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E-commerce in Vietnam to reach $10 billion in 2022
The Hanoitimes – With a projected growth rate of 25 percent yearly, Vietnam’s e-commerce market is expected to double to US$10 billion in the next four years.
According to the Vietnam E-commerce Association, the e-commerce market surged by 25 percent last year to reach $5 billion and the annual growth rate can be maintained for 2018-2022.
With the online retail segment, reports from thousands of e-commerce websites showed that their revenue soared by 35 percent last year. The rising rate for delivery companies was even much more impressive at 62-200 percent.
The National Payment Corporation of Vietnam also reported that the number of transactions using domestic card for online payment last year surged by some 50 percent against 2016 while the value of the transactions accelerated by up to 75 percent.
Industry insiders said that the e-commerce market has taken off in Vietnam thanks to booming internet usage and smartphone ownership, along with massive investments from key retail players.
The number of Vietnamese businesses capable of taking advantage of the internet and technology has grown 2.1 times faster than those with less use of the internet.
Small- and medium-sized enterprises (SMEs) that spend more than 30 percent of their budget on technological innovation are growing nine times faster than those spending less than 10 percent of their budget.
However, e-commerce has faced several barriers deterring its sustainable development, including low consumer trust in products and services, and worries over online payment security.
In addition, most Vietnamese e-commerce websites provide only basic services, such as information about products and modes of payment. Services such as digital marketing optimization and connecting online with offline sales need to be added.
Logistics is expected to be a game changer for the Vietnamese e-commerce market in 2018 as new entrants are coming in, and existing operators are expanding to improve their delivery services.
According to Kantar Worldpanel, a global expert in shoppers’ behavior, the percentage of e-commerce shoppers grew from 5.4 percent to 8.8 percent in the largest four cities last year alone.
In light of this trend, many foreign logistics providers and e-commerce operators are making efforts not to miss an opportunity to provide e-logistics and meet the rapidly growing demand.
As e-commerce is growing at a robust pace, logistics providers have to come up with new business models to deal with a soaring number of frequent and small-size orders. They are investing in technology and infrastructure to counter the challenges from traffic congestion to failed deliveries, as well as the higher logistical costs in rural areas.
These dynamics will fuel some of 2018’s most important trends including customer collection points, designed for customers to receive an order from a designated collection point. Such collection points allow customers to pick up their orders at any time, without being required to wait at home.
DHL eCommerce launched a nationwide network of service points in Vietnam last November, with a plan to expand up to over 1,000 outlets by the end of next year.
Giao Hang Nhanh Company (GHN) also plans to increase its network of customer collection points in local shops, convenience stores and buildings to 1,500 outlets by the end of 2018.
In the third quarter of 2017, Lazada launched its first automated sorting centre in HCM City, with its second centre was opened in the first quarter of 2018 in Hanoi. Lazada will also upgrade its existing sorting centre next year, tripling its sorting capacity.
The National Payment Corporation of Vietnam also reported that the number of transactions using domestic card for online payment last year surged by some 50 percent against 2016 while the value of the transactions accelerated by up to 75 percent.
Industry insiders said that the e-commerce market has taken off in Vietnam thanks to booming internet usage and smartphone ownership, along with massive investments from key retail players.
The number of Vietnamese businesses capable of taking advantage of the internet and technology has grown 2.1 times faster than those with less use of the internet.
Small- and medium-sized enterprises (SMEs) that spend more than 30 percent of their budget on technological innovation are growing nine times faster than those spending less than 10 percent of their budget.
However, e-commerce has faced several barriers deterring its sustainable development, including low consumer trust in products and services, and worries over online payment security.
In addition, most Vietnamese e-commerce websites provide only basic services, such as information about products and modes of payment. Services such as digital marketing optimization and connecting online with offline sales need to be added.
Logistics is expected to be a game changer for the Vietnamese e-commerce market in 2018 as new entrants are coming in, and existing operators are expanding to improve their delivery services.
According to Kantar Worldpanel, a global expert in shoppers’ behavior, the percentage of e-commerce shoppers grew from 5.4 percent to 8.8 percent in the largest four cities last year alone.
In light of this trend, many foreign logistics providers and e-commerce operators are making efforts not to miss an opportunity to provide e-logistics and meet the rapidly growing demand.
As e-commerce is growing at a robust pace, logistics providers have to come up with new business models to deal with a soaring number of frequent and small-size orders. They are investing in technology and infrastructure to counter the challenges from traffic congestion to failed deliveries, as well as the higher logistical costs in rural areas.
These dynamics will fuel some of 2018’s most important trends including customer collection points, designed for customers to receive an order from a designated collection point. Such collection points allow customers to pick up their orders at any time, without being required to wait at home.
DHL eCommerce launched a nationwide network of service points in Vietnam last November, with a plan to expand up to over 1,000 outlets by the end of next year.
Giao Hang Nhanh Company (GHN) also plans to increase its network of customer collection points in local shops, convenience stores and buildings to 1,500 outlets by the end of 2018.
In the third quarter of 2017, Lazada launched its first automated sorting centre in HCM City, with its second centre was opened in the first quarter of 2018 in Hanoi. Lazada will also upgrade its existing sorting centre next year, tripling its sorting capacity.
Source: http://www.hanoitimes.vn/economy/2018/04/81E0C4A3/e-commerce-in-vietnam-to-reach-10-billion-in-2022/