The Digital Landscape in Vietnam

Mar 2021

  • Vietnam’s Internet economy is booming, reaching a value of USD 12 billion in 2019 on a 38% annualized growth rate since 2015. With its internet economy accounting for over 5% of the country’s GDP in 2019, Vietnam is emerging as the most digitalized economy in the region.
  • As of January 2020, Vietnam had 68 million internet users with an internet penetration rate of 70%, 65 million social media users, and 145 million mobile connections, equal to 150% of the total population.
  • Vietnam aims to achieve a smartphone penetration rate of 100% to facilitate the deployment of e-government initiatives. Vietnamese companies have started producing their own version of smartphones, mostly cheaper Android models. Local conglomerate Vingroup is now selling a smartphone called Vsmart for about USD 100, registering high volumes of sales despite the complicated situation of the COVID-19 epidemic.
  • Vietnam is third most-funded internet economy in the region after Indonesia and Singapore. From 2015 to 2019, Vietnam’s Internet economy attracted close to USD 1 billion in funding. It is expected that by 2025, the country’s internet economy will be valued at USD 43 billion.
  • E-commerce is a key driver behind the impressive growth of the sector. Major players in Vietnam’s e-commerce market are Lazada, Shopee, Tiki, Thegioididong, and Sendo. While Lazada and Shopee are international corporations operating in multiple markets, Sendo, Tiki, and Thegioididong are only available for consumers within Vietnam. Of these, Tiki is the fastest-growing retail company in the country. It has successfully transformed its business model from a B2C platform to a Business-to-Business-to-Consumer (B2B2C) platform.
  • Vietnam aims to establish a network of smart cities centered around Hanoi, Ho Chi Minh City, Da Nang and Can Tho City. The first pilot phase is planned to be completed by 2025, focusing on developing reference frameworks and national standards, with priority given to urban management, lighting, traffic, water supply and drainage, waste collection and disposal, power grid, and ICT infrastructure.
  • Vietnam is implementing various programs to foster the start-up and innovation ecosystem. Key actors in this context include the National Agency for Technology, Entrepreneurship and Commercialization Development, the National Technology Innovation Fund, the Hoalac Hitech Service Center and the Saigon Silicon City Center. Importantly, in 2019 Vietnam launched the National Innovation Center, promoting the development of start-ups across four areas: content technologies, network security, smart city technologies and smart manufacturing technologies.
  • Vietnam is one of the first countries in the world to trial 5G networks, with a commercial launch expected by the end of 2020. The introduction of 5G brings new opportunities for the digital economy. The Vietnamese government has granted the first license to test 5G networks to Viettel, the country’s largest mobile carrier, which has over 60 million subscribers.
  • The COVID-19 pandemic is pushing digital transformation in Vietnam. Banks slashed online transaction fees to encourage cashless payment, while online shopping and food delivery services jumped in demand. Retailers reported that orders by phone and apps increased tenfold compared to normal days, while digital education surged amid school closures.

If you need customized market intelligence, or are looking for distributors or customers in Vietnam, please contact us for an initial consultation on how we can assist you.

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Orissa International helps companies that want to develop a market entry strategy for Southeast Asia or implement their business expansion into the region. We have very strong domain knowledge of markets and industry sectors, and a business network of over 16,000 companies that includes distributors, resellers, system integrators and local manufacturers, that we have built through advising and guiding more than 5,000 companies with their market expansion into the ASEAN region over the last 25 years.

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