Vietnam’s internet economy is expected to reach a total value of US$14 billion in 2020, having grown 16% year-on-year, and will likely reach US$52 billion in value, re-accelerating to nearly a 29% compound annual growth rate (CAGR), according to the “e-Conomy SEA 2020” report by Google, Temasek, Bain & Company.

Source: e-Conomy SEA 2020 report. Screenshot: NM

According to the report titled “At full velocity: Resilient and racing ahead”, with its various stages of lockdown, Vietnamese users turned to the Internet for solutions to their sudden challenges. A significant number of users have tried new digital services. Specifically, 41% of all digital service consumers were new (higher than the SEA average), with 94% of these new consumers intending to continue their behavior post-pandemic.

Vietnamese users were spending 3.1 hours online (for personal use) pre-Covid-19, which spiked to 4.2 hours at the height of national social distancing, and now rests at 3.5 hours per day. With 8 out of 10 users viewing technology as very helpful during the pandemic, it has become an indispensable part of people’s daily lives, according to the report.

The report noted all sectors except travel continue to grow in 2020, of which transport & food, online media are estimated to grow 50% and 18% compared to 2019. Only online travel dropped 28% in term of gross mechanism value (GMV), but is expected to grow 25% by 2025. 

Source: e-Conomy SEA 2020 report. Screenshot: NM

HealthTech and EdTech in Vietnam have played a critical role during the pandemic, with impressive adoption rates. The report underlined that these sectors remain nascent and challenges need to be addressed before they can be commercialized at a larger scale. Nonetheless, the boost in adoption, compounded with fast growing funding, is likely to propel innovation in this space over the coming years.

Source: e-Conomy SEA 2020 report. Screenshot: NM

This year’s seismic consumer and ecosystem shifts have advanced the Internet sector in unimaginable ways, putting it in a stronger position than ever. Its 2019 report identified six key barriers to growth - Internet Access, Funding, Consumer Trust, Payments, Logistics and Talent - and this year has seen significant progress on most (Payments and Consumer Trust, especially). Talent, however, remains a key blocker that all parties will need to keep working on to ensure the momentum gained this year is sustained.