Key insights from map of e-commerce in Vietnam
ACCORDING to Google and Temasek eConomy SEA spotlight report, Vietnam’s e-commerce growth is at the second highest in the region.
Specifically, in 2017, Vietnam’s e-commerce growth rate (CAGR) is increasing rapidly at 30 percent, higher than their neighboring country Thailand and Malaysia.
Earlier in 2017, Vietnam E-commerce Association (VECOM) predicted that the country’s e-commerce market can reach US$10 billion within the next five years.
Despite the potential growth, the market is still at the undeveloped stage. Here are 3 key takeaways from our Map of e-commerce, which rank and classify 50 top Vietnam e-commerce sites.
No clear border between C2C and B2C e-commerce
Shopee is one the most renowned C2C e-commerce sites in Vietnam.
After 1.5 years of operation in the country, Shopee has already made it to the top 10 list of e-commerce sites, thanks to its high web traffic.
Other giant C2Cs like Vatgia and Enbac are showing a slow down in terms of traffic growth. The top 3 B2C e-commerce websites like Lazada, Mobile World, and Sendo make up half of the total online shopping visits in Vietnam.
However, their business is not entirely based on the B2C model. For example, Lazada is one of the sites that builds a marketplace within their B2C platform. On one hand, they take care of e-commerce payment, logistics, and delivery as commonly seen in B2C e-commerce model. On the other hand, they have to acquire small businesses to expand their marketplace.
Local e-commerce still dominates the market
It is worth mentioning that foreign e-commerce websites account only 14 percent in Vietnam, while domestic e-commerce sites are growing strong in the country at 86 percent. Vietnamese online shoppers have a high degree of trust on foreign products compared to local goods, according to a survey by Association of High-Quality Vietnamese Goods Producers.
However, the language barrier is a huge obstacle for Vietnamese consumers if they want to purchase from foreign websites. Furthermore, the payment methods also play an indirect influence on the number of online purchases from foreign websites. Vietnamese online shoppers prefer COD as their main payment method. 85 percent of online orders are delivered in the form of COD which is 3.6 times higher than the world average.
Highly fragmented market
Across Southeast Asia, Lazada seems to lead the way in terms of traffic. With further investment from Alibaba Group for Southeast Asia expansion, Lazada is certainly on a promising growing stage.
However, it would take Lazada a longer time to become a dominant player in Vietnam compared to other Southeast Asian countries. More specifically, in Malaysia or Thailand, Lazada occupies up to 50 percent of total online traffic. Whereas, in Vietnam, Lazada only accounts for 19 percent of traffic, followed by Mobile World and Sendo with 15 percent and 12 percent respectively.
Other big e-commerce players like Shopee, Tiki, and Adayroi are also closing the gap with their new funding. While Shopee is back up by SEA, Tiki just recently received a US$44 million funding from JD.com. In such fierce competition, the market needs a longer time to define a clear winner.
*** This is an expert article from the iPrice Group ***