Vietnam internet economy grows to $14 billion

The 2020 report on Southeast Asia’s Internet economy, released Tuesday by Google, Temasek and Bain & Company, surveyed six Southeast Asian countries: Vietnam, Thailand, the Philippines, Malaysia, Singapore and Indonesia.

Among these, Vietnam’s digital economy grew the most, followed by Indonesia with an 11 percent growth to $44 billion.

The report projected Vietnam to grow its digital economy from 2020 to 2025 by 29 percent, second only to the Philippines at 30 percent. It also estimated that by 2025, Vietnam’s internet economy would be worth about $52 billion.

Of all digital service consumers in Vietnam, 41 percent of them are new, the highest percentage among the six surveyed countries, followed by the Philippines at 37 percent. Most of the new digital consumers in Vietnam (74 percent) are from metro areas, the report says.

In 2019-2020, Vietnam’s e-commerce, online media, transport and food sectors have grown, while the online travel services sector fell. The e-commerce sector grew 46 percent to $7 billion, transport and food by 50 percent to $1.6 billion and online media by 18 percent to $3.3 billion. The online travel sector value fell 28 percent to $3 billion, owing to travel restrictions imposed under the Covid-19 pandemic.

"Certain segments and markets have started on their journey to recovery, albeit at different speeds. Vietnam, where the pandemic has been relatively under control, has bounced back faster than the Philippines, where cases continue to rise," the report said.

Vietnam has so far recorded a total of 1,252 Covid-19 cases with 35 deaths. The country has had no community transmission in over two months. The Philippines, meanwhile, has recorded over 401,000 cases and more than 7,700 deaths, with more than 1,600 new cases in just the last 24 hours.

Earlier this month, a report by GSMA Intelligence, a mobile industry research division under the Global System for Mobile Communications Associations (GSMA), showed Vietnam was leading in digital development from 2016 to 2019 among several Asia-Pacific countries.

Specifically, its digital society index, calculated using five criteria: connectivity, digital citizenship, digital lifestyle, digital commerce and digital identity, went from 37 in 2016 to 49 in 2020, showing the highest increase compared to other countries surveyed - Australia, Japan, Indonesia and Thailand.

Vietnam’s achievement was mainly driven by notable improvements in the connectivity component of the index, following the launch and rapid expansion of 4G networks in the last three years. It was also further boosted by improvements to digital identity, digital citizenship and digital lifestyle components, according to the GSMA Intelligence report.