The deputy minister stated this at a meeting to discuss ‘Influence of Internet on the country’s economic growth’ organised by the Vietnam Club of Information Technology Journalists with participation of leaders of the Ministry of Information and Communications, Vietnam’s Internet Association and international IT corporations such as Google, Intel and other domestic enterprises.
At the meeting, the US-based McKinsey & Company released its survey report ‘Online and upcoming: Internet impact on developing countries.’
The Internet contributes to 9 per cent of Vietnam’s gross domestic product (GDP), which is the same as Turkey and Morocco, according to a recent global survey.
The contribution is driven by private consumption of Internet-related products such as broadband and mobile Internet spending, cited the survey.
Private consumption accounts for some 2 per cent of Vietnam’s GDP but is offset by the country’s large trade deficit in Internet-related goods and services.
The survey also pointed out that the GDP contribution of the Internet in Vietnam is still lower than the two per cent average for nine developing countries that the company studied in detail.
However, Shaowei Ying, associate principal in McKinsey’s Singapore office, told at the seminar that the contribution will soon catch up with the average rate and probably be able to reach 2.5 per cent in the near future.
On the other hand, McKinsey’s survey found that e-commerce in Vietnam is still an untapped market with high potential for growth. Shaowei Ying announced that business effectiveness of small and medium enterprises has increased by 19.3 per cent thanks to utilization of Internet.
It said more than one-third of Internet users have visited an online shopping or auction site. Meanwhile, in another survey, 50 per cent of Internet users said they believed that shopping online provides access to a wider range of products.
Moreover, Vietnam’s foundations for e-commerce activity are low in comparison with more developed countries and regional averages, due to low online payment enablement, McKinsey said in the survey.
Vietnam has 30 million Internet users in Vietnam, accounting for 31 per cent of the population. The blooming growth of telecommunications and Information technology in the country has brought hopes of a breakthrough for Vietnam’s economy.
Ann Lavin, Head of the Public Policy and Government Affairs, Southeast Asia at Google Asia Pacific, said the real strength of internet in developing economy is in small and medium enterprises. She added that Google will have a discussion with Vietnam to assist such enterprises to participate in international markets.
Vuong Quang Khai, director of VNG, said during the past 10 years, digital content increased by over 50 per cent, a favourite condition to develop the digital content industry, as more and more subscribers have paid to access or download digital content.
However, it needs an appropriate policy to manage it or else it will fall in the control of foreign countries and affect national security, Khai said.