Connect With Authors
*Your message will be sent straight to the team/individual responsible for the article.
Menu
The e-commerce industry in Vietnam has experienced remarkable expansion over the past ten years, boasting an average growth rate of over 60%. Currently, the online retail sector is valued at nearly $10 billion in sales, accounting for approximately 5.8% of the total retail market. Although Vietnam trails other nations in terms of online retail adoption, the country is renowned for its innovation in this field. Amidst the COVID-19 pandemic, Vietnam’s popular chat app, Zalo, and local retailers demonstrated their agility in swiftly implementing novel solutions to cater to customer needs.
Historically, the adoption of e-commerce in Vietnam has been propelled by the increasing number of internet users and the growth of digitally-savvy consumers. The COVID-19 pandemic has further spurred e-commerce usage due to concerns about the spread of the virus. Moreover, the Vietnamese government’s initiatives to promote e-commerce adoption are expected to foster growth among those who don’t usually engage in online shopping. The government’s strategy aims to raise e-commerce usage among the population to 55% and boost per capita e-commerce spending to around $600 by 2025.
During the pandemic, as customers have moved away from their usual brick-and-mortar stores, many merchants have adapted by shifting their focus to digital platforms to maintain customer engagement. For instance, Big C, one of Vietnam’s largest retailers, now allows its customers to place orders through Zalo and have their purchases delivered to their homes.
There was also the “Ung ho nong san Viet” (Support Vietnamese agricultural products) initiative, a collaboration between Saigon Union of Trading Cooperatives and mobile payment platform Momo, aimed to sell Vietnamese lychee on the Momo platform amid the pandemic. With lockdowns and social distancing, consumers preferred online shopping, leading to increased support for the program. To further assist, the Vietnamese government encouraged e-commerce platforms to sell fresh food. In response, Tiki launched TikiNgon, and Lazada expanded its product assortment to include fresh food. As non-grocery retailers temporarily closed during the 2021 lockdown, consumers heavily relied on e-commerce platforms like tiki.vn, lazada.vn, and shoppee.vn for groceries.
We are also seeing an increasing number of small and medium-sized retailers are turning to e-commerce to benefit from its reduced maintenance costs and lack of rental fees. These retailers often distinguish themselves from larger competitors by providing a wider variety of products imported from Thailand and South Korea. The competitive pricing appeals to younger consumers, who are also leading the e-commerce adoption. Their involvement in social media exposes them to rapidly changing fashion trends, driving consistent demand for health and beauty products. As a result, both consumer health e-commerce and beauty & personal care e-commerce are projected to grow faster than the overall channel average in the coming years.
Although Vietnam’s e-commerce growth rate in 2022 is among the slowest of the decade (due to the base effect), the market remains dynamic and offers significant potential. This is attributed to increased consumer spending on non-grocery items, buoyed by a positive economic outlook. As vaccination rates increase and pandemic-related uncertainties subside, store-based retail sales are expected to recover. While e-commerce reliance might decrease, it will continue to exhibit robust double-digit value growth, fueled by urban consumers seeking convenience amid their hectic lifestyles.
E-commerce in Vietnam is still in a competitive and rapidly evolving stage, with no clear leader in the market. Shopee is currently the dominant player in terms of both retail sales and volume, but other companies such as Tiki and Lazada also have strong positions in the market. It is likely that the landscape will continue to change as new players enter the market and existing ones adapt to changing consumer needs and preferences.
Trends driven by the COVID-19 pandemic, such as social commerce and omni-channel strategies implemented by retailers, are causing significant changes in the market as well.
In Vietnam, There are about 4.1% of people use credit cards, and 26.7% of people use debit cards. While there are 18.7% of people purchase on the internet, there is only 9.2% of people with online banking accounts.
For E-Commerce Customers in VietnamWhat are the major driving factors to purchasing online?
There is 51.78 million consumer goods e-commerce users in Vietnam, and they spend total of around 12.42 billion USD dollars in 2021. That makes a per capita spending on consumer goods e-commerce of around 240 USD. Also, in those e-commerce users, about 50.2% of them purchase through their mobile phone.
Our consumer research practice tracks what customers spend and how they make decisions across major economies in the world.
