With a gross merchandise value (GMV) of $22 billion in 2024 (according to Google, Temasek, and Bain & Company) and a projected annual compound growth rate (CAGR) of 28 percent from 2025 to 2033 (according to IMARC), Vietnam’s e-commerce sector has become integral to the digital economy.

The market is heavily dominated by two leading platforms: Shopee (65 percent of GMV market share) and TikTok Shop (28 percent), according to Momentum Works. 

The organization estimates the total GMV of four major e-commerce platforms, namely Shopee, Lazada, TikTok Shop, and Tiki, in Vietnam reached $16 billion in 2024.

E-commerce platforms have introduced new technology and consumer patterns. However, as their influence grows, their business models now control the entire value chain, thus reshaping relationships with local logistics firms.

Initially equal partners, Vietnamese logistics companies are increasingly inferior in the market, becoming dependent entities in a market lacking fair competition.

Closed algorithms of e-commerce platforms

Previously, e-commerce platforms and logistics firms operated symbiotically, with delivery companies playing a crucial role in fulfilling orders and scaling operations.

Now, to solidify their dominance, foreign platforms are building closed ecosystems where key support services such as logistics and payment are tightly integrated and controlled. While this offers user convenience, it creates significant barriers for businesses outside these ecosystems.

The clearest mechanism is the restriction on users and sellers freely choosing delivery providers. This, analysts say, optimizes processes and end-to-end quality control, but it changes independent logistics firms from proactive partners to service providers dependent on platform coordination.

Closed algorithms automatically assign orders to in-house or strategic partner logistics units. With the natural advantage of abundant order volume from their parent platforms, in-house delivery units of the platforms have quickly risen. Meanwhile, Vietnamese logistics companies are losing the opportunity to directly access customers.

Additionally, capital-driven competition through subsidies and free shipping programs is prevalent. Logistics experts warn that, if unchecked, such practices could eliminate other delivery firms, especially small and medium enterprises, fostering market monopolies.

When money and data flow in one direction

The consequences of this model go beyond creating a lack of competition in the logistics business environment. At a broader level, it leads to a shift in key economic resources.

When a foreign ecosystem holds a monopoly, profits generated across the entire value chain, from platform commissions and payment fees to shipping charges, will flow out of Vietnam instead of being reinvested to support the growth of domestic businesses.

Data flow is even more important than cash flow. Controlling the entire transaction chain, from order placement to delivery, allows foreign platforms to amass a “goldmine” of data on consumer behavior, supply chains, and market trends.

If the data is controlled by some foreign entities, Vietnamese firms will be put at a long-term disadvantage, losing the ability to understand and respond to their own market.

These e-commerce challenges are not unique to Vietnam. Globally, regulators have taken notable actions.

In Indonesia, in May 2024, the Competition Commission investigated Shopee and Shopee Express over allegations of monopolistic delivery practices. In Italy, the Competition Authority (ICA) fined Amazon 1.2 billion euros in 2021 for abusing market dominance, unfairly favoring sellers using Amazon’s logistics service (FBA).

In China, the State Administration for Market Regulation fined Alibaba 18.288 billion yuan for prohibiting sellers from opening stalls on rival platforms.

These cases reflect a global trend of regulatory intervention to ensure fair competition as digital platforms grow.

The state’s role as referee, legal shield

Experts emphasize that, in this uneven competition, the state’s role as a “referee” in creating a fair business environment is crucial. The draft E-Commerce Law, currently under revision, is seen as a vital legal shield for healthy market growth.

The draft proposes that large digital platforms managing intermediary e-commerce platforms “must not mandate sellers or buyers to use a specific payment or logistics provider without justifiable reason”.

This rule aims to ensure the right of choosing service providers for sellers and buyers. However, experts warned that platforms could exploit loopholes by limiting options to two providers instead of allowing full consumer choice.

Another draft provision requires e-commerce logistics providers to “have mechanisms to verify information, documents, and records accompanying goods before transport, and refuse to transport prohibited, counterfeit, or unclear-origin goods or those violating other legal regulations”.

Thai Khang