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,Vietnam is racing to increase its digital economy, with services like Tiki's express service which is winning over reluctant Vietnamese, many of whom are trying online shopping for the first time during the pandemic. —Bloomberg

Vietnam, which has one of the smallest e-commerce markets in Southeast Asia, is in a hurry to catch up.

Hanoi wants the digital economy to represent 20% of Vietnam’s gross domestic product by 2025, the government website reported, citing a draft decision by the prime minister. The National Party Congress, which meets every five years, has set a target for the digital sector to make up 30% of GDP by 2030.

It’s an ambitious reach: Vietnam’s digital economy currently accounts for just 8.2% of GDP, the news website VietnamNet reported in July, citing a Ministry of Information and Communications official. Euromonitor International estimates e-commerce represented a mere 3% of Vietnam’s retail market last year, the smallest slice among Southeast Asia’s major economies.

Officials want 80% of the population to have online payment accounts by 2025, according to the government’s post. That’s also when they want half of e-commerce transactions – many of which are still conducted in cash – to go cashless.

The government isn’t alone in wanting change. Vietnam’s young and tech savvy population – more than half of the 98 million citizens own smartphones – is attracting foreign tech investors, including Warburg Pincus LLC, Goodwater Capital LLC and Alibaba Group Holding Ltd.

Between 2016 and the first half of 2020, investors funnelled US$1.9bil (RM8.05bil) into Vietnam’s online sector, according to a study by Alphabet Inc.’s Google, Temasek Holdings Pte and Bain & Co. showed.

The country’s digital economy is forecast to grow to US$52bil (RM220.35bil) by 2025 from 2020, expanding nearly 30% per year, according to the same study. – Bloomberg



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