The E-Commerce industry in Vietnam continues to flourish in 2022 due to increasing foreign investment, a favorable regulatory environment, and improved internet connectivity. About one-tenth of all goods and service sales are expected to be online by 2025. With a thriving digital economy and e-commerce industry, Vietnam is an ideal location for tapping into new business opportunities. The internet economy has surpassed USD 21 billion, demonstrating the resilience of both the government and the economy.
According to Goldman Sachs and JD.com, Ho Chi Minh City and Hanoi could account for 55% of online purchases made within Vietnam by 2025, and the digital economy could be worth USD 220 billion by 2030.
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An Outlook on Vietnam’s E-commerce Growth
Vietnam’s digital revolution increased online commerce and entertainment demands in 2021 as a result of the pandemic, and subsequent lockdowns. A massive 54% increase in e-commerce sales in Vietnam was recorded during 2020, which is speculated to exceed the contemporary share of sales in 2028 due to increased penetration and transaction volumes.
After recovering from the pandemic, the prevalence of new work-from-home policies allowed by companies has also given a significant boost to the e-commerce sector. The growth of e-commerce has also led to the expansion and entry of new businesses and a rise in demand for e-commerce delivery services.
E-wallets have flourished recently as cash-on-delivery declines. Moreover, mobile payments are gradually replacing cash across all spectrums of commerce in the country. Online education platforms, though in their infancy, have also benefited from this shift and are expected to grow exponentially.
In 2020, Vietnam had an e-commerce sales volume of USD 11.8 billion, making it the only Southeast Asian nation to record double-digit sales growth during Covid-19, also an attractive investment prospect.
Major E-commerce Trends in 2022
E-commerce is expected to grow and bolster the economy in 2022. By developing new business strategies and addressing modern distribution channels, companies have the opportunity to expand their markets.
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Major Vietnamese e-commerce sites have expanded their offerings to include games and live streams. Consumers began to use online platforms to fulfill both necessary daily demands and amusement needs during the social distancing period. To strengthen connections with consumers, e-commerce applications must incorporate a variety of interactive components, including games and live streams.
Reasons to Invest in Vietnam’s E-commerce Industry
As reported by the Ministry of Information and Communications (MIC), the country’s digital economy revenue clocked USD 53 billion in the first quarter of 2022, according to Opengovasia. During the same period, 73.2% of Vietnamese users had access to the Internet.
Vietnam’s e-commerce industry is expected to generate a revenue of USD 14.81 billion in 2022. Moreover, it is forecasted to demonstrate a growth rate of 16.98% (CAGR 2022-2025). This is expected to result in a market volume of USD 23.71 billion by 2025.
In the same period, the number of users using the e-commerce platform are expected to reach 70.9 million whereas the user penetration rate is expected to hit 70.1%, according to data from statistica.
Top 5 e-commerce companies in Vietnam
1. Shopee
With its presence in seven countries comprising Vietnam, the Philippines, Thailand, Indonesia, Malaysia, Brazil, and Taiwan, Shopee is a leading e-commerce platform. An easy interface and better promotional campaigns helped bring in approximately USD 68.5 million visitors per month to this e-commerce as of February 2021 (data from iPrice Group).
2. Mobile World Group (thegioididong.com)
Founded in March 2004, Mobile World Joint Stock Company owns one of the largest electronic sales platforms in the country: thegioididong.com. During 2020, Mobile World Group (MWG) held a market share of about 50% for the mobile device segment of Vietnam’s retail market, making it the country’s largest company in this domain. It was also one of the top 100 retailers in Asia – Pacific. Mobile World’s e-commerce platform receives 31.4 million visitors per month, making it the second largest e-commerce platform in Vietnam.
3. Tiki
Founded in March 2010, Tiki is one of the biggest 100% Vietnamese e-commerce sites in Vietnam, Shoppee being Singaporean and Lazada being Chinese. With TikiNow, customers can place orders and receive them in 2 hours. With over 500,000 products from over 6,500 brands, Tiki’s e-commerce platform meets the diverse needs of customers.
Nearly 22.2 million people visit the website each month (compared to more than 30 million last year), ranked 4th on iOS and Android app downloads.
4. Lazada
Lazada is one of the largest e-commerce trading platforms in Vietnam. It offers a variety of products, including furniture, phones, tablets, fashion, accessories, beauty, health care, toys, and sporting goods. Alibaba, a multinational e-commerce company, owns Lazada Vietnam as well as its branches in Thailand, Indonesia, Singapore, the Philippines, and Malaysia. A total of 20.8 million visitors visit Lazada’s website every month.
5. Sendo
In September 2012, Sendo became the first online e-commerce platform in Vietnam. A wide delivery system is currently available across the provinces and cities of Vietnam. Among Vietnam’s leading e-commerce platforms, Sendo receives about 11 million monthly visits.
Conclusion
According to Google’s report on Vietnam, in the first half of 2021, Vietnam recorded 8 million new digital consumers, 55% of whom lived outside of metro areas. Consumers are settling into a new way of life after the pandemic started. For 2022, 60% of surveyed consumers will maintain their e-commerce spending while 30% will spend even more than they did in 2021.
Consequently, most internet sectors continued to grow strongly. By 2021, Vietnam’s Gross Merchandise Value (GMV) reached USD 21 billion, a 31% Year on Year (YoY) increase. A compound annual growth rate (CAGR) of 29% is expected to reach USD 57 billion in value by 2025.
With 14 free trade agreements (FTAs) between Vietnam and other ASEAN countries, Vietnam offers one of the most favorable regulatory environments for starting an e-commerce business.
The Vietnamese government is committed to the digital transformation of the economy, so foreign investment in this sector can also support the sector’s growth.
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