnam become the destination of investment.
Meanwhile, in the whole region, in the first 6 months of this year, internet companies raised $ 7.6 billion, about 7% higher than the same period in 2018.
The report also estimates that the value of Southeast Asia’s internet economy has exceeded the $ 100 billion mark (GMV index) in 2019, up 40% from the previous year and has tripled compared to the 2015 milestone, accounting for 3.7% of total GDP. As such, Southeast Asia is closing the gap with developed markets like the US, which accounts for 6.5% of GDP.
Dung Nguyen
* Source: Saigon Times