At the release of the 8th Southeast Asia Digital Economy report in HCM City last week. — Photo courtesy of Google

HCM CITY — Việt Nam remains the fastest growing digital economy in Southeast Asia for a second year in a row and is expected to hold this position until 2025, according to the 8th Southeast Asia Digital Economy report released by Google, Temasek and Bain & Company last week.

The report covering Indonesia, Malaysia, Philippines, Singapore, Thailand, and Việt Nam says despite global economic headwinds, the region’s gross merchandise value (GMV) remains on an upward trajectory, growing at 11 per cent a year, and is set to reach US$218 billion.

It says the region’s revenues from the digital economy are poised to hit $100 billion this year.

Việt Nam’s GMV is expected to grow from $30 billion this year to around $45 billion in 2025 driven by e-commerce and online travel.

The former will grow by 11 per cent this year, and at a CAGR of 22 per cent between 2023 and 2025, reaching around $24 billion. 

Full recovery in the travel sector is expected this year, driven primarily by sharp growth in domestic travel. Online travel will grow at 21 per cent to $7 billion.

According to the report, the irreversible offline-to-online behaviour shift continues to drive growth in digital financial services adoption, including digital payments.

While in Southeast Asia digital payments adoption has reached 50 per cent, Việt Nam is also embracing digital payments and is the fastest growing country, growing by 19 per cent in 2022 and 2023 and at 13 per cent CAGR in 2023-25.

Strong support from the government, investments by banks and the widespread usage and popularity of QR codes will continue to drive digital payments adoption in Việt Nam, and digital payments will accelerate as the central bank promotes cashless payment in rural and remote areas. 

Andrea Campagnoli, office head and founding partner of Bain & Company Vietnam, said: “It is remarkable that Southeast Asia’s digital economy GMV and revenues continued their double-digit growth momentum, with revenues expected to break the $100 billion mark in 2023.”

The report also points out that high-value users (HVUs) continue to drive sustainable unit economics but significant growth prospects lie in increasing digital participation.

Marc Woo, managing director, Vietnam, Google Asia Pacific, said while over 70 per cent of digital economy transaction values were made by the top 30 per cent of SEA spenders, non-HVUs also represented a significant opportunity.

In Việt Nam, HVUs spent 5.4 times versus non-HVUs.

While HVUs were more likely to increase spending over time, non-HVUs also presented a growth opportunity.

As consumer demand kept growing, a majority of non-HVUs had an appetite to increase their online spending if more trust could be built and barriers such as the need to touch and feel products could be addressed, he said.

Campagnoli said while digital inclusion had made inroads in SEA in recent years, consumers outside of metro areas were at risk of facing a widening digital economic divide.

Hà Nội, HCM City and Đà Nẵng were the top three metros leading digital participation in Việt Nam but the gap was wide beyond them, he added. — VNS