Vietnam's food trade industry is one of the most dynamic sectors in the country. Fueled by an expanding middle class, rising disposable incomes, and shifting consumer preferences, the increasing demand for high-quality food products is undeniable. From bustling markets in Ho Chi Minh City to modern supermarkets in other major cities, the opportunity for both […]
Ever wondered how Southeast Asia’s markets can take your business to the next level? Vietnam's digital transformation, formally guided by Decision No. 749/QĐ-TTg, is evolving from a local initiative to a structured national program driving economic modernization with global visibility. Vietnam's accelerating digital development is enhancing regional competitiveness and adoption rates, supported by government-led programs and investment in ICT infrastructure. For over two decades I’ve guided international companies through the FDI landscapes of Vietnam, China and Malaysia and this digital leap is one of the most exciting I’ve seen.
But to scale, the country must bridge the gaps in infrastructure, policy and global tech standards. Vietnam's digital transformation is a joint effort by public and private sectors, with government agencies like the Ministry of Information and Communications (MIC) leading regulatory initiatives on ICT and cybersecurity through laws such as the 2018 Cybersecurity Law and the 2023 Personal Data Protection Decree. As a strategic advisor I help both enterprise and public sector leaders build compliant, future-ready digital strategies in what’s becoming ASEAN’s digital hub. Alignment is crucial as the digital economy becomes the central focus for growth, innovation and long-term competitiveness.
Key Points
- National Priority: Vietnam's digital transformation strategy, formalized under Decision 749/QĐ-TTg, is built around three core pillars: digital economy, digital government, and digital society. The government has set an ambitious goal for the digital economy to contribute 20% of GDP by 2025. A key government goal is to have 50% of population to have electronic payment accounts as part of its national digital transformation plan.
- Infrastructure: A key part of the strategy is significant investment in digital infrastructure including the nationwide rollout of 5G, expansion of fiber optic networks and development of data centers and digital platforms.
- Enterprise Adoption Varies: While fintech and e-commerce are digitalizing fast, many traditional SMEs face challenges with legacy systems and talent gap in advanced skills like cloud operations and cybersecurity.
- FDI is a Catalyst: Vietnam is actively courting foreign direct investment in high-tech sectors with top leadership reassuring global companies of improvement in investment environment for technology. The national payment corporation plays a key role in supporting the digital payment landscape and facilitating inter-bank transactions.
- Data Governance is Maturing: With the introduction of new regulations like Personal Data Protection Decree, Vietnam is formalizing its data governance framework, a critical step for global alignment like GDPR.
Why Digital Transformation Matters to Vietnam’s Digital Economy and Economic Future
Vietnam’s national digitalization is a long-term competitiveness play. Vietnam’s digital economy is growing fast and is crucial for the country’s future. This isn’t just about new technology; it’s a fundamental reshaping of the economy.
Key Growth Drivers Behind the National Push
The government has set big goals, aiming for the digital economy to contribute 30% of GDP by 2030. This is driven by powerful internal drivers: a rapidly growing middle class eager to adopt new tech, rapid urbanization and a need to diversify exports beyond traditional manufacturing. The pandemic was a massive inflection point, accelerating the adoption of e-commerce, telehealth and ed-tech almost overnight.
Strategic Sectors Driving the Shift
The transformation is most visible in key sectors:
- Smart Logistics and AI-enabled Manufacturing: Integrating digital tools to create more resilient and efficient supply chains.
- Fintech Adoption: A boom in digital payments, e-wallets and peer-to-peer lending platforms.
- Agritech and Climate Tech: Using technology to improve agricultural yields and support a more sustainable economy.
- Vietnam’s Digital Health Ecosystem: Rapid expansion includes health wearables, telehealth, remote monitoring and chronic disease management applications, reflecting the country’s growing digital health infrastructure.
- Digital solutions are being deployed across sectors like energy, healthcare and logistics to enhance operational efficiency, compliance and innovation.
Vietnam’s National Digital Transformation Program and Strategy to 2025 and Beyond
Vietnam’s approach is structured and methodical, built on a clear government blueprint with big targets.
Government Targets and Milestones
The national strategy has three core pillars: Digital Government, Digital Economy and Digital Society. Digital administration is also recognized as a pillar, supporting modernization of public sector services and operational efficiency. Lead ministries, including the Ministry of Information and Communications (MIC), are working towards concrete KPIs, such as 80% of population to have electronic payment accounts. A recent article from VietnamPlus highlights that this comprehensive strategy is creating opportunities for businesses that can align with these national goals.
Regulatory and Data Governance Evolution
A big win for foreign investors has been the introduction of the Personal Data Protection Decree (PDPD) in 2023. This is Vietnam’s first comprehensive law on data privacy and is a step towards global standards like GDPR. The PDPD covers personal location data and imposes stricter data protection rules for both local and foreign companies operating in Vietnam.
For any company handling customer data – from cloud providers to e-commerce platforms – understanding and complying with the PDPD is a non-negotiable part of a risk-proof strategy. The law requires foreign firms to retain data and companies to retain original data within Vietnam’s jurisdiction to facilitate compliance and auditing.
National security is the key driver behind data localization and regulatory measures to ensure digital data is protected and managed in line with government priorities for digital government and economic growth.
Digital Infrastructure
You can’t have a digital economy without the infrastructure to run it on. As outlined in a strategic overview by InCorp Asia, Vietnam is building out this critical infrastructure. This includes rolling out 5G, expanding the national broadband network to rural areas and developing a strong domestic data center market.
Cloud computing, cloud computing services and regulation of internet services and internet telecommunication businesses are key to Vietnam’s digital infrastructure strategy. Smart city deployments are underway in Hanoi, Ho Chi Minh City and other urban centers creating opportunities in everything from smart traffic management to digital energy grids where data analytics platforms are being used for optimization and predictive maintenance.
Digital Government Initiatives Driving Change
Digital government initiatives are at the heart of Vietnam’s digital transformation journey, driving a new era of public sector efficiency and citizen engagement. Under the National Digital Transformation Program, the government has set big targets to process 90% of administrative records online and fully interconnect all national databases by 2025.
Central to this is the National Public Service Portal which now offers access to over 2,200 digital government services, making it easier for citizens and businesses to interact with state agencies.By digitizing core administrative processes and building comprehensive databases of citizens and enterprises, Vietnam is reducing bureaucratic hurdles and creating a more transparent and responsive public sector.
These digital government initiatives not only improve service delivery but also lay the groundwork for broader economic growth by enabling faster and more reliable interactions between government, businesses and the public. As digital technologies evolve, Vietnam’s commitment to a citizen-centric, digitally empowered government will be a key driver of its digital transformation.
Building the Digital Infrastructure
Vietnam’s digital transformation is built on a robust and rapidly expanding digital infrastructure. The government has prioritized investments in high-speed internet, nationwide 5G networks and state-of-the-art data centers to ensure the country’s digital economy has a solid foundation. Major cities and industrial zones are seeing the rollout of dedicated IT parks and innovation centers to nurture the development of advanced digital technology products and services.
A major milestone in this journey is the planned transition to IPv6 by 2025 which will enable Vietnam to support the explosive growth of internet-connected devices and next-generation digital applications. By building out this comprehensive digital infrastructure, Vietnam aims to create an environment where digital innovation can thrive, support entrepreneurship and drive long-term economic growth. This is positioning Vietnam as a regional leader in digital readiness to capitalise on the opportunities of the digital age.
Enterprise Digitalization in Vietnam. What’s Working and What’s Not
While the national strategy sets the vision, adoption at the enterprise level is a mixed bag.
Where Adoption Is Happening Fast
Some sectors are moving very quickly.
- Banking and Finance: eKYC (electronic Know Your Customer) has been widely adopted and banks are piloting open banking frameworks. The local digital payment ecosystem and Vietnam’s digital payment industry is growing rapidly supported by government initiatives and innovative solutions from key players making digital transactions more seamless and accessible.
- Retail: Major players have adopted omnichannel strategies, integrating online and offline experiences with digital loyalty programs.
- Manufacturing: Larger firms, especially those in the FDI sector, are implementing ERP systems, predictive maintenance and robotic process automation to boost efficiency.
- IT Industry: The IT industry is also a key sector that is digitalizing fast and contributing significantly to Vietnam’s digital economy development.
Bottlenecks to Digital Maturity
But challenges remain. A report from the US-ASEAN Business Councilnotes that while the opportunities are huge, the workforce needs upskilling and the regulatory landscape is evolving. The talent gap is particularly acute in areas like cybersecurity, cloud architecture and data science.
For many SMEs, legacy systems and a cultural reluctance to invest in new integrated platforms are slowing down their digital journey. The digital divide is a challenge especially for SMEs and rural areas where disparities in digital infrastructure and access to technology are hindering broader adoption.
Digital transformation center initiatives are supporting enterprise adoption while digital transformation is a national priority driving change across sectors.
Building a Digital Society and Inclusion
Vietnam’s vision for a digital society is about inclusivity and equal opportunity. Recognizing that the benefits of digital transformation must reach every corner of the country, the government has launched initiatives to bridge the digital skills gap and expand access to digital services. The National Digital Transformation Program includes measures to boost digital literacy particularly in rural and underserved areas so that all citizens can participate in the digital economy.
Efforts to expand universal broadband access and promote digital payment solutions are key to this strategy making it easier for individuals and businesses to access digital services in key sectors like education, healthcare and finance. By prioritizing digital inclusion Vietnam is building a more connected and resilient digital society where everyone has the tools and opportunities to thrive in the digital age.
Vietnam in ASEAN’s Digital Supply Chain and Investment Flows
Vietnam is positioning itself as a key node in the regional and global tech supply chain. The government is actively courting high-tech FDI and it’s working. Government agencies play a crucial role in facilitating FDI and digital infrastructure projects aligning with the government’s goal to make Vietnam a digital supply chain hub.
Tech FDI and Venture Capital Trends
A September 2024 Reuters report noted a meeting where Vietnam’s top leader told major U.S. corporations including tech giants that the country will improve its institutional frameworks and policies to support their investments. This is a strong signal to the market. We are seeing a steady flow of venture capital and private equity into Vietnamese SaaS companies, online marketplaces and digital infrastructure projects. These projects are increasingly focused on national critical information systems and deployment of advanced ICT solutions to enhance security and operational efficiency.
In the context of smart city and energy projects, there is growing emphasis on urban infrastructure management, smart grid technologies and power distribution management.
As FDI consultants we are at the forefront of this trend, helping cloud and SaaS companies set up their legal entities, protect their intellectual property in cross-border structures and plan for long-term growth and exit, all within the context of the present digital economy driving regulatory and investment trends.
Cybersecurity Measures and Risks in Vietnam’s Digital Journey
As Vietnam’s digital economy grows so does the importance of robust cybersecurity and data protection. The government has responded by setting up a national cybersecurity center and enacting the Personal Data Protection Decree which sets out clear data protection principles and requirements for all organizations handling personal data. This legal framework is designed to protect sensitive information and align Vietnam’s data protection standards with international best practices.
Public awareness campaigns and cyber information security services are educating citizens and businesses about data breaches, cyber attacks and online fraud. But as digital transformation accelerates the threat landscape is evolving. Companies operating in Vietnam must remain vigilant, prioritizing cybersecurity and compliance with data protection regulations to ensure safe and secure data exchange that underpins the digital economy.
Digital Innovation and Entrepreneurship
Vietnam’s commitment to digital innovation and entrepreneurship is driving the next wave of growth. Through initiatives like the National Technology Innovation Program and the National AI Strategy the government is supporting the development and adoption of emerging technologies like artificial intelligence, blockchain and Internet of Things. These programs provide startups and SMEs with funding, mentorship and digital tools while innovation hubs and incubators create a collaborative environment for new ideas to flourish.
By developing an entrepreneurial ecosystem Vietnam aims to enable digital technology companies to create high value products and services, job creation and increase the country’s global competitiveness. Vietnam’s focus on digital innovation is not only transforming the digital economy but also positioning the country as a player in the global digital technology industry.
How Vietnam’s Tech Evolution Fits with Global Trends
Vietnam’s digital strategy is not happening in isolation. It is aligning with major global shifts, particularly around sustainability and governance.
- ESG and Digital Convergence: Technology is becoming an enabler for sustainability goals. We see this in smart energy meters, blockchain for green supply chains and digital dashboards for climate targets.
- Cybersecurity and AI Ethics: As the digital economy matures so does the focus on security and ethics. The government and industry bodies are developing new frameworks for AI sandboxing and promoting cooperation on cybersecurity at the ASEAN level. There is growing emphasis on regulatory frameworks for digital technology products created by AI and other emerging technologies including labeling and risk classification. Virtual and augmented reality are being addressed in new draft laws and strategic frameworks as they become more important and risky. Companies violating Vietnam’s cybersecurity law may face sanctions, data localization requirements and other legal consequences from authorities.
Vietnam’s Digital Growth and Digital Infrastructure Must Be Global
The momentum behind Vietnam’s digital transformation is unstoppable. The country has the vision, demographic tailwinds and political will to become a digital powerhouse. But long term success will depend on its alignment with global standards on data governance, security and open competition.
For enterprises and investors this is a huge opportunity. Viettonkin is here to help you engage, scale and de-risk your investments in this market. From data laws to public private partnerships your digital transformation strategy must be managed with the same rigor as any high growth investment. The time to invest in tomorrow’s breakthrough is today.
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