Digital transformation drives corporate growth

Vietnam’s digital economy is forecast to grow by 31 percent to 21 billion USD this year thanks to a 53 percent expansion in e-commerce, according to a report by Google, Temasek and Bain & Company.

Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan speaks at the event (Photo: VNA)

Vietnam’s digital economy is forecast to grow by 31 percent to 21 billion USD this year thanks to a 53 percent expansion in e-commerce, according to a report by Google, Temasek and Bain & Company.

Amid the COVID-19 pandemic, digital transformation will enable enterprises to popularise their trademarks and improve stature, heard a seminar held by the Ministry of Industry and Trade in Hanoi on November 17.

Identifying obstacles

A study on consumers’ payment attitudes in Southeast Asia in 2021 showed that 44 percent of people shopped online for the first time in 2021 and 84 percent accepted cashless payment.

However, a representative from Sendo company said that Vietnamese products only accounted for 17 percent of the top items bought on its site while foreign products made up 83 percent.

One of the main reasons is the lack of professional investment in e-commerce, operational data on digital platforms, and the problem of operating costs.

Chairman of the Board of Directors of Sendo JSC Nguyen Dac Viet Dung said authorities and enterprises need to create a positive wave for e-commerce and cashless payment, especially among the small- and medium-sized enterprises (SMEs).

A representative from Teko company said although the digital transformation is an effective solution amid the pandemic, no firm can embark on it effectively due to the lack of specific plans, limited technological capacity or problems of their outdated platforms.

Citing a report on Vietnam’s e-commerce by Niesel, a representative from iCheck JSC said consumers remain dissatisfied with online shopping, especially because of fake and substandard goods being sold on several sites.

He suggested that firms improve consumers’ trust by making information about goods transparent.

Power of digital transformation

A report by Google, Temasek and Bain & Company showed that Vietnam’s digital economy will reach 57 billion USD by 2025 and 220 billion USD by 2030, ranking second in the region behind Indonesia.

From the onset of the pandemic to the first half of this year, Vietnam recorded an additional 8 million new digital consumers, 55 percent of them not from major cities.

Also according to the report, Vietnam remained an attractive innovation centre with a record 1.37 billion USD in inward investment in the first half of this year. This was fuelled by interest in start-ups in the fields of e-commerce, fintech, healthtech and edtech.

Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said amid the global economic integration, digital transformation is vital to business development. It especially helps SMEs seek more flexible models to save costs and optimize resources to overcome difficulties.

He said the National Assembly and Government are considering the building of new legal documents regarding e-transactions and information technology.

The Prime Minister also issued Decision No.645/QD-TTg on a master plan for national e-commerce development for the 2021-2025 period and the national project on supporting national innovation initiative until 2025 (Project 844).

Deputy Minister of Science and Technology Tran Van Tung also stressed that start-ups in e-commerce have become a topic drawing attention from young enterprises.

He affirmed that the business trend is becoming global, particularly in Asia-Pacific.

Under Project 844, the ministry offered orientations for assisting start-ups in market development and bringing products to Vietnam’s start-up ecological system.

Vietnam is also expected to be the fastest-growing e-commerce market in Southeast Asia by 2026, with e-commerce Gross Merchandise Value (GMV) reaching 56 billion USD by 2026. This is 4.5 times the estimated value of 2021, according to a report by Facebook and Bain & Company.  

In the annual SYNC Southeast Asia report, which looks at the digital economy in the region, the two big market observers said that Vietnam is at the forefront of driving change and seizing opportunities to thrive based on digital transformation in a post-pandemic future.
The study surveyed about 16,700 digital consumers and more than 20 C-level employees in six Southeast Asian countries, including 3,579 participants from Vietnam./.