A booming year for Vietnam’s e-commerce

E-commerce in Vietnam has continued its robust growth and was regarded as one of the pioneering sectors of the digital economy, contributing significantly to economic development, according to local insiders.

Online shopping boom: Changing consumer habits

Online shopping has become a consumer habit in Vietnam. Photo: Shopee

Black Friday, the biggest shopping event of the year, in 2023, no longer witnessed crowded queues at stores and large shopping centers. However, purchasing power did not decline, thanks to the explosion of online shopping. This trend has become a consumer habit due to the convenience it offers in trading and transactions.

As an avid online shopper, Doan Thi Thu Ha, a resident of Hanoi's Long Bien District, regularly visits e-commerce platforms and downloads supermarket apps to search for items.

"This Black Friday, I didn't have to cram into malls to shop. With just a few clicks on e-commerce platforms like Shopee, Lazada, Postmar, Sendo, or using supermarket apps, I can find my favorite items without wasting time in lines," she said.

To meet the demands of consumers, retail companies and supermarket chains have undergone strong transformations, introducing ordering through apps, Zalo, and websites with thousands of essential products, while aggressively offering daily promotions and discounts.

A representative of the Co.opmart supermarket chain in Hanoi said that over the past three years, Co.opmart's online sales revenue has grown by 10-15% annually. To achieve these results, the company has continuously improved its online sales management system to make it more comfortable for consumers to shop online.

According to Dang Anh Dung, deputy CEO of Lazada Vietnam, as many as 57 million Vietnamese shopped online in 2022, concentrated in the three largest cities of Hanoi, Ho Chi Minh City, and Danang. Among them, 43% of Gen Z users accessed shopping apps daily. The average number of product categories purchased by each person on Lazada increased from six to seven between 2021 and 2022.

At the same time, the e-commerce boom has encouraged many consumers to make cashless payments. Cashless payments are not only used to pay for services such as electricity, water, Internet, tuition, and hospital fees but are also becoming increasingly popular for everyday consumption, local insiders said.

Cashless payment methods, including bank transfers, QR code scanning, and electronic wallets such as Viettel Money, Mobile Money, and VN PAY, are used in most retail and service outlets, not just supermarkets and restaurants.

Vu Thi Minh Nguyet from Hoang Mai District, Hanoi, said that she can conveniently shop with her mobile phone. Utilizing electronic banking for merchant payments is highly convenient and beneficial for both parties due to its speed, security, and accuracy.

"That is why online shopping and cashless payments appeal to housewives like me," she said.

Nguyen Ngoc Quan, owner of a grocery store in Lang Ha Ward (Dong Da District, Hanoi), said that customers used to pay in cash. In recent years, most of them have switched to cashless payments. When making a purchase, customers now choose to swipe their ATM card or scan a QR code to pay.

Challenges remain: Fight against counterfeiting

Counterfeit products are seized by functional forces. Photo: Hoai Nam/ The Hanoi Times

 E-commerce continues to be a bright spot in the development of Vietnam's digital economy, with an estimated revenue of $20.5 billion in 2023, according to the Ministry of Industry and Trade.
In 2018, the country's e-commerce retail revenue was only about US$8 billion, but it surpassed US$10 billion in 2019 and increased to US$11.8 billion in 2020.

By 2022, this figure had grown by 20% year-on-year to $16.4 billion, accounting for 7.5% of the country's retail sales of goods and consumer services.

The report stated that the number of online shoppers exceeded 54.6 million, with the annual value of online shopping per person reaching nearly $270 million.

E-commerce platforms, including Shopee, Lazada, Tiki, and Tiktok Shop, have emerged, competing with each other to dominate the market. Additionally, many other emerging platforms, such as Sendo and Mobile World JSC, are intensifying the competition.

Along with the achievements, e-commerce also has its downsides, especially the risk of counterfeit and smuggled goods being sold on platforms and social media, while the authorities have not found effective remedies, according to the Ministry of Industry and Trade (MoIT).

Tran Huu Linh, director general of the MoIT's Market Surveillance Agency, stated that over the past two years, the convenience of e-commerce has prompted traditional businesses to reduce their physical presence on the street to align with consumer preferences.

He added, however, that in addition to convenience, buying and selling on e-commerce platforms pose challenges for regulators regarding quality control and inspection.

Linh suggested establishing a comprehensive network management, monitoring, and risk warning system to prevent and combat e-commerce fraud, with centralized coordination between central and local authorities.

He stressed that it is also necessary to strengthen investment in information technology infrastructure and human resources to effectively combat counterfeiting in e-commerce. This is crucial given the expansive and borderless nature of e-commerce and social media platforms.