E-commerce is a market with numerous opportunities for businesses in Vietnam, recording an annual growth rate of 35 percent – one of the fastest rates in the world.
People shop at an electronic product store
The country’s e-commerce revenues reached 4 billion USD in 2016. At the current growth rate, it is set to hit 10 billion USD in 2020, accounting for 5 percent of total retail sales in Vietnam, according to the Ministry of Industry and Trade.
Experts said multichannel retail will continue to increase as domestic and foreign retail companies planning to invest big in this field.
A study conducted Nielsen, a market research and global information company, shows that Vietnam is one of the world’s most dynamic countries in hi-tech application and use, including online shopping.
Differences between traditional and multichannel shoppers will create opportunities for both producers and retailers.
Up to 82 percent of traditional shoppers buy goods according to their plans, making it hard for companies to attract new consumers. Meanwhile, 52 percent of multichannel shoppers compare different brands before buying an item.
As Vietnamese often travel by motorbikes, only 19 percent of consumers purchase goods in large volume. The figure is 44 percent among multichannel shoppers, according to Nielsen.
The vigorous growth of online retail has brought success to domestic enterprises such as the Mobile World Investment Corporation (MWG) and the Vietnam Dairy Products Joint Stock Company (Vinamilk).
MWG has invested strongly in online retail even though it has more than 1,390 stores in the chains of Thegioididong.com, Dien may xanh and Bach hoa xanh.
It earned more than 3.37 trillion VND (148 million USD) in revenues through online retail in 2016, a year-on-year surge of 104 percent. Earlier this year, the firm also opened vuivui.com, an e-commerce website with 80 percent of goods provided by itself.
Despite being successful offline, Vinamilk also opened Vinamilk eShop, an online retail channel, in late 2016 to sell dairy products.
Apart from domestic businesses, foreign firms like Aeon and Lotte, who have gained successes in the traditional retail model, recently also stepped up online retail.
Chairman of the Vietnam Internet Association Vu Hoang Lien said in spite of challenges caused by globalisation and technological development which facilitate cross-border online shopping, e-commerce in Vietnam is still a promising market for domestic enterprises.
They should make use of cloud computing to run profitable business on the internet. They also need to build websites suitable for their business, he said.
It is of utmost importance to ensure consistence in online and offline information to gain consumers’ trust, Vice Chairman of the Vietnam E-Commerce Association Nguyen Ngoc Dung said, adding that opaque business activities on the internet will hamper brand development.
He noted that businesses, both domestic and foreign, enjoy equal chances when doing online business. He suggested domestic retailers capitalise on their advantages and explore niche markets to expand activities.