VietNamNet Bridge - The revenue from e-commerce only accounts for 2.8 percent of total revenue of Vietnam’s retail industry, but state management agencies say they want to see the figure rise to 5 percent by 2020.

Nga, the owner of a fashion shop on Thanh Cong street in Hanoi, has decided to shut down the shop after 10 years of running it. But Nga won’t give up the business. She will continue selling fashion goods, but at home and on Facebook, because the online sale method allows her to save money on retail premises.

“The demand for online shopping is very big, especially from busy office workers,” she said.

She closed the shop and gave back the retail premises to the landlord because she cannot afford the high rent. However, she thinks she will open a new shop again when she saves enough money. By that time, she will sell goods both online and offline to optimize profits.

Nga is one of thousands of private traders in urban areas of Vietnam who have been trying to boost sales through different channels. They are contribyting to the plan of obtaining $10 billion through e-commerce set by the Ministry of Industry and Trade.

According to Deputy Minister of Industry and Trade Ho Thi Kim Thoa, the 2015 Online Friday attracted 2,000 businesses. One year later, the event attracted 3,000 business. 

Nguyen Thanh Hung, chair of the Vietnam E-commerce Association, also commented that though Vietnam’s e-commerce has been developing rapidly (over 20 percent) in the last 10 years, the market scale and transactions are small. Though the sales at Online Friday 2016 were double the year before, the figures were too small compared with other regional countries.

He cited an official report as saying that the retail industry has been growing steadily by 10 percent per annum in the last 10 years, while revenue from traditional sales accounts for 80 percent and modern sales by 20 percent of total revenue, or 2.8 percent, a modest proportion compared with 12.8 percent in Asia.

Dinh Thi My Loan, chair of the Vietnam Retailers’ Association, commented that retailers should understand they now live in the internet era where new technology trends cause big changes to the retail industry and have impacts on buyers’ habits.

She went on to say that with the number of smart phone users on the rise, shopping via internet will become more and more popular in Vietnam. Therefore, retailers need to diversify their sale channels by integrating online payment into online retail. This will help businesses increase their revenue and improve their competitiveness.

Chi Mai