Vietnamese enterprises are moving towards digital offerings to offset future losses, but long-term vision is still needed in order to develop in a sustainable manner.

Bui Anh Tuan, deputy head of Viettel Telecom’s IT Solution and Digital Service Centre, and his team are preparing to introduce new digital platforms to meet growing demand in the local smart home market.

“We are developing new products, platforms, and services for smart homes such as fire alarm services connecting to security units, security services, and maid services, which are expected to come to the market by end-2023, or early 2024,” he told VIR.

Smart homes are one of the businesses that Viettel has developed in the past two years in an effort to offset losses from its traditional business lines. One of its products being the Home Camera, an AI smart security camera solution, which is now found in 300,000 households. Meanwhile, its TV360 app boasts around 10 million users.

Tuan said that like other mobile network operators, Viettel faced drops in revenue from traditional businesses like mobile networks, fixed phones, and broadband in recent years.

“In other countries, revenue from new digital products constitutes about 10-15 per cent of total revenue of a mobile network operator. We expect a similar result for Viettel,” he said.

VNPT, Vinaphone, and MobiFone and others are also transforming. At the first national forum on digital economy and society development held by the Ministry of Information and Communications (MIC) and the Central Economic Commission in the northern province of Nam Dinh in mid-September, a range of top companies showcased their new products. They included digital payment apps; e-wallets; digital signatures; cybersecurity products; near-field communication; and blockchain offerings.

Tran Tuan Huy, head of digital transformation at MobiFone, said the company was accelerating its digital transformation in its operation from a traditional mobile network into a technology company, enabling it to become the first mobile network operator in Vietnam completing its digital transformation by 2025.

“To offset losses from traditional businesses, we are investing in new technologies and new businesses such as a 5G network for digital economy and social development. We are focusing on cybersecurity, the Internet of Things, big data, AI, games, mobile and smart education, and smart travel,” he said.

“We have also been investing in developing human resources from 60 programmers to the current 500 to focus on new digital businesses. We set up many digital tech trading centres in different regions across Vietnam to provide solutions and services to customers.”

The digital economy accounted for 11.91 per cent of Vietnam’s GDP in 2021 and then 14.26 per cent in 2022, according to the MIC. Vietnam has set a target of having its digital economy account for 25 per cent of national GDP by 2025 and 30 per cent by 2030.

In 2022, more than 1,400 Vietnamese digital tech enterprises made revenues from foreign markets, increasing by nearly 20 per cent compared to 2021.

The annual Southeast Asia e-Conomy report by Google and Temasek noted that the growth rate of Vietnam’s digital economy in 2022 was 28 per cent, leading Southeast Asian countries.

“This will bring new development space for enterprises like MobiFone, VNPT, and digital service providers in the future because not only companies but also state agencies and cities and provinces have growing demands for related services and platforms,” said Tran Minh Tuan, director of the Department of Digital Economy and Society under the MIC.

Management software company MISA JSC is among the beneficiaries amid acceleration of digital transformation of enterprises and household businesses, and growing readiness to spend on solutions thanks to its strengths in accounting software, electronic invoices, and e-signatures.

MISA’s CEO Dinh Thi Thuy said, “We have seen a growth in the number of customers over the past five years. The total number of customers now reaches 230,000 businesses, and we expect more in the months to come. We will continue to develop more skills and software to serve their needs.”

MISA is targeting to expand not only at home, but also abroad. At present, about 5,000 restaurants globally are using MISA management solutions, Thuy explained.

According to Le Nguyen Truong Giang, head of the Digital Transformation Strategy Institute, the trend for developing digital economy and society is opening new opportunities for businesses.

“The local demand for new products, platforms, and services is becoming bigger. Companies should take advantage of the government’s favourable policies and market conditions to tap into new development space and to increase competitiveness amid stiffening competition,” Giang said.

“Businesses in Vietnam are still in the early stage of digital transformation, even VNPT and MobiFone. It does not simply mean applying technology to improve business efficiency, but a comprehensive change in operation and business model towards a new approach and creating new value,” Giang added.

“Every market experiences stagnation after a period of strong growth. The Vietnamese market is no exception. Companies need long-term strategies and vision to grow sustainably.”

Toni Eliasz, senior digital development specialist at the World Bank, said the digital economy is growing faster than the traditional economy and creates significant benefits. However, Vietnam lags in relevant skills. Despite the widespread popularity of basic technologies, advanced technologies such as the cloud, robotics, and big data analytics are still young in Vietnam.

“The most effective online activities require a computer. However, in Vietnam, although the rate of households with an Internet connection is 85 per cent, the rate of households with a computer in the home is only 28 per cent,” said Eliasz. “Vietnam needs to prioritise to achieve digital transformation goals.”

Vietnam Investment Review