Vietnam a Southeast Asia leader in internet economy growth

By Nguyen Quy October 6, 2019 | 05:05 pm PT

Young people surf Internet on their phones in Tao Dan Park in Ho Chi Minh City. Photo by Shutterstock/Anh Huy.

Vietnam’s digital economy has been booming and is the second fastest-growing market in Southeast Asia after Indonesia, a new report says.

The internet economy of Vietnam has reached a value of $12 billion in 2019, with an annual growth rate of 38 percent since 2015 and is expected to surge to $43 billion by 2025.

These figures are mentioned in the e-Conomy Southeast Asia report 2019 by Google, Temasek - a holding company owned by Singapore's government, and U.S.-based global management consultancy Bain.

"With the gross merchandise value traded over the internet in Vietnam set to account for over five percent of the country’s GDP in 2019, the country is emerging as the most digital of all economies in ASEAN," the report said.

E-commerce is a key driver behind the boom in Vietnam, where homegrown marketplaces like Sendo and Tiki compete with regional players including Lazada and Tencent Holdings Ltd.-backed Shopee.

In 2019, an estimated 61 million Vietnamese went online and the average Vietnamese spent three hours and 12 minutes each day using the Internet on mobile devices like smartphones.

Vietnam's digital economy will account for 20 percent of its GDP by 2025, according to a resolution issued by the Politburo, the main decision-making body of the Communist Party of Vietnam.

The annual report assesses the region’s six largest markets – Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, home to 570 million people, across five sectors: gross merchandise value in e-commerce, online travel, online media, and digital financial services.

Indonesia is the biggest contributor to the internet economy's growth in the region, hitting $40 billion in 2019 at an average growth rate of 49 percent a year. The world’s fourth most-populous country with 264 million people, Indonesia could see its digital economy triple by 2025 to $133 billion, the report said.

The Philippines’s digital economy ranked third with an annual growth rate of 32 percent, followed by Thailand (29 percent), Malaysia (21 percent) and Singapore (17 percent).

Southeast Asia’s Internet economy hit $100 billion for the first time this year, up from $72 billion in 2018 and is expected triple to $300 billion in 2025, becoming one of the world’s fastest-growing arenas for online commerce, thanks to a youthful population increasingly comfortable with smartphones, the report says.