ASEAN aims to make significant strides towards becoming a digital economy and society by 2025, with technology at its core. In which, Vietnam's digital economy is expected to reach 52 billion USD.

Leading in digital integration

Southeast Asia has about 400 million Internet users, and 10% of them joined e-commerce for the first time in 2020, when the Covid-19 pandemic began.

At the recent Asian Technology Conference held with the participation of ASEAN Ministers and experts in the digital economy, Singapore's Minister of Information and Communications Josephine Teo affirmed: the 10 member ASEAN economies  are fairly technology-neutral. Individuals and businesses have the freedom to decide which technology is most appropriate, best suited, to meet their needs without being forced to use a particular type of technology.

Cashless transactions are increasingly popular

It is forecasted that as economies recover from the pandemic, reliance on digital technologies will continue to grow, which will make international cooperation more valuable. As part of its digital master plan, ASEAN aims to make significant strides towards becoming both a digital economy and society by 2025, with technology at its core. A key component is the rise of the internet economy, where people use digital services to buy, sell, socialize, and even manage their daily lives.

According to Mr. Abdul Mutalib Yusof - Minister of Transport and Information - Communications of Brunei, there are three things to consider when thinking broadly about ASEAN's digital transformation. They are: Opportunity, technology neutrality, and the role of policymakers and regulators.

The ASEAN Digital Blueprint already has a framework and model contract clauses to help companies operating in the region better manage data transfers from one country to another. This is one of the ways that ASEAN is trying to facilitate cross-border data flows, which in turn will help develop digital trade. Singapore on July 13 announced a digital exchange that allows multiple stakeholders - such as logistics companies, shippers and buyers - to share valuable information such as the location of goods over real time.

In addition, ASEAN has also implemented closer integration in cybersecurity cooperation, including establishing a mechanism to exchange information about suspicious activities and potential cyber threats with each other.

The bright future of Vietnam's digital economy

The internet economy in Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Thailand is predicted to surpass $300 billion by 2025. Of which, Vietnam's digital economy is expected to reach $52 billion.

This rapid growth is underpinned by a broader digital transformation in Vietnam. Vietnam's National Digital Transformation Program aims to ensure more than 80% of households have access to fiber optic infrastructure by 2025.

A study shows that Vietnam's e-commerce market is likely to reach $15 billion by 2025. This growth is driven by increasing internet access, a relatively young and growing population. businesses choose e-commerce as a distribution channel. The highest proportion of online consumption is food and beverage, cosmetics, sporting goods, fashion and stationery.

Foreign-owned platforms in the region are dominating the Vietnamese e-commerce market. For example, Lazada and Shopee are owned by Alibaba (China) and SEA Ltd. (Singapore). However, domestic companies like Tiki have signaled growth plans during the pandemic.

Cash payment is still the method of choice in Vietnam. In 2019, only 41% of adults had a bank account, with the majority in cities. However, there are indicators that demand for digital financial services will increase. The combined impact of increasing internet access and a booming e-commerce market could create opportunities in the areas of digital banking, payments, savings and other financial services.

In 2020, Timo Plus, Vietnam's first "digital bank", announced that it will invest in digital financial services through credit and savings products to attract depositors who want to invest in digital financial services move away from traditional banking services. Payment demand is also increasing in line with Covid-19 with a 76% increase in digital payments in 2020.

Vietnam's internet economy could see 29% growth over the next 5 years. The central pillar underpinning this trend is a digital ecosystem of companies and consumers. Therefore, companies providing information technology services to businesses will be the "key" to successful digital transformation in Vietnam, and digital transformation will create opportunities in technology support services. information and industry 4.0. For example, the cloud services market in Vietnam is expected to grow to $291 million by 2024, a 5-year CAGR of over 10%. Much of this growth is concentrated in the North, and foreign companies such as Microsoft, Amazon Web Services, IBM and SAP Asia are key players in the cloud services business.

Policymakers' emphasis on improving Vietnam's Industry 4.0 ranking in the Global Innovation Index through increased productivity in manufacturing processes has spurred policy reforms in Lately year. The National Strategy for Industry 4.0 was issued in 2019, focusing on research and development investment, connectivity infrastructure and digital governance. As a result, growth in the Vietnamese market for technologies such as big data, cloud services, and the Internet of Things depends on expanding the skilled workforce and providing high quality infrastructure connectivity. In addition, Vietnam's push for Industry 4.0 has prompted foreign enterprises such as Samsung, Panasonic, Bosch, GE and Piaggio, to locate research and development activities here.