Vietnam’s internet economy is the largest relative to GDP in terms of gross merchandise volume in Southeast Asia this year. A study by Google and Temasek, a Singaporean holding company owned by the Government of Singapore, said gross merchandise volume (GMV) traded over the Internet in Vietnam was 4 percent of GDP. The study encompasses ride-hailing, e-commerce, online travel and online media.
In second place was Singapore with 3.2 percent, according to the study which covered Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Indonesia’s digital economy had the fastest absolute growth and looks set to reach $100 billion in 2025.
In the last few years online businesses have been booming in Vietnam, with last year the digital economy growing by more than 25 percent, a rate that can be sustained for the next two or three years, according to the Vietnam E-Commerce Association.
It said online sales are set to hit $10 billion by 2020, accounting for 5 percent of total retail sales.
A Financial Times report last April cited Bain, a U.S.-based global management consulting firm, as estimating that Southeast Asia had 200 million digital consumers, or people who bought goods or services online, out of an adult population of 405 million. Vietnam, with a population of 93.7 million, accounted for 35 million.
Vietnam’s youthful population is among the keenest users of mobile devices in the region, while the country’s consumers spend more time online than most of their neighbors, several studies have found.
Research firm Nikkei estimated Vietnamese spend nearly 25 hours online per week, on a par with or just behind Singapore and the Philippines.
In the ride-hailing sector, many players are expanding investments. Vietnam recently saw new entrants such as local firm FastGo, GoViet, a subsidiary of Indonesia’s Go-Jek, and Aber.
Current market leader Grab has expanded to offer GrabFood and GrabCar Business, the latter targeting the corporate sector.
But experts say Vietnam and many other countries in the world face a slew of challenges in the digital economy such as upgrading the skills of the workforce and adapting to rapidly changing technologies.