"Vietnam's digital economy has the potential to reach even higher heights"

DNHN - Vietnam's digital economy has the potential to reach even greater heights, according to a Temasek representative, due to factors including the prevalence of digital applications and the highly skilled domestic technology workforce

Vietnam, which has the highest compound annual growth rate (CAGR) for the digital economy among Southeast Asian nations in 2023 (19% for 2022-2023), will maintain its position as one of the world's most rapidly expanding economies. The digital economy will expand at the highest CAGR of 20% between 2023 and 2025.

The information was presented at the unveiling of the 8th Southeast Asia Digital Economy report, recently organised by Temasek Bain & Company, and Google, with the theme "Conquering new heights: Towards a profitable growth journey." The report updated the digital economy trends of six Southeast Asian countries, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

As a result, private sector investment capital increased marginally in the initial half of 2023 relative to the latter half of 2022, propelled by operations in burgeoning industries. It is anticipated that gross merchandise value (GMV) will increase at a 20% CAGR between 2023 and 2025, from 30 billion USD to approximately 45 billion USD...

The report indicates that the region's GMV continues to rise and is projected to reach 218 billion USD, an 11% increase over the same period last year, despite fluctuations in the global macroeconomy. Additionally, the report indicates that the digital economy in Southeast Asia is projected to generate $100 billion in revenue this year.

Mr. Marc Woo, Google Asia-Pacific's Managing Director responsible for Vietnam, asserts that the digital economy in Vietnam is progressing favorably. Significant sectors are anticipated to sustain their expansion notwithstanding numerous challenges, most notably the domain of digital content, to which the gaming industry contributes predominantly and in which a considerable number of Vietnamese game studios have attained triumph. attain success on an international scale.

Google remains committed to providing extensive support to the domestic digital economy via numerous initiatives throughout the nation, including the promotion of technology startups in Vietnam and investments in domestic talent.

Mr. Andrea Campagnoli, Head of Office and Founding Partner of Bain & Company in Vietnam concurred that the sustained momentum of the digital economy's GMV and revenue growth rates in Southeast Asia is remarkable. anticipated revenue growth in the double digits, surpassing $100 billion by 2023.

Vietnam has maintained, for many years, the fastest-growing economy in Southeast Asia despite the current economic slowdown. Simultaneously, the volume of investments in Vietnam increases positively in the first half of 2023 relative to the same period in 2022. This demonstrates the confidence of investors in the nation's long-term prospects.

The Head of Temasek's Southeast Asia Department, Mr. Fock Wai Hoong, remarked, "Vietnam's digital economy can expand further due to the public workforce and the rising popularity of digital applications." Self-trained, exceptionally skilled domestic technology is propelling innovation. Temasek maintains a positive outlook regarding the trajectory of the digital economy in Southeast Asia and will persist in utilizing catalytic capital to attain sustainable expansion.

A novel aspect of the report, according to the report, is that while high user spending remains a factor in sustaining economic viability, growth potential is contingent on greater economic participation. (n) number.

Additionally, research from Bain & Company, Temasek, and Google indicates that high-spending users (HVUs) remain a factor in sustaining the economy. Nonetheless, expansion potential is contingent on greater digital economic participation.

Even though the top 30% of spenders in Southeast Asia account for over 70% of the transaction value of the digital economy, low-spending users (non-HVUs) also present remarkable growth opportunities.

The HVU group spends 5.4 times more than the non-HVU group in Vietnam. Although expenditures are more likely to increase with HVU over time, non-HVU also presents opportunities for growth in general. The majority of non-HVUs will be more inclined to increase their online spending as consumer demand continues to rise, provided that trust is established and obstacles, such as the requirement for physical product interaction, are properly addressed.

Vietnam's e-commerce sector is projected to increase by 11% between 2022 and 2023, with a corresponding annual compound growth rate of 22% anticipated by 2025. The country aims to achieve a total merchandise value of 24 billion USD this year. 2025. It is anticipated that the tourism sector will recover completely this year, primarily due to the robust expansion of domestic travel. The total merchandise value of online travel is anticipated to reach $7 billion by 2025, expanding at a compound annual growth rate of 21% from 2023 to 2025, an increase of 82% over the previous year. The online media industry, which is projected to reach $4 billion by 2025, is another significant sector that continues to expand and contribute to the promotion of Vietnam's digital economy. These sectors include the transportation and food industries (food delivery services).

Tu Anh (t/h)