Vietnam aims digital economy to represent 20 pct of GDP

By Long Bui   August 14, 2021 | 05:49 pm PT
Vietnam aims digital economy to represent 20 pct of GDP
A person makes online purchases using a credit card. Photo by Shutterstock
Vietnam is in a hurry to catch up with the world in terms of digital economy in general and e-commerce in particular, according to Bloomberg.

It wants its digital economy to account for 20 percent of its gross domestic product (GDP) by 2025, the government website has reported, citing a draft decision by the prime minister. The National Party Congress, which meets every five years, has set a target for the digital sector to make up 30 percent of GDP by 2030.

It is an ambitious reach, as the country’s digital economy currently accounts for just 8.2 percent of GDP.

Euromonitor International has estimated that e-commerce represented a mere 3 percent of Vietnam’s retail market last year, the smallest slice among Southeast Asia’s major economies.

The country wants 80 percent of the population to have online payment accounts by 2025, according to the government’s post. That is also when they want half of e-commerce transactions, a lot of which are still conducted in cash, to go cashless.

Its young and tech savvy population, with more than half of the 98 million citizens owning smartphones, is attracting foreign tech investors, including Warburg Pincus LLC, Goodwater Capital LLC and Alibaba Group Holding Ltd.

Between 2016 and the first half of 2020, investors funneled $1.9 billion into Vietnam’s online sector, according to a study by Alphabet Inc.’s Google, Temasek Holdings Pte and Bain & Co. The country’s digital economy is forecast to grow to $52 billion by 2025 from 2020, expanding nearly 30 percent per year, according to the same study.

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