Digital Transformation Strategy in the Logistics Sector of Emerging Markets: A Case Study of Indotrans, Vietnam

Abstract

The logistics sector in Vietnam plays a critical role in the national economy, contributing significantly to socioeconomic development and global competitiveness. With the advent of the Fourth Industrial Revolution and the COVID-19 pandemic, digital transformation (DT) has become a strategic imperative for logistics enterprises to enhance operational efficiency, reduce costs, and maintain competitiveness. Despite rapid growth in Vietnam’s digital economy and e-commerce, the logistics industry faces challenges such as high logistics costs, limited financial capacity, outdated infrastructure, and workforce deficiencies. Indotrans Joint Stock Company (ITL), a leading logistics enterprise in Vietnam, has proactively embraced DT by developing proprietary digital solutions like the eTMS system, which optimizes road freight operations through automation, real-time data exchange, and integrated functionalities. ITL’s DT efforts have demonstrated clear benefits in operational productivity, cost management, and customer satisfaction, although challenges such as employee resistance, high investment costs, and complex tax procedures persist. The study highlights the importance of managerial leadership, workforce development, technological infrastructure, and innovation in driving successful DT. It also emphasizes the need for a cohesive strategy to build an integrated logistics ecosystem, leveraging mergers and acquisitions to expand resources and capabilities. Strategic recommendations include fostering a digitally skilled workforce, enhancing internal and external communication, and institutionalizing innovation to sustain competitive advantage. ITL’s case exemplifies the transformative potential of DT in Vietnam’s logistics sector, offering insights into overcoming systemic barriers and achieving sustainable growth in emerging markets.