Vietnam's e-commerce market to reach US$12.8 billion in next five years

The size of Vietnam's e-commerce market can hit VND300 trillion (US$12.8 billion) in the next five years, Gijae Seong, Amazon Head of Global Selling Vietnam, said at the cross-border e-commerce conference "Asian Elite, Global Breakthrough" in Hanoi on June 7.

Vietnam's transnational online commerce exports reached over VND80 trillion ($3.5 billion) in 2022, Gijae Seong said, adding that if Vietnamese enterprises receive more comprehensive support and apply e-commerce to export, the figure would grow in the next five years.

In 2022, the number of Vietnamese businesses opening a store on Amazon increased by 80% over the same period, and sales rose by 45%. Transborder e-commerce transparently benefits enterprises by helping them to quickly capture customer information, improve products to meet customer demand, globalize product brands in addition to globalizing products through digital transformation and globalization.

Gijae Seong, Amazon Head of Global Selling Vietnam, speaks at the conference. Photo: Congthuong.vn

"Amazon encourages companies to change their mindset and not only outsource but also build brands to increase product value and make business more sustainable in the global market," Gijae Seong said.

At the event, Lai Viet Anh, Deputy Director of the Vietnam eCommerce and Digital Economy Agency under the Ministry of Industry and Trade, stressed that the gloomy global economy has significantly affected Vietnam's import and export activities.

"In the first four months of 2023, although Vietnam achieved a trade surplus of $6 billion, the export turnover of the whole country fell 1.8% year-on-year. These challenges put enterprises in a situation where they are forced to change their business model to maintain production, export, and increase competitiveness in the market," Viet Anh said.

In addition to the trend toward mobile and social e-commerce, the growth rate of Vietnam's transnational e-commerce has been more than twice as high as that of e-commerce in general, she added.

However, businesses, especially Vietnamese small and medium enterprises, face many barriers in terms of strict regulations of the import market; human capacity in product development and product competitiveness. These barriers are common to import and export activities, not only those through e-commerce platforms.

According to a report on the Vietnam E-Business Index (EBI) 2023 conducted by the Vietnam E-commerce Association (Vecom), Vietnam's e-commerce market is expected to grow by 25% by the end of 2023. The report is based on three sub-indexes: information technology, human resources and infrastructure, business-to-consumer e-commerce, and business-to-business e-commerce.

The booming e-commerce sector in 2023 and development in the following years is aided by a series of growth drivers such as the wave of digital transformation, consumers' trust, technological infrastructure, and favorable mechanisms and policies issued by the Vietnamese Government, the report said.

It added that with thousands of businesses nationwide, the e-commerce industry is expected to continue this high growth rate at about 25% by 2025.