Vietnam’s economy going digital at rapid pace

09:20 | 13/03/2019 Economy- Society

(VEN) - Prime Minister Nguyen Xuan Phuc, speaking at the Vietnam Economic Forum (VEF) held by the Central Economic Commission on January 17 in Hanoi, said the digital economy would be a new driving force for Vietnam to achieve the goal of rapid and sustainable growth.

vietnams economy going digital at rapid pace

Phuc noted that some 70 percent of mobile subscribers were using the 3G and 4G networks and smartphone ownership averaged 1.7 per person. Access to e-commerce sites via smartphones accounted for 72 percent and online shopping conducted via smartphones made up 53 percent of the total - all indicating that Vietnam stands to benefit hugely from the digital age.

A report released by Google and Temasek showed that the Vietnamese internet economy grew at 35 percent a year during the 2015-2018 period, reaching US$9 billion in 2018. The gross merchandise value (GMV) of the internet economy was four percent of the country’s GDP.

Of the GMV, online travel, e-commerce, and online media accounted for 39 percent, 31 percent, and 24.4 percent, respectively, and food delivery and ride-hailing for the rest. E-commerce transactions almost doubled in 2018 from a year earlier, and online advertising and gaming grew at more than 50 percent year-on-year.

According to the “Our Shared Digital Future” report published by the World Economic Forum, 60 percent of global GDP will be digitized by 2022, and the gap between the digital and real economy, between the digital and real society will be eroded. Nguyen Van Binh, head of the Party Central Committee’s Economic Commission, said the digital economy and digital society will continue to dominate in the next decade and this is an opportunity for Vietnam to forge ahead because all countries have the same starting line.

Minister of Information and Communications Nguyen Manh Hung said increasing the use of digital technology would promote the digital economy. “Digitalizing the economy is a policy revolution rather than a technology revolution,” Hung said, adding that the government’s acceptance of new business models was critical.

Hung said to promote its digital economy, Vietnam must improve the information, communication and technology infrastructures. Focus should also be placed on preparing human resources for Industry 4.0.

Vietnam’s internet economy is booming and is forecast to reach a value of US$33 billion by 2025.

Nguyen Nga