YCP Solidiance's "Top E-commerce Cities in Asia" white paper sheds light on the significance of the e-commerce landscape in Asia.
Ho Chi Minh City is one of the top e-commerce cities in the region, along with Singapore, Hong Kong, Kuala Lumpur, and others, according to the latest report from YCP Solidiance, an Asia-focused strategy consulting firm headquartered in Hong Kong.
Its “Top E-commerce Cities in Asia” white paper aims to shed light on the significance of the e-commerce landscape in Asia and how it has quickly adapted to global trends.
An “e-commerce city” is referred to an urban city with interconnected infrastructure that makes up an e-commerce ecosystem that helps it thrive.
The e-commerce industry has continued to witness exponential growth around the world, with an astonishing $2.86 trillion in 2018, and is estimated to grow further to $6 trillion in 2022.
The not-to-be-missed Asia-Pacific market saw 35 per cent economic growth in 2018, with $1.8 trillion in retail e-commerce sales; positioning it as a clear leader to achieve one-quarter of global e-commerce share by 2023.
Despite the opportunities in e-commerce development, Ho Chi Minh City still faces challenges due to an immature market and developing infrastructure.
The lack of trust towards financial institutions is one of the hindrances, making cash-on-delivery a much-preferred payment option compared to credit cards or online banking.
On top of that, its underdeveloped infrastructure has pushed up the cost of logistics, which could potentially slow the growth of e-commerce expansion in the city.
With increasing demand for technological innovation across the globe, Ho Chi Minh City undeniably has a promising future for Industry 4.0, with e-commerce being one of the closely-watched industries.
As home to nearly 9 million people, the city’s market is adapting at a fast pace towards digitalization, measured by a high internet penetration rate and digital banking penetration rate.
In addition to the high level of technology adoption, the acceleration of the e-commerce industry is clear and opportunities for the retail market are vast.
Although the current regulatory landscape had shown disadvantages, the rapid growth of e-commerce in Ho Chi Minh City has also been supported by the government through its future masterplan in developing the industry, which comprises a comprehensive legal framework for all e-commerce activities, a national e-commerce payment system, and integrated e-payment solutions due by 2020.
The city has also witnessed a growing middle to affluent class - the key target for expanding the market. Ho Chi Minh City and other global cities can improve their e-commerce ecosystem through the framework recommended in the white paper, which provides five key building blocks for a startup ecosystem to reach its full potential, including a stable and predictable regulatory environment; adequate talent; market readiness and robust infrastructure; funding to scale up the business; and a global culture to empower innovative ideas.
VN Economic Times