Vietnam ICT Market Outlook to 2030

Vietnam ICT Market Overview

The Vietnam ICT market is valued at USD 20 billion, with a strong growth trajectory propelled by the government's focus on digital transformation and increasing internet penetration across the country. This market's expansion is significantly driven by advancements in technology, which facilitate more robust communication infrastructures and promote the adoption of digital services. As businesses and consumers increasingly rely on digital solutions, investments in ICT are expected to continue to rise, further enhancing market dynamics.

Vietnam's ICT market is dominated by key cities such as Ho Chi Minh City and Hanoi, which serve as technological hubs due to their significant investment in infrastructure and skilled workforce. The concentration of educational institutions and technology companies in these urban centers fosters innovation and collaboration. Additionally, government initiatives supporting the ICT sector in these regions contribute to their dominance, positioning them as leaders in technology adoption and digital service provision.

In 2020, the Vietnamese government launched the National Digital Transformation Program, aiming to develop a digital economy and society by 2025. The program focuses on integrating digital technologies across various sectors, including government services, healthcare, and education, to enhance efficiency and competitiveness. It also emphasizes the development of digital infrastructure, human resources, and cybersecurity measures to support the ICT sector's growth.

Vietnam ICT Market Segmentation

By Product Type: The Vietnam ICT market is segmented by product type into hardware, software, IT and infrastructure services, and telecommunication services. Among these, hardware holds the dominant market share due to the rapid expansion of network infrastructure and increasing demand for electronic devices. The proliferation of smartphones and computers has further fueled this segment, making it critical for both consumer and business needs. Companies are continually investing in the latest technology to meet rising demands, enhancing the segment's growth and solidifying its position within the market.

By Industry Vertical: The Vietnam ICT market is also segmented by industry vertical, including Banking, Financial Services, and Insurance (BFSI), Information Technology (IT) and Telecom, Government, Retail and E-commerce, Manufacturing, and Energy and Utilities. The BFSI sector leads the market share, driven by the rapid adoption of digital banking solutions and fintech innovations. The increasing demand for secure, efficient, and user-friendly banking services has prompted significant investments in technology to enhance customer experience and streamline operations.

Vietnam ICT Market Competitive Landscape

The Vietnam ICT market is characterized by a competitive landscape featuring several major players, including local firms and international corporations. The dominance of key companies such as Viettel Group and FPT Corporation highlights the significant influence of established brands that are well-positioned to capitalize on the growing demand for ICT solutions. Their investment in research and development, coupled with strong market strategies, enhances their competitive advantage in this dynamic market.

Vietnam ICT Market Analysis

Growth Drivers

• Government Initiatives for Digital Transformation: The Vietnamese government has been proactive in promoting digital transformation to enhance economic growth and public service efficiency. In 2020, the government approved the National Digital Transformation Program, aiming to develop a digital economy and society by 2025. This initiative focuses on integrating digital technologies across various sectors, including government services, healthcare, and education. The program also emphasizes the development of digital infrastructure, human resources, and cybersecurity measures to support the ICT sector's growth.
• Increasing Internet Penetration: Vietnam has experienced significant growth in internet usage, with over 70 million internet users as of 2023, accounting for 79.1% of the population. This widespread internet adoption has been facilitated by the expansion of broadband infrastructure and affordable mobile data plans. The increase in internet users has spurred demand for online services, e-commerce, and digital content, thereby driving the growth of the ICT market.
• Expansion of E-commerce and Digital Payments: The e-commerce sector in Vietnam has seen rapid growth, with revenue reaching $13 billion in 2023. This expansion is supported by a young, tech-savvy population and increasing internet penetration. Additionally, digital payment methods have gained popularity, with mobile payment transactions surpassing $20 billion in 2023. The rise of e-commerce and digital payments has created opportunities for ICT companies to develop and provide related technologies and services.

Challenges

• Infrastructure Limitations in Rural Areas: Despite significant advancements in urban areas, rural regions in Vietnam still face challenges related to ICT infrastructure. Approximately 30% of the population resides in rural areas with limited access to high-speed internet and reliable telecommunications services. This digital divide hampers the widespread adoption of ICT solutions and restricts market growth in these regions. Addressing these infrastructure gaps is crucial for the inclusive development of Vietnam's ICT sector.
• Data Privacy and Cybersecurity Concerns: As digital transformation accelerates, concerns about data privacy and cybersecurity have become more prominent. In 2023, Vietnam experienced over 10,000 cyberattacks on information systems, highlighting vulnerabilities in digital infrastructure. The government has enacted the Cybersecurity Law to address these issues, but businesses must invest in robust security measures to protect sensitive data and maintain consumer trust, which can be resource-intensive.

Vietnam ICT Market Future Outlook

Over the next five years, the Vietnam ICT market is expected to experience significant growth, driven by continuous government support, advancements in technology, and increasing consumer demand for digital solutions. The focus on digital transformation across various sectors, including healthcare, education, and finance, will further enhance market opportunities. Additionally, the rising popularity of cloud services and cybersecurity solutions will play a crucial role in shaping the future of the market.

Market Opportunities

• Development of Smart Cities: Vietnam is actively pursuing the development of smart cities to enhance urban living and sustainability. Cities like Ho Chi Minh City and Hanoi have initiated projects focusing on smart infrastructure, transportation, and governance. For example, Ho Chi Minh City has invested in a smart traffic management system to reduce congestion. These initiatives create opportunities for ICT companies to provide solutions in areas such as IoT, data analytics, and urban planning technologies.
• Growth in Fintech and Digital Banking: The fintech sector in Vietnam is expanding rapidly, with over 150 fintech companies operating as of 2023. Digital banking services are gaining traction, with digital wallets like MoMo reaching 20 million users. The government's support for cashless transactions and financial inclusion provides a conducive environment for fintech innovations, offering ICT companies opportunities to develop and implement financial technologies.