This will be an opportunity for domestic enterprises to build a new business strategy, and approach a modern and prestigious distribution channel.
According to a report by Vietnam e-Commerce and Digital Economy Agency (governed by Ministry of Industry and Trade), with 53% of the population shopping online, the e-commerce market in Vietnam grew by 18% in 2020, reaching 11.8 billion USD, which accounted for 5.5% of total retail sales of consumer goods and services.
According to the National E-Commerce Development Master Plan for the period 2021 – 2025, 55% of the population will have participated in online shopping by 2025 with the average value of online purchases of goods and services reaching 600 USD / person / year. Revenue of B2C e-commerce model is forecasted to increase by 25% / year, reaching 35 billion USD, accounting for 10% of total retail sales of goods and services.
Compared to other countries in Southeast Asia, Vietnam is among the fastest growing retail markets. Since 2015, the growth rates of the three largest digital economies in the region have averaged around 35 - 36%. In particular, that of Vietnam ranked 2nd and reached 36%, following Indonesia with 41%.
Research by Nielsen shows that, since the outbreak of the Covid-19 pandemic, the demand for shopping on e-commerce platforms has increased sharply. Last year, 70% of Vietnamese people had access to the Internet, and 53% of e-wallet users made payments when buying online, an increase of 28% compared to 2019.
According to Amazon Vietnam, Vietnamese sellers have exceeded 1 million USD in sales in 2020 on Amazon, a tripling from 2019.
Experts predict that e-commerce will continue to thrive in 2021 and create a new impetus for economic growth. At the same time, this is also an opportunity for Vietnamese businesses to build new business strategies, and approach modern distribution channels, thereby expanding markets and recovering from the pandemic.
Major online shopping platforms in Vietnam have added entertainment games, livestreams, and social media vibes.
According to Mr. Tran Tuan Anh, Managing Director of Shopee Vietnam, due to the social distancing period, consumers started to use online platforms to both satisfy essential daily needs and entertainment purposes. Therefore, e-commerce applications must integrate many interactive elements such as games and livestreams to increase connection with users.
Shopee predicts that there are 3 main development trends in 2021 including increasing adoption of digital payments, promoting logistics, and changing the way sellers sell their products.
Specifically, the total number of orders paid through Airpay on Shopee across Southeast Asia grew 4 times. In particular, most users making digital payments are over 50 years old.
In the context of government moving towards a cashless society, the Covid-19 epidemic has become a driving force behind this process in some fields where most transactions are conducted in cash.
In addition to increasing wallet usage on e-commerce, traditional stores are also accepting wallet payments. The number of partner stores in Vietnam using AirPay wallet payments also doubled in 2020.
In the year 2021, consumers expect more efficient deliveries. Therefore, businesses and sellers need to use technology effectively to ensure that goods are delivered quickly and economically. To do this, it is necessary to monitor the entire process from moderation to delivery, including the continual strengthening of logistics networks and warehouse capacity.
Shipping is the key to many online shopping platforms. It has been incorporated into Tiki's development strategy in 2021. Mr. Richard Trieu Pham, Chief Financial Officer of Tiki, said the platform has invested dozens of millions of dollars in technology and logistics systems each year, and the figure is projected to increase in the future.
The technology and the end-to-end supply chain of Tiki help ensure the shortest order processing time and delivery time with the lowest cost thanks to the reduction of intermediary steps, optimizing the use of resources which helps identify the fastest route.
In 2020, Tiki recorded a reduction of more than 25% in logistics costs per order and a return rate of less than 1%.
The pandemic has encouraged businesses from high-end brands to small businesses to promote online businesses. This has led to the third trend where businesses and sellers have to adopt an innovative digital strategy to approach users in the context of social distancing.
For example, last year, Shopee combined with Pond's brand to integrate AI into shopping and skin care consulting for customers.
Source: Compiled by VietnamCredit
