Vietnam's recovery roadmap will be fueled by the rapid development of the digital economy.
Vietnam's e-commerce market is expected to reach US$35 billion by 2025. (Photo: FINANCIAL TIMES)
The advantage of the "golden" population
In a recent article on Eastspring.com, Vietnam is known for its "golden" population. Of which, nearly 56 percent of the population are under 35 years old, the highest rate compared to countries with similar income levels in the region.
With Generation X and Generation Y forming most of the country's workforce and consumer market and Generation Z rapidly emerging as the next wave of consumers, Vietnam will advance eight notches to 18th position in the global ranking of 30 largest consumer markets before 2030. It is estimated that the class with incomes over US$700 per month in Vietnam will account for one-third of the population and is expected to double in size by 2030.
According to the article, digitalization is becoming an indispensable part of consumers' daily lives in Vietnam. The country's digital economy is growing at double digits, and the total market value is expected to reach $57 billion by 2025.
E-commerce will be the largest growth driving force, fortifying Vietnam's fast-growing digital market. With increasing internet penetration, wider smartphone usage, and the diversity of online shopping platforms, the e-commerce market is expected to generate a growth rate of more than 25 percent per year and have a market value of $35 billion by 2025, equivalent to one-tenth of the total retail sales according to Vietnam's long-term vision.
According to a McKinsey study, by 2030, 40 percent of Vietnam's consumers will be driven by the generation born in the digital period - between 1980 and 2012. In the future, businesses will have to offer innovative digital services to increase customer satisfaction.
Optimistic signals from production and FDI
Vietnam's e-commerce, driven by digitalization and combined with rapidly-increasing capital, is on track to achieve high growth rates. Therefore, more and more foreign investors are looking for investment opportunities in Vietnam's e-commerce platforms. A recent report by credit rating agency Fitch Ratings expects growth to accelerate to 7.9 percent in 2022 and 6.5 percent in 2023 as the economy recovers.
Meanwhile, London-based market research company IHS Markit has just released a report saying that the Purchasing Managers' Index (PMI) of Vietnam's manufacturing sector reached 53.7 points, up from 52.5 points in the previous month.
Both production and new orders increased at a higher rate as customer demand continued to improve. Enterprises are also confident in the production outlook for 2022. About 60 percent of respondents expect an increase in production, reflecting the highest level of optimism in more than three years.
Besides e-commerce, Vietnam's export of Made-in-Vietnam goods also hit a record with a large volume and market share in the international market. Russia's Sputnik news agency said that Vietnam is receiving more attention with the expectation of becoming a new manufacturing center of the world.
With many newly-registered FDI projects and projects increasing capital by hundreds of millions of US dollars in the first days of 2022, it shows investors' confidence in the prospect of Vietnam's economic recovery.
Source : https://en.diendandoanhnghiep.vn/digitalization-trend-the-lever-of-vietnam039-s-growth-n33479.html
