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The digital economy of Vietnam is poised to become the 2nd largest economy in the region just behind Indonesia and to have the fastest-growing e-commerce market in Southeast Asia. The digital economy of the country is expected to reach USD 31 billion in gross merchandise volume (GMV) in 2021, resulting in an annual growth of 31%, thanks to the booming e-commerce market. The forecasts estimated the digital economy to reach USD 220 billion in GMV by 2030. This article highlights the key trends and features in the booming Vietnamese market.
Naturally, the global pandemic has been the catalyst to the development of the digital services in Vietnam, as millions of new users have joined the digital economy. Furthermore, it is estimated that half of the new users come from non-urban areas. Most of the users agree that the e-commerce market is here to stay even after the days of the pandemic.
If it was not for the digital platforms, many small businesses would find themselves struggling to even survive, let alone grow their business. A number of industry players have begun to accept digital payments. Financial services industry has also undergone rapid change in Vietnam, facilitating online lending and other services.
The growth in the digital economy of Vietnam has primarily been attributed to the e-commerce and food delivery amidst the global pandemic. On top of that, as more and more businesses have moved online, there was a new wave of so-called digital merchants. They recognized the impact online platforms had on their business and how the digitalization of the economy has provided them with many business opportunities and chances to create jobs for others. Furthermore, certain industries such as health tech and ed tech have seen a strong interest not only from consumers but also investors, proving to be opportunistic and lucrative opportunities for those interested.
Vietnam is one of the top destinations for foreign direct investment in Southeast Asia and is forecasted to become the region’s second largest economy in the region. This is driven largely by the digitalization of its economy and a participation of non-urban population in the e-commerce market and other digital services. By investing in critical areas such as digital payments and local talent development the Vietnamese economy will continue to set new economic growth records.
At PHC Advisory, we continuously monitor the recent updates of tax policy in Vietnam. Please, feel free to contact us at info@phcadvisory.com for more information.
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