Avoiding direct confrontation with big players such as Shopee, Tiki and Lazada, many startups in the e-commerce sector are trying to conquer niche markets.
2018 was the year which witnessed the boom of Vietnam’s e-commerce. Around 85 percent of the Vietnamese population uses the internet.
The e-commerce market had estimated value of $8 billion, up by 30 percent compared with 2017.
The high growth rate allowed Vietnam to jump into the top 6 biggest e-commerce markets in the world, just after China, the US, UK, Japan and Germany.
The figures show that the market has become big enough to divide and form different market segments.
Analysts said in the current context of stiff competition with four leading marketplaces (Shopee, Tiki, Lazada and The Gioi Di Dong), targeting niche market segments is the way being followed by many startups.
Investors, for example, can develop marketplaces specializing in distributing interior furnishings. The websites can utilize augmented reality technology to help customers visualize products before they buy.
In addition to applying augmented reality technology, businesses can also join hands with other parties to develop their websites in a deeper way. They can cooperate with real estate developers to display 3D designs on e-commerce platforms to help buyers test the products before buying.
|In addition to applying augmented reality technology, businesses can also join hands with other parties to develop their websites in a deeper way. They can cooperate with real estate developers to display 3D designs on e-commerce platforms to help buyers test the products before buying.|
Analysts said technologies bring competitiveness to businesses, not sale promotion programs or price cuts.
According to Nguyen Dai Hai, CEO of Fit In, 3D display plays a very important role. The use of augmented reality technology shortens the time people need to learn about products and services.
The list of 50 leading e-commerce websites in Vietnam shows that 80 percent of them sell certain specialized products, including branded goods and imported cosmetics.
For marketplaces which sell general goods, the revenue growth comes from the increase in number of orders. As for marketplaces which target niche markets, they can sell many associated services to both individual and institutional clients.
Interior furnishings websites, for example, can sell furniture consultancy services as well, while used branded goods websites can provide examination services. Some websites have revenue from associated services that is even higher than from retail.
“The sellers of used branded goods need a unit that examines their products. Meanwhile, branded-goods buyers, who feel insecure about products, also want to use inspection services,” said Ta Xuan Hien, CEO of Joolux.
However, niche e-commerce platforms have to face the challenge of how to compete in convenience when consumers are inclined to buy all they need on one platform. This is what big e-commerce businesses are doing well.
Growing demand from e-commerce users is putting pressure on existing supply chains, facilities and warehouses.
Online buyers in Vietnam are increasingly impatient, driving the war on delivery speed.