Vietnam’s digital economy is rapidly expanding and is expected to reach US$30 billion in 2023 and increase by 20% to reach US$43 billion by 2025.
Growth is being driven by technology adoption across businesses, the rise of key sectors such as fintech, and rising incomes for the middle class, according to a new report from Ho Chi Minh City professional services provider Acryme Vietnam. About. say.
The report, released in September 2024 and supported by Singapore’s United Overseas Bank (UOB), explores the transformation of Vietnam’s digital economy and identifies the key drivers and industries driving growth in the sector. The focus is on emerging trends.
Vietnamese companies leverage technology
The report notes that there has been technological innovation in Vietnam over the past few years, with young people rapidly adopting mobile internet services. Businesses are also undergoing rapid digital transformation, digitizing data, standardizing processes, and adopting new technologies.
2023 Small and Medium Enterprises (SME) Survey by Vietnam Ministry of Planning and Investment (MPI) Found All sectors improved their readiness for digital transformation, increasing their scores by 0.7 to 1.4 points from 2022 to 2023.
A UOB Vietnam study also highlighted this trend, with 87% of the 525 companies surveyed implementing digitalization in their business. Additionally, more than 8 out of 10 companies in Vietnam plan to spend more on digitalization initiatives in 2024, with most companies earmarking an increase in their budget of between 10% and 25%. states.
GenAI, sustainability as a new trend
Several trends are emerging in Vietnam’s burgeoning digital economy. Most specifically, generative artificial intelligence (genAI), which refers to AI systems that can generate new content such as text, images, and audio, is gaining significant attention.
2023 Finastra Survey Found This means that Vietnamese financial institutions are leading the way in introducing genAI worldwide. 40% of Vietnamese respondents surveyed said their organization has implemented or improved natural language processing (NPL) capabilities, including genAI, which is the highest in all markets surveyed. This is the highest among all countries, exceeding Saudi Arabia (39%) and the United States (24%). ) and the UK (24%).
91% of decision makers at financial institutions in Vietnam say they have implemented or are willing to implement genAI. These leaders are interested in using technology in a variety of applications, including collecting, processing, and analyzing data to enhance customer service, improve IT operations, and classify environmental, social, and governance (ESG) criteria. 45% and 44% of respondents prioritize these areas, respectively.
Sustainability is also an emerging trend in Vietnam, with both investors and customers increasingly incorporating ESG factors into their decision-making processes. Furthermore, smart industrial parks, which leverage advanced digital technologies and sustainable practices to improve efficiency, productivity and environmental performance, are becoming more popular due to support growth policies.
According to According to an MPI report, Vietnam currently has 416 industrial parks and more than 1,000 industrial clusters, contributing to about half of the country’s export sales.
Growth drivers driving Vietnam’s digital economy
Vietnam’s digital transformation is supported by many factors. As an example, the country is currently home to a burgeoning startup ecosystem of around 3,800 venture companies. According to to the Ministry of Science and Technology.
Additionally, the COVID-19 pandemic has accelerated digitalization, prompting Vietnamese consumers to embrace e-commerce platforms, digital financial services, online education, and remote work. This has created new opportunities for many companies and prompted them to accelerate their digital transformation efforts.
Furthermore, the increasing purchasing power of the middle class is creating opportunities for Vietnam’s digital economy, increasing demand for information and communication technology (ICT) products, digital tourism, and services provided via digital platforms.
Finally, governments are also actively promoting the growth of the digital economy. 2019 National Innovation Center (NIC) was established In 2019, we will support innovative startups and digital entrepreneurs with a focus on industries such as smart manufacturing, smart cities, cybersecurity, and semiconductors. One year later, the government approved Launch a national digital transformation program by 2025, aiming to transform Vietnam into a digital economy, society and government, and ensure that the digital economy accounts for 30% of the total gross domestic product (GDP) by 2030. There is.
Fintech growth
Finally, Acclime Vietnam’s report highlights fintech as a prominent startup sector in the country. This sector is currently dominated by payments and mobile wallets. In Vietnam, there were 32.77 million active e-wallets by the end of 2023, and payment transactions via internet and mobile channels grew by 52% and 103.3% annually from 2021 to 2023, respectively.
Fintech growth in Vietnam has been driven by booming fundraising activity. Vietnam Innovation and Technology Investment Report 2024 estimate It is reported that from 2013 to 2023, the equivalent of USD 1.04 billion was invested in payment fintech startups in Vietnam, and USD 495 million was directed towards financial services. This highlights the growing dynamism of the industry.
Just last month, private equity firm NextBold Capital announced It announced that it is seeking to raise $100 million in funding to support small and medium-sized businesses in Vietnam, Cambodia, and Laos. The fund will target companies across education, healthcare, consumer goods, technology and agribusiness, further contributing to the growth of Vietnam’s technology sector.
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