Opportunities for e-commerce in Vietnam to boom

Recently, e-commerce in Vietnam is assessed to grow robustly. It is forecasted that Vietnam's internet economy will reach US$57 billion by 2025, ranking second in Southeast Asia, after Indonesia.
Opportunities for e-commerce in Vietnam to boom ảnh 1 Illustrative image. (Photo: SGGP)

According to Mr. Nguyen Ngoc Dung, Chairman of Vietnam E-commerce Association (Vecom), in 2021, despite being heavily affected by the Covid-19 pandemic, Vietnam's e-commerce still maintained a good growth momentum with an increase of about 20 percent and a scale of $16 billion. Keeping the growth momentum, Vietnam is now one of the countries with the largest e-commerce market size in the region, besides Indonesia, Thailand, and Malaysia.

Vietnam's internet economy in 2021 grew by 31 percent compared to 2020 and reached a scale of $21 billion. Of which, the online retail sector enlarged by 53 percent and touched a scale of $13 billion.

There are two waves that have contributed to the steady development of e-commerce in Vietnam in 2020 and 2021 and will be the driving force for the next period. The first wave took place during the early stages of the Covid-19 pandemic in 2020, and the second one from June to September 2021, during the fourth Covid-19 outbreak.

The notable features of these two waves are that in the context that all socio-economic activities were stagnant, and business activities were seriously affected. However, many traders have made efforts to digitalize to seize new business opportunities, and the number of online consumers has increased drastically in both quantity and quality.

Opportunities for e-commerce in Vietnam to boom ảnh 2 Illustrative image. (Photo: SGGP)
The second wave resonates with the first one, creating a new strong stimulus for e-commerce in the medium and long term. In the second wave, the digital transformation of both traders and consumers is shown more evidently than in the first one. First, the number of new online consumers continues to climb, and a large number of buyers have become smart consumers, more proficient in online shopping skills. A part of consumers even has prioritized online shopping over traditional shopping. Secondly, many traders, especially e-commerce businesses, have actively carried out digital transformation activities to adapt to the pandemic, as well as prepare for business activities in the new normal state after the fourth wave of Covid-19. Third, because of the difficulties caused by the dependence on a single shopping channel during the pandemic, many consumers have become familiar with multi-channel shopping. From 2022, e-commerce will become the mainstream shopping trend. Every trader needs to change quickly to accommodate this new shopping experience for customers. With outstanding features, obviously, the second wave has created momentum for the development of e-commerce. The Chairman of Vecom said that in 2020 and 2021, despite being heavily affected by the Covid-19 pandemic, online retail still stood firm and made an important contribution to maintaining the growth momentum of e-commerce, especially promoting economic recovery after the pandemic. Even during the pandemic, many Vietnamese merchants had quickly adapted to business applications in the online environment and actively made the digital transformation to adapt. These activities need to be maintained and have a long-term orientation to both seize the opportunity to recover from the pandemic and be highly adaptive to potential risks in the future. Despite being affected by the Covid-19 pandemic, Vietnam officially joined multilateral and bilateral trade agreements in 2020 and 2021. Opportunities for online export and participation in international markets have opened up for Vietnamese businesses. It is time for domestic enterprises to aim at the export market instead of only focusing on the domestic one.
Opportunities for e-commerce in Vietnam to boom ảnh 3 Mr. Nguyen Ngoc Dung, Chairman of Vietnam E-commerce Association (Vecom). (Photo: SGGP)
As many cases of counterfeit products and scams on the e-commerce platforms are showing signs of increasing, Mr. Nguyen Ngoc Dung said that Vecom always wished and actively participated in activities to support small and medium-sized enterprises not only in Hanoi and Ho Chi Minh City but also in many localities across the country to develop e-commerce. In training activities for local businesses, business households, or cooperatives, Vecom not only focuses on building an e-commerce platform or improving online business skills but also always cares about the dissemination of legal policies on e-commerce. E-commerce brings many conveniences to consumers when shopping online. However, it is also an opportunity for some subjects to advertise and sell poor-quality products or counterfeit goods. Vecom also actively participates in activities to popularize knowledge and warns consumers not to buy products that are too cheap or products on unofficial websites and those that have not registered with State management agencies. Vietnam has officially joined many multilateral and bilateral trade agreements, so opportunities to participate in online export and international markets have opened up for businesses. Through many activities to support small and medium enterprises in big cities and localities, Vecom noticed some limitations in online export. Specifically, enterprises have products of high quality but do not know how to do branding, neither have knowledge of transboundary online export nor experience in implementing and operating transboundary export activities. Therefore, Vietnamese small and medium-sized enterprises need to overcome these disadvantages to soon seize the opportunity to participate in the international market.