Vietnam News

Economy Digital economy to be pillar of future society

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The digital and platform economies would become pillars of our future society, said Nguyễn Đức Thành, former director of the Institute for Economic and Policy Research (VEPR).

Thành was speaking during an online conference organised by UPGen Việt Nam in collaboration with VEPR this week.

This year has witnessed many fluctuations due to the COVID-19 pandemic and the risk of global crisis. However, some digital platforms such as Amazon, eBay and Alibaba have not only coped well with market instability but also developed fast and strongly.

Some studies suggest that digital platforms could be a rescue solution for many businesses and individuals in the war with the COVID-19 pandemic.

At the same time, the structure of the world economy will completely change after the pandemic.

The E-Conomy Southeast Asia 2019 Report jointly released on Thursday by Temasek, Google and Bain & Company showed that the digital economies of Việt Nam and Indonesia were leading growth in Southeast Asia.

The Vietnamese digital economy grew 38 per cent last year and was forecast to reach US$43 billion by 2025.

“The pandemic is a time for economic entities to recognise the role of the digital economy and the need for platforms. This should be a big turning point for Việt Nam, and we will regret it if we miss it,” said Thành.

Experts said that Vietnamese digital platforms had witnessed many successes and failures.

Some platforms have recorded fast and strong growth, such as Momo, an e-wallet service that reached more than 10 million users in 2018.

The e-wallet has also been named in the global top 100 financial technology companies.

Another successful platform is Zalo, which is a free messaging app similar to Whatssap. It witnessed revenue growth of 20 per cent last year, with pre-tax profit rising 1.5 times.

However, many names have appeared but then quickly disappeared in the market such as Lotus and Gapo, two social networks that were expected to replace Facebook in Việt Nam.

At the seminar, experts agreed that new digital platforms still had chances to succeed if they could find a way of being different.

For example, Instagram, a social networking platform similar to Facebook, personalises itself by sharing information primarily with images or Tiktok, which attracts interaction through unique videos.

Platforms that wanted to reach out to the world should first ensure their survival in their domestic markets, said experts.

To compete with existing platforms with a large number of users, there was no other way but to increase differentiation and localisation, experts highlighted.

Vietnam News – April 25, 2020

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