At knok-studios.com, our agency has provided extensive support to numerous businesses within the e-commerce sector, which has seen remarkable growth in Vietnam over the past decades.
The data we’ve collected indicate that this growth is set to continue.
1. The Fastest E-commerce Growth in Southeast Asia
In 2023, Vietnam was recognized among the top 10 countries globally for e-commerce growth, leading Southeast Asia in online shopping expansion. According to data from Metric.vn, the revenue generated by the B2C e-commerce market in Vietnam increased by an impressive 25%, surpassing the 19.6% growth observed in 2022.
Projections for 2024 indicate strong growth, building upon the remarkable performance of 2023.
What can explain this growth of E-Commerce in Vietnam?
This surge has been facilitated by the increased digitalization of Vietnamese society, accelerated by COVID-19, which has made online ordering and delivery particularly accessible in urban areas.
Additionally, there has been a boost in confidence towards vendors and platforms for cross-border ordering, especially for goods from Korea and China, playing a crucial role in this trend.
It’s important to note that despite this impressive growth, there is significant geographic disparity, with the majority of the expansion concentrated in the urban hubs of Ho Chi Minh City and Hanoi.
2. Consumer Preferences
What exactly are Vietnamese consumers purchasing online?
Based on the Metric report on E-commerce in 2023, we’ve identified several notable trends:
- Low- to medium-priced items dominate the market: Consumers show a preference for products priced between VND 10,000 and VND 350,000 (approximately $0.40 to $15), indicating a strong market for affordable goods.
- Ladies first: The sectors of beauty, home, and lifestyle, and women’s fashion have long been the pillars of e-commerce, a trend that persists. This is largely due to the overrepresentation of women, particularly those aged 25 to 35, among online shoppers.
- E-commerce is expanding into new territories: In 2023, the sports and travel segments experienced the highest sales growth rate, at 92.1%, showcasing the dynamic nature of consumer interests.
- Consumer trust on the rise: There is a noticeable shift towards purchasing high-value items online, such as home appliances, phones, and tablets, which were traditionally bought in physical stores.
- Prices matter: When shopping online, Vietnamese consumers are not just seeking product variety; they’re also looking for value. This is evident in the high demand for product bundles and the popularity of payment options like Buy Now and Pay Later.
3. A Sector Dominated by The Big 5
The Vietnamese e-commerce landscape is currently led by five major platforms: Shopee, Lazada, Tiki, TikTok Shop, and Sendo.
For those not familiar with the Asian e-commerce scene, it’s important to note that these sites don’t typically sell their own products. Instead, they serve as hubs that allow independent businesses to establish their online storefronts within the platforms.
In 2023, these ‘Big 5’ platforms collectively delivered an impressive total of 2.2 billion products. Their revenue soared to VND 232.13 trillion ($9.52 billion) during this period, marking a 53.4% increase from 2022.
These platforms are the pivotal forces propelling Vietnamese e-commerce forward. Not only have they experienced remarkable growth, but they have also seen a significant increase in market share. Their stake rose from 31.4% in 2021 to 46.5% in 2023.
This upward trajectory is expected to continue, with revenue projections set to exceed VND 310 trillion ($12.72 billion) in 2024, which would represent a 35% growth from 2023.
4. E-commerce: A Challenging Market for SMEs
This overall trend reflects a rapid shift in the habits of SMEs (Small and Medium-sized Enterprises), which are increasingly adopting a Direct-to-Consumer (DTC) sales model over traditional retail channels.
This trend is largely motivated by the potential for higher profit margins. By establishing storefronts on platforms like Shopee, businesses aim to reduce the 35%-40% cut typically taken by distributors to the much lower platform fees, which range between 2.5% to 4%.
However, the transition is not without its challenges.
It’s estimated that around 100,000 vendors left these platforms just last year. While this departure was balanced out by new sellers joining, it underscores the complexity of moving from traditional retail to e-commerce.
Analysts predict that the online marketplace will continue to experience intense price competition in the coming years.
5. Marketing digital et IA dans l’e-commerce
In the increasingly competitive landscape of e-commerce, companies cannot afford to overlook the importance of a clear digital marketing strategy.
This could include:
- Developing their own website alongside a robust SEO strategy. As it becomes more challenging to stand out within the search results of online marketplaces, due to their evolving rules and policies, having an independent e-commerce site optimized for search engines is a vital way to reduce dependency on these platforms.
- Mastering data analysis and AI tools for running profitable advertising campaigns on Google, Facebook, or TikTok. These platforms, especially Facebook, offer increasingly sophisticated tools that enable businesses to target their potential customers with remarkable precision using AI. Companies that efficiently manage Search Engine Marketing (SEM) and Pay-Per-Click (PPC) campaigns can achieve significant gains.
- Branding (the end goal): Building a genuine brand remains the ultimate strategy for long-term success in the digital world.
At knok-studios.com, we are equipped to support companies across these critical areas. If you’re seeking expert assistance to propel your e-commerce business forward, contact us.
