At an online seminar titled “E-Commerce Development: Opportunities, Drivers, and Challenges” hosted by the Government Portal on August 14, 2024, e-commerce experts revealed insightful information about the industry.
Despite global economic challenges, Vietnam’s e-commerce sector has maintained impressive growth, outpacing the region. According to the Vietnam E-Commerce Association’s Vietnam E-Commerce Index Report 2024, the sector grew by over 25% in 2023, reaching a staggering $25 billion. Online retail sales accounted for $17.3 billion of this amount.
E-COMMERCE CONTRIBUTES 15%-17% TO THE COUNTRY’S DIGITAL ECONOMY
PGS.TS Tran Minh Tuan, Director of the Department of Digital and Social Economy at the Ministry of Information and Communications, shared insights into the National Strategy for Digital and Social Economic Development by 2025 and orientations toward 2030. The strategy aims for the digital economy to contribute approximately 20% to the country’s GDP by 2025.
Currently, the digital economy comprises two main sectors. The first is ICT-related, including industrial electronics, semiconductors, telecommunications, hardware, and software. The second sector involves the digitalization of various industries, including e-commerce.
The orientation by 2025 is for the sectoral digital economy to contribute a minimum of 50% to the national digital economy. This highlights the growing importance of the sectoral digital economy, with e-commerce being a key driver of its development, according to Mr. Tuan.
By the end of 2023, e-commerce contributed approximately 15%-17% to the country’s digital economy. Additionally, the strategy for e-government development aims to enable each farmer and business household to become an online store, enhancing their marketing and service promotion capabilities.
With over 14 million stores and 9,000 markets in Vietnam, the trend toward e-commerce is strong, especially post-COVID-19. By bringing wholesale and retail activities to digital platforms, e-commerce has become a significant trend, accounting for 19.6% of global retail revenue. In Vietnam, the goal is for e-commerce to account for 10% of total retail revenue by 2025, which is well within reach.
The potential for e-commerce in Vietnam is vast, and the Ministry of Information and Communications is working closely with the Ministry of Industry and Trade to promote digitalization among businesses, households, and retail stores.
Emphasizing the sector’s importance, Deputy Director of the Department of E-Commerce and Digital Economy, Mr. Lai Viet Anh, stated that e-commerce is a pioneer in the digital economy due to its long-term development. In 2023, Vietnam’s e-commerce sector grew by 25%, making it one of the fastest-growing countries in East Asia and among the top 10 globally.
With e-commerce already accounting for 8% of the country’s total retail goods sales and consumer service revenue, its potential for further growth is significant.
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Statistics show that over 80% of Internet users shop online, and e-commerce is widely adopted by consumers and has a strong appeal to small and medium-sized enterprises and individual business households. It offers a more equitable environment for businesses of all sizes in the digital arena.
The barriers to entry in the digital environment are lower than in traditional markets, especially for businesses aiming to expand nationwide or even globally through cross-border e-commerce.
“I believe that e-commerce can be a key area to help bridge the digital divide between major economic centers and remote areas,” said the Deputy Director of the Department of E-Commerce and Digital Economy.
Economist Dr. Vo Tri Thanh emphasized the pervasive presence of the digital economy and e-commerce in all aspects of modern life, from production and business to consumption.
While e-commerce has been discussed for a long time, Vietnam’s digital economy is relatively young, having developed significantly over the last decade.
According to Dr. Thanh, the digital economy currently consists of three main parts. The first is related to the production of ICT equipment and technology involving electronics, information, and communications. The second part involves traditional industries that integrate data and digital technology to enhance their value and performance. The third part is closely linked to innovation and new business models, such as startups.
Vietnam’s digital economy currently accounts for 13-14% of GDP, with a target of 20% by 2025 and 30% by 2030. This indicates that the digital economy’s contribution, in terms of added value, is growing faster than the average GDP growth rate.
Dr. Thanh highlighted the immense potential and opportunities presented by the digital economy. He emphasized that Vietnam’s focus on digital transformation and digital economic development is a golden opportunity for the country to catch up with the rest of the world.
He stressed the importance of e-commerce as a critical component of the digital economy, effectively bridging the “virtual” and “real” worlds. “Sometimes, we view the virtual and digital worlds as separate from the real world, but the essence of the digital economy is to drive GDP growth,” he added.
As evidence, he cited that Ho Chi Minh City alone has over 90,000 online businesses, or about 0.8% of the city’s population. There are likely hundreds of thousands of online businesses and e-commerce enterprises nationwide. This sector provides numerous job opportunities, although precise data is not yet available.
The contribution to state revenue from the digital economy is also significant, especially with improved supervision of e-commerce activities. In 2023, e-commerce revenue reached VND 3.5 quadrillion, and state revenue from this sector was about VND 100,000 billion, with potential for further growth.
To harness the advantages and drive e-commerce development, contributing to the digital economy and overall socio-economic progress, Dr. Thanh suggested addressing three key issues regarding the regulatory framework.
Firstly, there is a need for legal documents and a regulatory framework for data governance, as data is a new resource and production factor, underpinning all digital activities, regardless of technological advancements.
Secondly, attention should be given to electronic exchange platforms involving multiple stakeholders and addressing issues of responsibility and dispute resolution.
Lastly, it is crucial to adhere to international commitments, cooperation agreements, and standards regarding the movement of goods, information flow, and financial transactions.
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