Vietnam’s E-Commerce market experienced rapid growth in 2021, with no indications of slowing down, thanks to the rapid inflow of foreign investments, a good regulatory framework, and improved internet access. Online orders are predicted to account for nearly a tenth of all products and services sold in the country by 2025.
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This article explains how Vietnam’s robust digital economy and booming e-commerce sector make it attractive for foreign investors to tap into it’s new business opportunities.
Vietnam: New E-Commerce Hotspot in Southeast Asia by 2026
According to a survey by Facebook and Bain & Company, Vietnam will be the fastest-growing e-commerce market in Southeast Asia by 2026, with e-commerce Gross Merchandise Value clocking USD 56 billion, 4.5 times the predicted value in 2021.
According to a report by Facebook and Bain & Company, Southeast Asia is a digital transformation leader in Asia-Pacific, with Vietnam being one of the best performers. By the end of 2021, the country had had 53 million digital customers, with 70% of Vietnam’s population having access to the internet and 53% of them using e-wallets for online payments.
In 2021, the number of products purchased by Vietnamese online consumers increased by 50% over 2020, while the number of online retailers increased by 40% year over year, resulting in a 1.5-fold rise in total online retail sales.
The Future of E-Commerce In Vietnam Looks Bright
Vietnam’s e-commerce sales reached USD 11.8 billion in 2020, up 18% from the previous year. Hence, many experts assert that the Vietnamese e-commerce market has grown quickly in Southeast Asia presenting new and exciting investment opportunities.
Since the outbreak of the pandemic, the demand for online transactions through e-commerce platforms has skyrocketed. After the pandemic is wholly under control, e-commerce will likely continue to grow, resulting in new consumption patterns which will define the way Vietnamese people do business and purchase goods.
In addition, Vietnam is focusing on the upliftment of the digital economy, intending to encourage information technology (IT) and digital transformation in the management, operation, and development of e-Government platforms.
The Ministry of Information Technology has recently made every effort to increase consumer trust in e-commerce, expand the capacity of e-commerce infrastructure systems and supporting services, encourage e-commerce in major export sectors, and develop e-commerce in localities.
How is Technology Shaping the E-commerce Market in Vietnam
Many analysts believe that Covid-19 has been the most important element in the growth of the e-commerce market in Vietnam. People’s buying patterns have altered as a result of the pandemic, resulting in an unprecedented expansion of the e-commerce sector in the country. This shows that Vietnamese consumers have increased their trust in the digitized commerce world and it’s here to stay.
And if anything’s more critical to this e-commerce expansion than the logistics system, it’s the technology that enhances the transportation system of the country. Vietnam has been a pioneer in adopting new e-commerce technology that many regional countries and others have yet to explore. For instance, goods delivery business in Vietnam can make use of a database system to figure out hot-selling products to aid sellers in the process of acquiring goods.
In Vietnam, two main technical aspects are employed in the transportation stage:
To begin with, Vietnamese customers who order things online anticipate them to arrive within a few days. As a result, delivery companies are under pressure to simplify their procedures to deliver items as quickly as possible. For that, the technology must aid shippers in estimating the kind of commodities they will receive quickly, load them into the truck, and then find the most efficient route to convey the goods.
Second, for deliveries to be made swiftly, Vietnam’s logistics firms have to increase their warehouse automation strategy. Indeed according to statistics, the market capitalization, globally, of warehouse automation is expected to reach approximately $70 billion by 2026, which signals that it will be a necessary aspect of all strategies within the logistics industry and if Vietnamese E-commerce firms are backed by this type of technology everyone will benefit.
Vietnamese technology businesses are dynamic and have strong execution capabilities, and the country’s individuals quickly adapt to new situations therefore it’s only a matter of time before Vietnam catches up with the rest of the developed world when it comes to E-commerce & related industries such as logistics.
How Can Cekindo Help?
Entering the e-commerce market in Vietnam can be a time-consuming process. Cekindo’s comprehensive business solution services will assist you with registering your company and ensure that you stay on top of all legal compliances. Following incorporation, we also provide HR and accounting services.