Vietnam's digital economy continues to record double-digit growth: Report

Vietnam's digital economy is maintaining double-digit growth, driven mainly by e-commerce and online travel, according to a report released recently by Google, Temasek, and Bain & Company.

The 9th edition of the e-Conomy SEA report "Profits on the Rise, Harnessing SEA’s Advantage" said that Vietnam’s gross merchandise value (GMV) is projected to grow at a compound annual growth rate (CAGR) of 16%, reaching 36 billion USD in 2024, with e-commerce and online travel as the primary growth drivers.

Online travel alone is expected to grow 16% year-on-year, reaching 5 billion USD in 2024, significantly contributing to the overall GMV.

Vietnam also leads Southeast Asia in online media growth, with its GMV forecasted to reach 6 billion USD in 2024 (a 14% CAGR), and anticipated to reach 11 billion USD by 2030.

The ride-hailing market in Vietnam is increasingly competitive, particularly with the emergence of local companies and electric vehicle (EV) options. GMV in transport and food delivery is expected to reach 4 billion USD in 2024, a 12% increase over the previous year.

Marc Woo, Google Asia-Pacific’s Managing Director for Vietnam, said that over the past five years, they have seen strong and steady growth in Vietnam’s digital economy, and 2024 continues to affirm that potential.

Vietnamese users have also shown keen interest in AI this year, and it is encouraging to see the Vietnamese government prioritising this sector, he said.

The report also highlights strong interest and demand for AI in Vietnam’s urban centres, particularly Ho Chi Minh City and Da Nang, which lead the country in AI-related interest. The education, marketing, and healthcare sectors drive the highest volume of AI searches in Vietnam.

The report updates digital economic trends of six Southeast Asian countries, including Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam in six fields of e-commerce, food delivery services, transport, online travel, online media and financial services.

For the first time, it examines the health of the digital economy through the lens of profit. Key players made significant strides towards profitability, with tighter commissions, targeted incentives, and new revenue streams driving a 2.5 times increase in profits over the last two years. Since 2022, profitability has grown 2.5 times from 4 billion USD in 2022 to 11 billion USD in 2024, setting the stage for long-term success.

Overall, the report projects that in 2024, the region's digital economy will reach 263 billion USD in GMV, a 15% increase over last year. Revenues have grown 14% and are projected to reach 89 USD billion in 2024. This suggests that the digital economy can achieve both profitability and growth in tandem, marking a significant step towards achieving sustainable economic value.