Vietnam’s e-commerce market may rank third in Southeast Asia

Vietnam could have Southeast Asian's third-largest e-commerce market by 2025.

Vietnam could have Southeast Asian’s third-largest-e-commerce market by 2050 (photo:VNA)

The country could sit behind only Indonesia at 100 billion USD and Thailand at 43 billion USD.

According to the E-Business Index 2019 report drafted by the Vietnam E-Commerce Association, the scale of Vietnam's e-commerce market in 2018 was 9 billion USD. The report also forecast the compound average growth rate (CAGR) of 2015-2018 period was 25 percent and the market would reach 33 billion USD in 2025.

The report, developed since 2012, shows most e-commerce activities take place in the two largest cities of the country, Hanoi and Ho Chi Minh City and nearby provinces such as Bac Ninh, Vinh Phuc, Dong Nai and Binh Duong, as well as municipalities like Hai Phong, Da Nang and Can Tho.

According to Nguyen Thanh Hung, chairman of the Vietnam e-Commerce Association, online business activities in most other provinces are weak and there is a risk of falling behind compared to the two leading cities.

Hanoi and HCM City accounted for 70 percent of e-commerce transactions. E-commerce scale in other localities, especially in rural and remote areas, is very small, the report said.

Meanwhile, about 70 percent of the population live in rural areas. The countryside has great potential for consumption and also supplies various products suitable for online sales.

Hung said it is necessary to narrow the digital pide between localities, especially to help rural areas sell online in order for e-commerce to develop via synchronous policies and solutions to turn e-commerce opportunities into reality.

In addition to helping local consumers benefit from online shopping, the key factor is to support small and medium enterprises and households in rural areas to sell goods and provide services online, he said.

According to a report by Nielsen and Demand Institute, in the current digital economy, the income level of the middle class is not enough to identify potential consumers able to influence the global economy.

According to Tran Trong Tuyen, CEO of Sapo Technology JSC, social networks have a prominent role in connecting consumers with each other and with sellers and greatly influence marketing, customer relations, human resources and research and development (R&D).

In Vietnam, social networks support activities that provide information about sellers, products and services, advertising, product marketing and customer care. Many inpiduals and households have started selling goods and services through social networks, he said.

A survey of Sapo in 2017 for 1,000 retail stores that had used Sapo sales management application showed Facebook was the second-most effective sales channel after the direct sales channel at the store.

( VNF/VNA )