Vietnam’s presence in the global economy is highly dependent on the way it responds to the age of digitization. The government of Vietnam has recognized this need and has been making active efforts to improve its digital environment.
Internet penetration rate– of Vietnam is at 69% which is better than most of its regional peers who much more developed. The internet penetration rate (2019) of selected ASEAN nations is given the graph below.
Furthermore, it is vital to note that the government has been increasing this percentage rapidly by 53% over the last five years. As Vietnam has a fairly new economy, with its initial launch of internet in the early 2000s, the nation has taken a significant amount of time to get to its current penetration level. As other aspects of a developing nation have stabilized, Vietnam finally has the chance to increase its internet penetration.
Given that the use of the internet is relatively new in Vietnam, the challenges faced by the nation due to fast paced penetration lies in its usage. The government, therefore, has placed vital importance on the establishment of cyber laws and has restricted content in order to avoid social instability in the nation.
Internet Economy Size – Vietnam’s internet economy reached US$14 billion in 2020, marking an increase of 300% in just four years, and a 5% contribution to the nation’s GDP. Furthermore, in view of its high growth potential, the internet economy has also received a US$1 billion in foreign investments, making it a highly sought-after segment of the Vietnamese economy.
The internet economy in Vietnam has grown rapidly at a CAGR of 16% from 2019 to 2020 from US$ 12 billion to US$ 14.9 billion and is further projected to grow to US$ 52 billion by 2025.
The growth of the internet economy is mainly attributed to e-commerce, online travel, online media and ride hailing and their contributions to the economy is given in the graph below.
Total Funding: US$ 13 million
Latest valuation: US$ 45 million
Business Outline: Develop the largest online portal for tourism with airline and hotel booking services through collaboration with Vietnam Airlines and over 4,000 hotel affiliations across Vietnam
Total Funding: Undisclosed
Latest valuation: US$ 50 million (projected US$ 150 million after funding)
Business Outline: Provide convenient transportation solutions through ride-hailing and car rentals. It is the only Vietnamese ride-hailing company to launch global plans of expansions such as Indonesia, Singapore, USA and Brazil.
Total Funding: US$ 500K
Latest valuation: US$ 2.7 billion
Business Outline: Manage digital content, entertainment, social networking and e-commerce, VNG aims to dominate online games, platforms, digital payments and cloud services in Vietnam.
Business Outline: E-commerce retail and online platform that offers clothing, homeware, cosmetics, tech accessories and others across 64 cities in Vietnam. There are plans of a merger with its rival Tiki to form a stronger company.
SUBSCRIBE TO OUR NEWSLETTER
Get monthly updates and latest news from the ASEAN region