A new report co-written by Google, Singapore government-backed Temasek Holdings, and US-based management consultancy Bain & Company looks at Southeast Asia’s six biggest markets, including Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Titled “e-Conomy SEA report 2019: Powering Southeast Asia's $100 billion Internet economy,” the report finds that Vietnam’s internet economy is worth US$12 billion in 2019, a figure predicted to reach US$43 billion by 2025.

Vietnam’s internet economy has seen an annualized growth rate of 39% since 2015, making it the second fastest-growing in the region behind Indonesia, with an annual average growth rate of 49%.

“Vietnam is emerging as the most digital of all economies in the region. e-Commerce is a key driver behind the impressive numbers, where homegrown marketplaces like Sendo and Tiki compete with regional players like Lazada and Shopee,” the report says.

This trend, the report notes, boosts investor funding confidence in the market. E-commerce is currently leading the internet economy in Vietnam, followed by online travel, online media and ride-hailing.

While the numbers might suggest positive growth for Vietnam, the study points out that the digital economy development in the country is extremely uneven, with most participants in the internet economy hailing from metropolitan areas such as Hanoi and Saigon.

This insight is particularly true for under-developed but fast-growing countries like Indonesia, Vietnam and the Philippines. Differences in expenditure between metro and non-metro areas contribute to this disproportion, said the report. For example, the annual gross merchandise volume per capita (total sales from e-commerce per individual) in Hanoi and Ho Chi Minh City is US$364, while in non-metros areas in Vietnam, it’s US$79.

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