Digital transformation is considered to be among the key solutions to removing obstacles facing production and business and creating new development directions and is being applied by many localities and enterprises amid the COVID-19 pandemic.
According to a report from the Department of E-Commerce and Digital Economy at the Ministry of Industry and Trade, Vietnam’s e-commerce market grew 18% last year to US$11.8 billion, equal to 5.5% of the country’s total retail and service revenue. The report revealed that 53% of the population engages in online sales activities, while 33% of consumers use online payments when shopping online. Many enterprises view digital transformation as an indispensable means of improving operational efficiency and productivity as well as a foundation for their long-term development, according to an industry expert.
A Vietnam Report survey found that the majority of enterprises considered pioneers in digital transformation and who believe reform is key to overcoming challenges and seizing opportunities in the market are more successful in maintaining their operations and recovering faster than others. There has, however, been a lack of specific roadmaps and balance between technology and internal resources at enterprises regarding digital transformation.
Most small and medium-sized enterprises (SMEs) have had few opportunities to access digital technologies. They have not adopted a digital-based business mindset and do not have the capacity to understand their customers. Most SMEs do not possess operational data collection and storage measures or a digital-based business strategy.
Meanwhile, a survey by the Ministry of Industry and Trade and the UNDP on nearly 2,700 businesses operating in 18 different industrial sectors regarding their level of readiness to access achievements from industry 4.0 showed that 82% consider themselves to be new at the process, 61% expressed no interest, and 21% said they had begun the process.
The Vice Director of the Vietnam Institute of Digital Transformation and Innovation noted that digital transformation will only succeed if the operational procedures of enterprises are simplified to become smarter and their staff adopt modern working methods and have effective tools to interact with customers through multiple channels in a straightforward manner. He explained that only large-scale businesses have sufficient capacity in finance and human resources to build technology infrastructure and databases. SMEs should use shared technology infrastructure and databases developed by large digital partners and suppliers.
Authorised agencies and businesses have been urged to change their thinking and understand that digital transformation is not just a trend or an IT project but requires comprehensive reform of business models, the way businesses operate and design products, and how they interact with customers and partners in the ecosystem.
According to a study by Google, Vietnam’s digital economy is forecast to grow to US$52 billion by 2025, an annual 29% increase from 2020. With the gross merchandise value (GMV) of its Internet economy accounting for over 5% of the country’s GDP in 2019, Vietnam is emerging as the most digital of all economies in the region. The Vietnamese government hopes that online shopping would account for 10% of Vietnam’s retail sales, and as much as 50% in Hanoi and Ho Chi Minh City by 2025. To create a more transparent modern economy, authorities want to increase cashless payment for public services and improve the regulatory framework for e-payments.
