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  • Writer's pictureWiziin Inc.

The Potential of Digital Transformation in Southeast Asia

Updated: Oct 19, 2023

The digital economy of Southeast Asia is expected to reach $1 trillion by the end of the decade. In addition to having the world’s second fastest growing region in terms of internet users, the region has seen the rise of its own multi-service tech unicorns that provide a wide range of services ranging from food delivery to ride-hailing to online learning to digital banking.

Four factors have contributed to the rapid growth of the digital economy in Southeast Asia. ✔️ For starters, a large youth population of digital natives has significantly contributed to the sector’s growth. ✔️ Second, the rapid adoption of mobile financial services is enabling millions of people to make digital payments. ✔️ Third, because the region has such high mobile penetration, customers frequently use e-commerce and social media sites to purchase goods and services. ✔️ Finally, most governments in Southeast Asia have implemented policies to support the digital economy and infrastructure.

According to McKinsey & Company, the proportion of digital payments in Asia will reach 65% in 2024 (compared to a global average of 52%), making the continent the world’s consumption growth engine. There is no doubt that digital growth in Southeast Asia is accelerating. However, several areas must be improved in order for the region to reach its full potential: digital infrastructure, new consumer development, information security, and effective digital policy.

According to World Bank data, Vietnam’s digital sector is growing at a rate of 10% per year and could reach more than $200 billion by 2045, a massive figure compared to the country’s GDP, which was nearly $352 billion last year. For Vietnam to achieve its goals of becoming a high-income country and a “net-zero” emissions economy, digital transformation will be critical.

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