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Vietnam is placing greater emphasis on its data market as it aims to undergo a digital transformation of its economy. Understanding the present condition, future trajectory, and factors contributing to growth in this market is crucial.
The Significance of Vietnam’s Data Market in the Digital Transformation Era
Vietnam’s data market is gaining increasing importance as the country strives to undergo a comprehensive digital transformation. The market was valued at US$858 million in 2020, and it is expected to reach US$1.82 billion by 2023, with a projected compound annual growth rate (CAGR) of 5.32 percent from 2023 to 2027. This growth aligns with Vietnam’s commitment to embracing the opportunities of the fourth industrial revolution.
While Vietnam is relatively new to the digital transformation race, it holds significant growth potential, making the market prospects attractive. However, foreign players currently dominate the data market, holding an estimated 70-80 percent market share. Major domestic players such as Viettel, VNPT, and FPT, along with a few small and medium enterprises, account for the remaining 20 percent.
Cloud computing and AI are two sub-sectors within the data market that exhibit high levels of competition. Over the past years, AI and big data have been extensively applied in sectors such as banking and finance, e-commerce, and telecommunications in Vietnam. These advancements indicate the growing adoption of innovative technologies to drive digital transformation in various industries in the country.
Vietnam’s Data Market Revenue 2018 to 2024
| 2018 | 2020 | 2022 | 2024F | |
| Network Infrastructure | 1.22 | 1.24 | 1.26 | 1.35 |
| Storge | .26 | .28 | .30 | .37 |
| Servers | .13 | .15 | .16 | .20 |
| Total | 1.61 | 1.67 | 1.72 | 1.92 |
Source: Statista
Data Market Regulations
Vietnam’s government has taken significant steps towards promoting the development of artificial intelligence (AI) and creating a favorable environment for foreign AI companies. Decision No. 127 outlines the National Strategy for Research, Development, and Application of AI until 2030, aiming to position Vietnam among the top four ASEAN countries in AI applications by 2030. The strategy focuses on various objectives, including developing legislation, infrastructure, ecosystems, and skilled personnel in the AI field.
Decision No. 677 highlights the importance of foreign companies’ contributions to the information communication technology (ICT) sector, particularly in knowledge sharing and human resource skill development. Additionally, Decision No. 2117 prioritizes incentives for the following digital technologies upon market entry:
- Artificial Intelligence (AI)
- Internet of Things (IoT)
- Big Data Analytics
- Blockchain
- Cloud computing, Grid computing, Edge computing
- Quantum computing
- Next-generation network infrastructure (5G, 6G, NG-PON, SDN/NFV, SD-RAN, SD-WAN Network Slicing, LPWAN, IO-Link Wireless)
- Virtual reality, Augmented reality, Mixed reality
- Intelligent, Remediating, and Adaptive cybersecurity
- Digital Twin
- Plant simulation
- Precision agriculture
Key Players in Vietnam’s Data Market
Competition in Vietnam’s data market is fragmented, with no dominant company and a cluster of smaller firms. This presents an opportunity for foreign companies to carve out a share of the market.
In the server and storage system sub-sector, Hewlett Packard Enterprise (HPE) and Dell are prominent players, currently taking up over 40 percent and 28 percent of the server market respectively, followed by Cisco and other firms like Fujitsu and Hitachi.
In management software, data integration, and data analysis, key players include FPT, VNPT, CMC TS, MISA, and HIPT.
The data security market involves major players such as FPT, SAP Asia Vietnam, IBM Vietnam, Viettel Cyber Security Company, Microsoft, Amazon Web Services Vietnam, Cisco, and HPT Vietnam.
Current application of digital technologies in the banking sector
In Vietnam’s banking sector, technology plays a crucial role in driving competition. Around 92 percent of banks are developing mobile banking applications, with a focus on automation and IoT capabilities. Banks collaborate closely with fintech companies in payment services, digital banking, big data, and blockchain. Advanced analytics, AI, machine learning, and chatbots are widely embraced for value creation. Leading examples of digital banking platforms include Timo/Yolo by VP Bank, Robot OPBA by Nam A Bank, and Live Bank by TpBank. However, there is still a gap between global banks and Vietnamese banks in terms of digitalization, presenting opportunities for fintech and ICT solution providers to tap into the banking market.
Overall, the data market in Vietnam is young but dynamic. Their government regulatory initiatives and competitive landscape indicate a welcoming environment for foreign companies looking to enter the data market, particularly in AI and related technologies.
