VN E-commerce well placed to meet growth targets

VN E-commerce well placed to meet growth targets

E-commerce is no longer an option that Vietnamese enterprises can ignore.

Last year, e-commerce revenues increased to $5 billion, accounting for about three per cent of the total retail trade and services revenue.

It has become an indispensable extension for businesses as a rapidly growing country with growing Internet connectivity deepens its global integration process.

The development of multi-channel businesses that combines physical stores with an online presence has become an inevitable trend.

Viet Nam has a gross domestic product (GDP) growth rate of more than six per cent per year. Internet connectivity is growing by 50 per cent plus every year. Online marketing revenues in the country increased from US$26 million to nearly $330 million in the 2010-2015 period.

It is not surprising that with these advantages, the nation’s e-commerce market has witnessed the entrance of large players in the last few years.

The Vingroup officially stepped into e-commerce in 2015 with its Adayroi trading floor. Earlier, several savvy entrepreneurs had launched online shopping websites that became popular, like sendo.vn, nguyenkim.com, tiki.vn, zalora.vn and lazada.vn.

The South Korean Lotte Group also entered e-commerce market in Viet Nam last year with its lotte.vn website. It was followed soon by Japan’s largest retailer Aeon, which launched aeoneshop.com at the beginning of this month.

Given their brand prominence and their large story systems, aeoneshop.com and lotte.vn are expected to offer stiff competition to sites like lazada.vn and tiki.vn that currently dominate the domestic market.

Tran Trong Tuyen, general secretary of the Viet Nam E-commerce Association, told the Hai Quan (Customs) online newspaper recently that in the past, it was important for businesses to open their stores at a good location, but the situation has changed with 40 million Internet users having the option to buy things online.

“If retail companies do not invest properly in e-commerce, they will gradually lose customers,” Tuyen said.

The newspaper also quoted Trinh Van Hoa, director of the Nguyen Kim E-commerce Centre, as saying that the centre studied customer’s shopping habits and understood that they were looking for multi-business shopping facilities.

Its focus on providing the most convenient shopping solutions for customers has seen the company grow rapidly in recent years, she said.

The growth of the company, accordingly, also increased several times compared to the previous years, she said.

Impressive figures

E-commerce revenues in Viet Nam reached $4.07 billion in 2015, a 37 per cent year-on-year increase. It also accounted for about 2.8 per cent of total retail trade and services revenue.

Last year, e-commerce revenues increased to $5 billion, accounting for about three per cent of the total retail trade and services revenue.

The popularity of Online Friday, a mega sales event held every December, has soared, with last year’s sales of VND664 billion, triple that of the previous year.

These figures show that the nation is well placed to meet its e-commerce targets. The 2016-2020 e-commerce master plan envisages $10 billion in business-to-consumner (B2C) turnover by 2020, accounting for five per cent the country’s total retail sales.

Despite the rapid growth and enormous potential, the e-commerce market share of Vietnamese enterprises was still modest, Tuyen remarked.

He said that even though famous names like Tiki and Sendo had millions of users and tens of thousands of orders per day, they were limited to the national scale, and although e-commerce revenue in 2015 was five times that of 2012, the Vietnamese market, had yet to match world leaders.

In the US, e-commerce transactions accounted for five per cent of total retail sales, and it was 9-10 per cent in China, and about three per cent in Viet Nam.

Shopping trends

Market research firm Nielsen recently released the results of an online survey covering 63 countries

It found more than six out of ten (64 per cent) Vietnamese consumers purchased fashion products online.

More than half the Vietnamese respondents said they purchased books, music and stationery products (51 per cent) and 47 per cent said they bought travel products or services online.

Four in 10 respondents (40 per cent) said they purchased personal-care and beauty products online.

About one-fourth (26 per cent) said they placed online orders for babies and infants; an equal number ordered meal-kits or restaurant deliveries and one-fifth ordered packaged groceries online.

VNS

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