Business
Fierce competition in Vietnam's E-commerce market by the end of 2017
According to Vietnam E-Commerce and Information Technology Agency, in 2013 the number of accounts registered by companies was 1,923, in 2016, this number has increased 10 folds to 19,456. The number of accounts registered by individual also increased from 305 to 7,170.
In discussion at National Assembly on November 1 with regard to socio-economic and state budget, the Deputy Prime Minister Trinh Dinh Dung stressed, in order to achieve the target growth rate of 6.7%, the government has been putting up effort in restructuring the economy in relation to appropriate growth model in fields, sectors and suitable products.
On the other hand, it is necessary to reorganize domestic market, in which the retail market was also mentioned by the Deputy Prime Minister. With this being said, there should be a long term strategy suitable with current Vietnam’s situation and conditions. Vietnam should identify priority projects and reorganize production in the direction of developing enterprises. According to statistics of the Trade Research Institute of the Ministry of Industry & Trade, in period 2016 – 2020, the growth rate of the Vietnam retail market will grow at 11.9% per year. With this current trend, it is expected that the Vietnam e-commerce market will transform drastically. Representative of the Vietnam E-commerce and Information Technology Agency said, in 2013 the number of accounts registered by companies was 1,923, in 2016, this number has increased 10 folds to 19,456. The number of accounts registered by individual also increased from 305 to 7,170. With an example on the shopping day Single Day of China beginning in 2007 and reached its peak in 2013. The result showed that it took 5 – 6 years to become a national shopping day. For Vietnam, the shopping event Online Friday has also begun its second phase, which is different to what happened 3 years ago.
As such, with more and more enterprises taking part in the e-commerce, competition will be fiercer, especially at the end of the year. In order to increase the number of products sold through e-commerce, enterprises should send a clear and efficient message to customers, so that they will remember their brands when go shopping. On the other hand, enterprises should pay attention to customer behavior to choose appropriate distribution channels and products. According to information from the Vietnam E-Commerce and Information Technology Agency, the main distribution channel for e-commerce of Vietnamese customers are forum and social network (60%), online shopping website (67%) and e-commerce exchange market (41%).
With regard to favorite products through e-commerce, there are clothing, shoes and cosmetics (56%), electronics devices and equipment (55%), household’s products (48%), air and train ticket (45%) in shopping event Online Friday.
Besides, trust is also considered an important factor. As such, the product quality is the first factor customers pay attention to when shopping online, after that is price and seller’s credibility. Due to low credibility of seller, customers still chose payment method for e-commerce as cash on delivery (COD). On the other hand, seller also do not totally trust customer, as the number of transaction cancelled right after buying is very high.
Statistics from Nielsen showed the Vietnam’ e-commerce market in 2016 reached 4 billion USD. For 45% population in Vietnam with access to internet and especially high in Hanoi and Ho Chi Minh, e-commerce is expected to continue developing and becoming a main trend in the coming time. However, small and medium enterprises still have a lot of work to do.
On the other hand, it is necessary to reorganize domestic market, in which the retail market was also mentioned by the Deputy Prime Minister. With this being said, there should be a long term strategy suitable with current Vietnam’s situation and conditions. Vietnam should identify priority projects and reorganize production in the direction of developing enterprises. According to statistics of the Trade Research Institute of the Ministry of Industry & Trade, in period 2016 – 2020, the growth rate of the Vietnam retail market will grow at 11.9% per year. With this current trend, it is expected that the Vietnam e-commerce market will transform drastically. Representative of the Vietnam E-commerce and Information Technology Agency said, in 2013 the number of accounts registered by companies was 1,923, in 2016, this number has increased 10 folds to 19,456. The number of accounts registered by individual also increased from 305 to 7,170. With an example on the shopping day Single Day of China beginning in 2007 and reached its peak in 2013. The result showed that it took 5 – 6 years to become a national shopping day. For Vietnam, the shopping event Online Friday has also begun its second phase, which is different to what happened 3 years ago.
As such, with more and more enterprises taking part in the e-commerce, competition will be fiercer, especially at the end of the year. In order to increase the number of products sold through e-commerce, enterprises should send a clear and efficient message to customers, so that they will remember their brands when go shopping. On the other hand, enterprises should pay attention to customer behavior to choose appropriate distribution channels and products. According to information from the Vietnam E-Commerce and Information Technology Agency, the main distribution channel for e-commerce of Vietnamese customers are forum and social network (60%), online shopping website (67%) and e-commerce exchange market (41%).
With regard to favorite products through e-commerce, there are clothing, shoes and cosmetics (56%), electronics devices and equipment (55%), household’s products (48%), air and train ticket (45%) in shopping event Online Friday.
Besides, trust is also considered an important factor. As such, the product quality is the first factor customers pay attention to when shopping online, after that is price and seller’s credibility. Due to low credibility of seller, customers still chose payment method for e-commerce as cash on delivery (COD). On the other hand, seller also do not totally trust customer, as the number of transaction cancelled right after buying is very high.
Statistics from Nielsen showed the Vietnam’ e-commerce market in 2016 reached 4 billion USD. For 45% population in Vietnam with access to internet and especially high in Hanoi and Ho Chi Minh, e-commerce is expected to continue developing and becoming a main trend in the coming time. However, small and medium enterprises still have a lot of work to do.
