Vietnam is rising as a fast-growing e-commerce market, marked by strong mobile commerce, increasing foreign investments, a favorable regulatory environment, and enhanced internet access. The country may be less developed than many other e-commerce markets, but it is expanding rapidly, supported by a generation of digital natives starting to earn and spend money.
According to the 2020 E-commerce Payments Trends Report: Vietnam by JPMorgan Chase & Co., the value of Vietnam’s e-commerce market has increased by at least a quarter every year since 2017. Looking ahead, this growth is expected to continue at a compound annual growth rate (CAGR) of 15.1 percent to 2023.
In the same report, Shopee, Lazada, andTiki were named as top shopping apps by monthly active users. Both Shopee and Lazada are competing for market share across Southeast Asia. In contrast, Western giant Amazon does not have a significant market share.
In the latest B2C E-commerce Index report released by the United Nations Conference on Trade and Development, Vietnam has jumped three places to 63rd in global e-commerce readiness ranking.
It means with a score of 61.6 points on a scale of 100, Vietnam surpassed Indonesia (83rd), the Philippines (96th), Laos (101st), Cambodia (117th), and Myanmar (130th). The ranking was based on four indicators with a high correlation to online shopping: internet server access; postal service reliability; share of population who use the internet; and share of population aged above 15 who have an account with a financial institution or mobile-money-service provider.
“The COVID-19 pandemic has made it more urgent to ensure the countries trailing behind are able to catch up and strengthen their e-trade readiness,” Shamika N. Sirimanne, director of UNCTAD’s division that prepares the annual index. The index, she said, underscores the need for governments to do more to ensure more people can avail of e-commerce opportunities.
Nearly 70% of Vietnamese people use the internet and 31% of individuals aged 15 and above have bank accounts or mobile bank accounts. In terms of internet server access and postal reliability, Vietnam scored 64 and 83%, respectively.
“Coming from my experience in handling our offices in the Philippines, Malaysia, and Singapore, I can say that the Vietnam market is more open to new opportunities and challenges. With all the young brands now in the e-commerce game, it just keeps getting better and better each year,” Kristine Nguyen, CEO for AAD Awake Asia.
Leading the e-commerce agency focused on enabling brands online, Kristine sees Vietnam in the number 1 or 2 spot in 5 years time. “Last year was tough but most of my clients managed to double or triple their revenues plus considering the advantages that this country has, there’s no way to go but up.”
(credit: Hiezle Bual)