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E-commerce deemed lucrative market in Vietnam

People shop at an electronic product store (Photo:VNA)

HCM City (VNA) – E-commerce is a market with
numerous opportunities for businesses in Vietnam, recording an annual growth
rate of 35 percent – one of the fastest rates in the world.

The country’s e-commerce revenues reached 4
billion USD in 2016. At the current growth rate, it is set to hit 10 billion
USD in 2020, accounting for 5 percent of total retail sales in Vietnam,
according to the Ministry of Industry and Trade.

Experts said multichannel retail will continue
to increase as domestic and foreign retail companies planning to invest big in this
field.

A study conducted Nielsen, a market research and
global information company, shows that Vietnam is one of the world’s most dynamic
countries in hi-tech application and use, including online shopping.

Differences between traditional and multichannel
shoppers will create opportunities for both producers and retailers. 

Up to 82 percent of traditional shoppers buy
goods according to their plans, making it hard for companies to attract new
consumers. Meanwhile, 52 percent of multichannel shoppers compare different
brands before buying an item.

As Vietnamese often travel by motorbikes, only
19 percent of consumers purchase goods in large volume. The figure is 44
percent among multichannel shoppers, according to Nielsen.

The vigorous growth of online retail has brought
success to domestic enterprises such as the Mobile World Investment Corporation
(MWG) and the Vietnam Dairy Products Joint Stock Company (Vinamilk).

MWG has invested strongly in online retail even
though it has more than 1,390 stores in the chains of Thegioididong.com, Dien
may xanh and Bach hoa xanh.

It earned more than 3.37 trillion VND (148
million USD) in revenues through online retail in 2016, a year-on-year surge of
104 percent. Earlier this year, the firm also opened vuivui.com, an e-commerce
website with 80 percent of goods provided by itself.

Despite being successful offline, Vinamilk also
opened Vinamilk eShop, an online retail channel, in late 2016 to sell dairy
products.

Apart from domestic businesses, foreign firms
like Aeon and Lotte, who have gained successes in the traditional retail model,
recently also stepped up online retail.

Chairman of the Vietnam Internet Association Vu
Hoang Lien said in spite of challenges caused by globalisation and
technological development which facilitate cross-border online shopping,
e-commerce in Vietnam is still a promising market for domestic enterprises.

They should make use of cloud computing to run
profitable business on the internet. They also need to build websites suitable
for their business, he said.

It is of utmost importance to ensure consistence
in online and offline information to gain consumers’ trust, Vice Chairman of
the Vietnam E-Commerce Association Nguyen Ngoc Dung said, adding that opaque
business activities on the internet will hamper brand development.

He noted that businesses, both domestic and
foreign, enjoy equal chances when doing online business. He suggested domestic
retailers capitalise on their advantages and explore niche markets to expand
activities.-VNA

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