Metric's newly released report shows that total revenue in the first 9 months of this year in Vietnam's e-commerce market reached VND 163,000 billion, an increase of more than 54% over the same period. The first three quarters’ e-commerce revenue was even 7% higher than last year, equivalent to nearly VND 10,000 billion.
According to Metric, this is due to the significant contribution from "rookie" TikTok Shop with VNd 25,000 billion in revenue in 9 months. In the third quarter alone, TikTok Shop was the unit with the second largest market share in terms of revenue in Vietnam, with more than VND 10,000 billion.
During the period, Shopee still led with revenue of more than VND 43,700 billion, far ahead of Lazada in third place with VND 8,700 billion. Two domestic e-commerce platforms, Tiki and Sendo, ranked 4th and 5th with revenue of VND 599 billion and VND 29 billion, respectively.
Based on revenue results, Shopee holds 69% of the market share, TikTok Shop holds 16%, Lazada holds 11% and the remaining 1% belongs to Tiki. This is the second quarter that TikTok Shop has maintained a large market share in Vietnam, far surpassing its rival Lazada.
Previously, the second quarter of 2023 was the first quarter to record TikTok Shop's revenue exceeding Lazada's revenue in the e-commerce market.
Not only in Vietnam, TikTok Shop is also redistributing the e-commerce market share in the region. This year, TikTok Shop aims for total gross merchandise value (GMV) to reach VND 15 billion. This is a significant increase compared to what TikTok Shop achieved in 2022 (USD 4.4 billion).
According to Momentum Works, if TikTok Shop achieves its set goals, the market share of this e-commerce platform in the region will be approximately the same as Tokopedia (estimated 13.9%) and slightly lower than Lazada (estimated 17.7%) this year.
Ms. Weihan Chen, head of market research at Momentum Works, believes that TikTok Shop can be a serious competitor to other e-commerce platforms in the region.
To compete with TikTok Shop, Shopee - the e-commerce platform with the largest market share said it will focus more on the livestream feature. This will cause Shopee to compete more fiercely with its competitors because livestream has long been a key feature of TikTok.
The strategy for TikTok Shop to advance quickly in the e-commerce market can be encapsulated by the term "Shoppertainment" (combining shopping and entertainment).
According to Boston Consulting Group, entertainment shopping is a "$1,000 billion opportunity" in the Asia-Pacific region. It is expected that the Shoppertainment market size will reach USD 1,000 billion by 2025, up from USD 500 billion in 2022.
Vietnam belongs to the stable market group with an expected Shoppertainment market share of 25-40%, with a capacity of less than USD 15 billio. This factor has helped TikTok Shop quickly assert its influence, rising to become the e-commerce platform with the second largest revenue in Vietnam even though it only entered the market last April.
Compared to the same period last year, the third quarter of 2023 continued to witness a sharp decline in the number of sellers when the decrease reached 12%.
According to Metric, the first reason comes from objective market factors. The domestic economy in the first 9 months of the year faced many difficulties and challenges when the general economic situation of the world was still unstable.
At the same time, the fact that consumers are "tightening their belts" and increasingly calculating their spending more carefully has directly negatively impacted sellers on e-commerce platforms.
Compiled by VietnamCredit