Fighting for $52 billion market, int’l groups flock to Vietnam

Despite the effects of the Covid-19 pandemic, the e-commerce industry still witnessed explosive growth in 2020.

Fighting for $52 billion market, int’l groups flock to Vietnam

In the recent campaign to sell Bac Giang province’s lychee on e-commerce platforms, the system recorded 300,000 - 400,000 buyers and 4.6 million visits to learn about products on the Postmart and Voso platforms within a short time. These two platforms had 36,000 - 37,000 orders daily.

Minister of Information and Communications Nguyen Manh Hung said: "From 100,000 people shopping on e-commerce floors in the first six years, the number has reached 6 million within a month, or 100 times, and technology and infrastructure are available, without the need of upgrading. The investment was not large, only a few billion VND. That is an extremely effective investment."

These figures show the great potential of e-commerce in Vietnam, which can be one of the important driving forces of the economy.

Pandemic hit

Despite the effects of the Covid-19 pandemic, the e-commerce industry still witnessed explosive growth in 2020.

According to the Department of E-commerce and Digital Economy of the Ministry of Industry and Trade, the Vietnam online shopping day 2020 recorded over 113 million views and consumer interactions and 3.7 million orders made within 60 hours, up 267% year-on-year.

Many businesses have exploited online platforms and promoted e-commerce as one of the solutions to deal with the pandemic. According to the Vietnam E-commerce Index 2021 of the Vietnam E-commerce Association (VECOM), the average growth rate of e-commerce in the period 2016-2019 was about 30%. The scale of the e-commerce market increased from $4 billion in 2015 to about $11.5 billion in 2019.

VECOM also cited the Southeast Asia e-commerce 2020 report of Google, Temasek and Bain & Company as saying that Vietnam’s e-commerce in 2020 increased by 16% and reached over $14 billion.

Specifically, online retailing of goods grew by 46%, ride-hailing and food delivery increased by 34%, and online marketing, entertainment and games rose by 18%, but online travel decreased by 28%.

This report predicts an average growth rate of 29% in the period 2020-2025, and by 2025, Vietnam’s e-commerce market is set to reach $52 billion.

According to GlobalData's E-Commerce Analytics, with the current growth rate of approximately 18%, the market size is expected to reach $26.1 billion by 2024.

Race of the big players

The Vietnamese e-commerce market is now the playing field of four names: Shopee, Sendo, Tiki and Lazada. According to a report by Iprice, Shopee Vietnam had more than 68.5 million visits on average in the last three months of 2020. Shopee became the e-commerce platform with the highest number of visits, increasing by more than 30.6 million over the same period last year.

Shopee is closely followed by Tiki and Lazada Vietnam, with 22.2 and 20.8 million visits in the last three months of 2020, respectively. Meanwhile, Sendo ranked 6th with 11.2 million visits.

The bright spot in Vietnam's e-commerce map is Mobile World, which has ranked 2nd since the beginning of the year and became the domestic player with the highest average number of visits nationwide in the fourth quarter - 31.4 million.

Dien May Xanh retail chain won 5th place with 16.3 million visits. The increasing demand for electronic products and smartphones at the end of the year was a good opportunity for Mobile World to make a breakthrough in the period before the Tet holiday.

The failure of many names in this field such as Leflair, Vuivui.vn (MWG), Lotte.vn, Adayroi.com (Vingroup), and Robins.vn (Central Group) shows that the game is not easy.

Unlike the previous period, investors on e-commerce platforms have no longer been pouring money on promotions but instead brand recognition with their own "identities".

Mohit Agrawal, Director of Consumer Behavior Insights (Nielsen Vietnam), said that Vietnamese people are spending more time online and shopping online. This creates a great opportunity for businesses to step up their digital media strategy and make a stronger footprint in the online market.

Duy Anh

 
Litchis sell well on e-commerce sites

Litchis sell well on e-commerce sites

Nguyen Van Lan’s 2-hectare litchi orchard in Luc Ngan district in Bac Giang province is ready for harvest. However, he still doesn’t know what to do to sell all the 40-50 tons of litchis amid the Covid-19 outbreak.

VN e-commerce platforms may lose home ground

VN e-commerce platforms may lose home ground

Vietnamese businesses need to prepare and move ahead to win the e-commerce race.

 
 

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