|Digital transformation has become an inevitable trend for businesses to improve their competitiveness|
Data from the Ministry of Planning and Investment show that Vietnam currently has around 870,000 operational businesses, of which 94 percent are micro- and small-sized enterprises.
In 2020, about 68.24 percent of Vietnamese businesses generated revenues, a drop of 1.52 percent compared to the previous year. Of the total, around 39.23 percent had revenues of less than VND3 billion, 13 percent with VND3-10 billion, 13.21 percent with VND100-300 billion, and less than one percent with over VND300 billion. Average revenues reached VND22.14 billion per firm in 2020, a decline of VND1.07 billion compared to the previous year.
In 2021, the resurgence of Covid-19 has plunged many businesses into difficulties. According to the Ministry of Planning and Investment, about 11,700 businesses withdrew from the market each month.
The Ministry of Planning and Investment is developing a program to support digital transformation in enterprises, cooperatives and household businesses during the 2021-2025 period. The program aims to make all production establishments aware of digital transformation by 2025; to support at least 500,000 production establishments; and to gain success in digital transformation for at least 800 enterprises, 100 cooperatives and 4,000 household businesses, with priority given to those in manufacturing, processing, agriculture and tourism.
According to the Ministry of Planning and Investment, the demand for innovation and digital transformation has become increasingly urgent because it helps enterprises renew growth, gradually shift their business activities to digital platforms, cut costs, improve business efficiency, and enhance competitiveness. A Market Research Future survey found that the global digital transformation market size reached US$250.65 billion in 2018 and is expected to reach about US$817.05 billion by 2025, growing at a compound annual rate of 18.87 percent.
Digital transformation has taken root in Vietnam. Many production establishments have applied software and solutions to online and omni-channel sales, marketing, customer management and distribution channel management. Specifically, more than 100,000 stores in Vietnam are using the KiotViet software for sales management, while several hundred thousand units are doing business on e-commerce platforms, such as Sendo, Tiki, Lazada, and Shopee.
Many businesses have acknowledged the importance of digital transformation, but still face challenges in accessing it due to limited financial resources. According to a 2020 survey conducted by the Vietnam Chamber of Commerce and Industry (VCCI) and the Japan External Trade Organization (JETRO), 55.6 percent of 400 surveyed businesses in Vietnam pointed out financial limitations in technology application. Additional costs of changing the process and training human resources were also underlined in the survey.
|In addition to funding support, the program will establish a network of experts to advise businesses on digital transformation and support digital transformation training for production establishments.|
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