Ecommerce in Vietnam is experiencing fast development due to growth in online shopping preferences, various ecommerce platforms, effective delivery, and the shifting in payment methods.
However, there are challenges requiring the country and businesses to improve to guarantee trustable and secure platforms. Let’s scroll down to learn about the major players, key trends and challenging issues in Vietnam’s ecommerce market!
How Are Market Players Expanding Their Presence?
Ecommerce in Vietnam is growing with the role of major market players, including:
Local E-commerce Giants
Local e-commerce giants such as Sendo and Tiki greatly contribute to ecommerce growth in Vietnam since they give businesses access to their clients, logistical network, and market knowledge. Companies may expand operations and improve their reputation in the Vietnamese market by partnering with these platforms.
International Market Entrants
The e-commerce sector in Vietnam has experienced notable expansion with the entry of major firms such as lotte.vn and aeoneshop.com in 2017. In 2018, Amazon also joined the market to assist SMEs in exporting goods.
International businesses provide resources, technology, and global experience to the Vietnamese market. They construct local offices, distribution hubs, and customer support staff in order to tailor their services to Vietnamese customer preferences. Campaigns for strategic marketing aid in increasing their brand recognition in the local market.
Collaboration and Partnerships
Long-term prospects for e-commerce in Vietnam depend on the development of a strong logistical infrastructure, especially regarding last-mile connectivity. The majority of e-commerce companies are unable to manage logistics on their own, which creates a need for third-party logistics providers (3PLs).
Platforms of top ecommerce in Vietnam, such as Tiki, Lazada, and Grab, have their own logistics departments. Companies such as Sendo and Shopee use 3PL partners to guarantee prompt and reliable delivery for their clients. It emphasizes how crucial effective logistics are to expanding shopping online in Vietnam.
What Are the Key Trends in Vietnam’s Ecommerce Market?
Ecommerce in Southeast Asia, specifically in Vietnam, is experiencing changes that are shaping users’ new shopping habits and payment methods.
Mobile Commerce Growth
For Vietnamese merchants, mobile commerce is essential since users prefer applications over browsers when making online transactions in Vietnam.
Foreign e-commerce platforms dominate the market. In February 2022, the Ministry of Information and Communication released data revealing that there were 78.5 million Shopee users, 14.8 million Lazada users, 14.1 million Tiki users, and 12.7 million Good Market users.
The Influence of Social Commerce
Social commerce is one of the important factors in e-commerce in Asia and Vietnam. Vietnam has a high rate of social media usage for both personal and commercial purposes.
User-generated content, such as reviews on these social networks, and the seamless shopping experience contribute to the growth of Vietnamese customers’ online shopping habits.
Growth of Regional E-commerce Platforms
Ecommerce in Vietnam has seen significant growth, with Vietnamese-origin platforms like Tiki, Sendo, and Thegioididong becoming major powerhouses. These platforms also receive investments from Japan, Germany, the US, South Korea, China, and Singapore.
On the other hand, postal services are increasingly replacing traditional delivery services. For example, JD.com invested VND 1,000,000 million in Tiki.
Adoption of New Payment Methods
The COVID-19 epidemic and the growth of e-commerce have contributed to the expansion of Vietnam’s digital payments industry. Although a sizable portion of online transactions still involve cash payments, this percentage is predicted to drop by 2025.
The nation’s booming e-commerce sector and beneficial regulatory changes fuel the expansion of digital payment methods. E-wallets are expected to increase at the highest rate of all payment methods.
Plus, Vietnam’s 4G infrastructure is developing quickly, which has lowered the cost of mobile internet and increased the country’s mobile phone base to over 100 million registered users. The number of QR-code payments is expected to triplicate, reaching a value of 74% and a volume of 172%. Since they are convenient and simple to use, these new payment methods are becoming more and more popular in Vietnam.
How Are Logistics and Infrastructure Adapting to the Ecommerce Boom?
The ecommerce growth in Vietnam requires adaptations in logistics and infrastructure, including:
Development of Delivery Systems
Delivery systems are developing to cope with the booming ecommerce in Vietnam. Fulfillment centers have expanded to save costs and improve delivery times. Modern technologies, including automated sorting systems, inventory tracking software, and warehouse management systems, are being implemented to optimize processes.
Ecommerce companies are also forming partnerships with logistics providers to improve delivery efficiency, get more affordable prices, and guarantee the safe and reliable delivery of goods across the country.
Read more: A Guide to Logistics and Warehousing in Vietnam
Innovations in Last-Mile Delivery
Innovations in last-mile delivery ensure shoppers receive their items quickly and correctly. Delivery applications make real-time tracking and updates possible, increasing customer satisfaction and shipping transparency.
In highly populated locations, micro-warehouses and pickup locations facilitate effective last-mile delivery, thereby cutting down on delivery times and expenses. Besides, logistics businesses invest in route optimization software to build effective routes based on traffic conditions and reduce delivery times and fuel usage.
Read more: How is E-Commerce Changing Logistics?
What Are the Challenges Facing Ecommerce Growth in Vietnam?
Although ecommerce in Vietnam is booming, some issues are affecting its growth.
Regulatory and Legal Challenges
Businesses face uncertainty as the regulatory framework for e-commerce in Vietnam has not been completed. Getting licenses and permissions may be difficult and time-consuming, and there are differences in the requirements for local and international companies. The tax law also needs to be clear and consistent to support the e-commerce expansion.
Consumer Trust and Security Issues
Secure online payment systems are essential for fostering customer confidence due to the potential for fraud, data breaches, and insufficient channels to discourage transactions. Consumers may be discouraged by worries about fake goods or disparities in product quality.
Competition and Market Saturation
Vietnam’s e-commerce industry is fiercely competitive. Maintaining consumer confidence in e-commerce systems and rapidly addressing concerns require efficient customer service and dispute-resolution methods. It may be difficult for small and medium-sized businesses (SMEs) to distinguish themselves from their larger competitors.
Plus, the saturation of the market might make it challenging for new players. They need to differentiate their goods and services from others via innovative and focused marketing techniques. Ecommerce in Vietnam is a competitive market, making attracting and keeping consumers costly. Businesses need to make investments in marketing campaigns, loyalty plans, and customized shopping experiences.
Be a Leader in Ecommerce Growth
Ecommerce in Vietnam is expanding quickly due to many factors. An innovative system of factories, warehouses, and logistics will be essential for businesses to remain competitive, follow the trend, and keep up with the growth.
Therefore, you can contact Savills Vietnam at the hotline number 0986.718.337—Mr. John Campbell—for advice on industrial real estate projects in Vietnam.
