According to the startup ecosystem report by Nextrans, the increasing convenience and security of online transactions is driving the growth of the e-commerce sector. Social distancing during the COVID-19 pandemic has built customers' cashless payment habits in Vietnam, making Vietnam one of the countries with a high rate of cashless payments in Southeast Asia.
According to a report by Visa, currently in Vietnam, 65% of consumers carry less cash than before, and 76% of consumers are using e-wallets.
Tiki and Lazada have integrated online payment solutions such as VNPay and eMoney. ZaloPay has partnered with 269 more retailers and service providers in the past year in addition to existing brands, such as Baemin, Sendo and Circle K. Collaboration between leading e-commerce platforms and e-payment giants such as VNPay, MoMo, ZaloPay and ShopeePay, will further boost demand for online shopping and use of cashless payment methods.
The quality of logistics services has a significant impact on the cost of e-commerce transactions, transaction speed and the safety of goods. Customers' expectations about delivery activities have pushed businesses to improve technology in the logistics field, thereby ensuring that goods are delivered quickly and economically.
Delivery services have been included in Tiki's growth strategy since 2021. As noted by Tiki, the platform invests $10 million in technology and logistics every year. This figure is expected to increase in the near future.
Shopee is also in the same race. The platform has accelerated Shopee Express development to reach more and more users in rural areas, resulting in a 3 times increase in the number of items shipped from the warehouse.
The pandemic has also spurred businesses to diversify in terms of operating models on online platforms. E-commerce platforms have integrated forms of entertainment games, live streaming and social networks into the platform to better support businesses.
With market share mainly in the hands of the big 4 Shopee, Lazada, Tiki, and Sendo and customers' shopping habits predominating on these channels, it is very difficult for startups to penetrate the B2C market with the traditional e-commerce model.
This forces startups to look for opportunities in niche markets where customer needs are still unmet. At the same time, these companies must have innovative business models and adapt quickly to survive in the market.
Recognizing that the traditional e-commerce market is fiercely competitive, a number of new startups have focused on modern e-commerce solutions, especially fast commerce.
However, currently, the logistics infrastructure is not complete, the legal framework is still lacking, which has not created conditions for some types of startups to develop. According to Nextrans, the closure of newly established businesses not only shows that their business models are not suitable, but is also signal for the State to focus on improving infrastructure and other growth drivers.
Compiled by VietnamCredit