In recent years, Vietnam's e-commerce market has been booming,The scale is expected to reach 25 billion USD in 2024, a 20% increase compared to last year! In Southeast Asia, Vietnam's e-commerce growth rate is second only to Indonesia and Thailand, making it a battleground for major brands and platforms. What makes Vietnam's e-commerce market so attractive?
Next, TuKe will interpret the secrets of the Vietnamese e-commerce market one by one, providing you with exclusive references to seize the opportunity!
Image source: Internet
Market Growth Drivers
The rapid development of Vietnam's e-commerce is due to several key factors. First, the increasing penetration rate of the Internet and smartphones has laid the foundation for e-commerce. According to statistics, by 2023, Vietnam's Internet penetration rate had reached 70%, with smartphone usage dominating. This technological condition allows more consumers to participate in online shopping anytime and anywhere.
Image source: Sina Finance - Economic Daily
In addition, Vietnam's young population accounts for a large proportion of the total population, and they have a high degree of acceptance and dependence on digital consumption. According to the "2024 Vietnam E-commerce Trend Report" released by Vietnamese market research agency Q&Me, Vietnamese consumers' online shopping behavior has increased significantly. The report points out that about 32% of consumers shop online several times a week, 22% shop online at least once a week, and nearly 30% choose to shop online once every two to three weeks.
Image source: Q&Me
Popular Categories and Consumer Preferences
Vietnamese consumers' habits of using e-commerce platforms reflect the diversity and potential of the market. Currently, the most popular online shopping categories include beauty products, home and lifestyle goods, and household appliances, accounting for 21%, 19%, and 11% respectively. This demand distribution shows that Vietnamese consumers are increasingly focusing on quality of life, especially their preference for personalized and functional products.
With the diversification of e-commerce platform functions, cross-border e-commerce has also begun to occupy a place in the Vietnamese market. Many Vietnamese consumers show strong interest in affordable and diverse overseas products, which provides a good opportunity for international brands to enter the Vietnamese market.
Image source: State Post Bureau of the People's Republic of China
E-commerce Platform Competition
In the Vietnamese e-commerce sector, Shopee and TikTok Shop are undoubtedly the two leaders. Shopee, as the leading e-commerce company in Southeast Asia, is favored by consumers and has become their preferred shopping platform. According to statistics provided by YouNet ECI, in the first quarter of 2024, Shopee's total gross merchandise value (GMV) in the Vietnamese market reached an astonishing 53.74 trillion VND, accounting for a high market share of 67.9%, further consolidating its leading position in the e-commerce industry.
On the other hand, TikTok Shop's growth rate is remarkable. With its unique social e-commerce model, TikTok combines short videos with shopping, winning the favor of a large number of young users through content recommendations and live-streaming sales. This model not only enhances the shopping experience for consumers, but also provides brands and individual merchants with a low-cost, high-exposure promotion channel. The report shows that in the first quarter of this year, TikTok Shop's GMV in Vietnam reached 18.36 trillion VND, accounting for 23.2% of the market share, second only to Shopee.
It is worth noting that competition in Vietnam's e-commerce market is still intensifying. Platforms such as Lazada and Tiki are also actively competing for market share through promotional activities and membership services, further boosting the overall activity of the industry.
Image source: YouNet ECI
Challenges and Prospects
Although Vietnam's e-commerce market is developing rapidly, it still faces some challenges. Logistics infrastructure is not yet perfect, especially in remote areas where delivery efficiency is low, which has a certain impact on the consumer experience. In addition, market supervision needs to be further strengthened to ensure consumer rights and crack down on counterfeit goods and fraud.
For multinational companies and brands, Vietnam is not only an emerging market, but also a strategic springboard to enter Southeast Asia. In this process, companies need to fully understand the behavioral preferences of Vietnamese consumers, combine localized operations, influencer cooperation, and precise advertising strategies to stand out in the fierce market competition.
Overall, the rise of Vietnam's e-commerce market has injected new vitality into the industry and provided an important reference sample for global e-commerce development. With the continuous optimization of technology, consumption habits, and market environment, the future of Vietnam's e-commerce is worth looking forward to.