Digital transformation – an Opportunity for Vietnam to Shine on the World Economy Map

With the growth of science and technology, digital transformation is gradually becoming a vital role in all industries and fields, as well as a key strategy for enterprises to boost their competitiveness and market position. The digital transformation process in Vietnam is showing many promising signs. This is a great opportunity for our country to close the gap with other countries across the world.

Where is Vietnam on the global digital transformation map?

Recognizing the significance of digital transformation in improving operational efficiency and ensuring long-term development, several companies and businesses throughout the world have jumped into the "race" of digital transformation. According to Gartner Inc., global digital transformation investment will reach $2.39 trillion in 2024, up from less than $1 trillion in 2017, representing a compound growth rate of 13.9% per year. 

The wave of global digital transformation is booming.

According to McKensey's analysis, the impact of digital transformation on GDP in the United States will be roughly 25% by 2025, 35% in Brazil, and 36% in European countries. Furthermore, according to Microsoft research in 2017, the impact of digital transformation on GDP in the Asia-Pacific region is about 6% in 2017, 25% in 2019, and 60% in 2021. As can be seen, the influence of digital transformation on GDP growth is considerable.

According to Microsoft's survey on digital transformation in the Asia-Pacific region, before and after the outbreak of the COVID-19 pandemic, up to 74% of business leaders believe innovation is crucial to the enterprise's resilience. 98% of enterprises pioneering in the innovation process believe that innovation is the key to overcoming challenges and making breakthroughs. Companies that successfully execute digital transformation are 23% more profitable than traditional businesses.

According to the Southeast Asia Digital Economy Report, Vietnam's digital economy will reach 21 billion USD in 2021, accounting for nearly 6% of the country's GDP and ranking third among ASEAN's six main markets and 14th out of 50 Asian countries. E-payments have increased by 3000% in value compared to 2016. Vietnam ranked third in ASEAN for attracting start-up financing, leading in a group of 34 low- and middle-income countries and ranking 44th out of 132 countries on the global innovation index. 

The wave of digital transformation breaks out strongly in Vietnam.

Vietnam is one of the world's trailblazers in implementing national digital transformation programs and strategies. Furthermore, since October 2021, small and medium-sized companies are particularly interested in getting digital transformation financial support from the state. This has raised awareness of digital transformation in Vietnam and created opportunities for numerous enterprises to thrive.

The Vietnamese government places great emphasis on digital transformation.

Due to COVID-19, the period 2020 - 2021 is challenging but also promising for Vietnamese businesses to enter the digital transformation race. Since the pandemic, most countries including Vietnam have become more dependent on digital platforms, especially during lockdown and social distance. This situation has led to a sharp increase in e-commerce and digital marketing, up 35.4% & 23.2% respectively over the same period last year. 

Integrating into global development, the majority of enterprises in Vietnam are actively digitalizing their business and distribution management. Various software are used to improve omnichannel commerce and management systems at retail chains. Statistics in 2021 show that:

• Around 100,000 stores are using KiotViet software for sales activities and channel management. The same number is recorded for Sapo, Harvan, etc.;
• Hundreds of thousands of enterprises are making money on e-commerce platforms such as Tiki, Lazada, Shopee, etc.;
• 20% of advertising budget are allocated to digital marketing channels including Facebook, Google, Tiktok, etc.;
• 60% of businesses are utilizing accounting software, of which 200,000 are using Misa software;
• Over 200,000 businesses are using electronic invoice software;
• Digital signatures are employed by most businesses.

KiotViet is the most popular sales management software in Vietnam today.

Although digital transformation is taking place actively across our country, it cannot be denied that businesses still face many challenges during this process such as financial difficulties, corporate culture changes, implementation capacity, digital transformation solutions, etc. Another knotty problem for most businesses is the shortage of specialized human resources and infrastructure for the digital transformation program. In addition, there are quite a few professional individuals and organizations to support enterprises in applying modern technology to their business models. 

FUNDGO Startup and Innovation Fund is one of the pioneers in promoting the national digital transformation. The Fund has actively coordinated with numerous associations, agencies, and organizations to increase digital transformation coverage in the Mekong Delta in particular and the country in general. The Fund is also strengthening connections with e-commerce organizations, and domestic and foreign financial associations to update new trends and solutions, disseminate knowledge, and train workforce to serve the field. 

FUNDGO sponsors forums on e-commerce and digital economy.

Despite several difficulties to be solved, the digital transformation in Vietnam is still being positively implemented by organizations and businesses. It is also receiving enormous attention and support from ministries, departments and agencies.With these favorable conditions, Vietnam genuinely has the opportunity to rise and change its ranking on the global digital economy map as well as improve the national competitiveness.