Vietnam is one of the fastest growing e-commerce markets in the Asia-Pacific region, driven by young population, growing middle class, growing Internet penetration and rising smartphone penetration.
According to data and analytics company GlobalData, e-commerce sales are expected to increase at a compound annual growth rate (CAGR) of 18.8% between 2020 and 2024 to reach US$26.1 billion in 2024.
The COVID-19 pandemic and the subsequent social distancing measures have further accelerated the e-commerce growth. As a result, e-commerce sales in the country are set to grow by 30.3% to reach US$13.1 billion in 2020.
Kartik Challa, Payments Senior Analyst at GlobalData, comments: “The COVID-19, which triggered the fear of contamination, has resulted in change in consumer buying behavior. Shopping centers are being avoided to a large extent and instead consumers are opting for the comfort and security of online platforms for their day-to-day purchases. The accessibility of products online, during the COVID-19 pandemic, has not only increased online sales but also converted several offline shoppers to online.”
Vietnam is also taking initiatives to boost e-commerce sales in the country. In May 2020, it approved five-year National ECommerce Development Plan for 2021–25. The plan focuses on accelerating local e-commerce market with focus on improving consumer awareness, infrastructure, and related support services.
Furthermore, e-commerce sales are being driven by various events such as Singles’ Day sales conducted by e-commerce companies across Vietnam.
Challa concludes: “While the traditional payment methods such as cash, cards and bank transfers are still widely used for e-commerce purchases, the use of alternative payments is on the rise. Alternative payment solutions like PayPal, MoMo and NganLuong are gradually gaining ground with these three collectively accounting for 13.8% share in 2020.”