Update: 09:31 | 06/01/2020
The size of Vietnamese e-commerce market is likely to hit 13 billion USD this year thanks to a large percentage of young residents and internet subscribers, according to insiders.
Although the local e-commerce market witnessed several giants like VinGroup and Lotte pull the plug on their e-commerce platforms Adayroi and Lotte.vn in 2019, it remains attractive.
The size of Vietnamese e-commerce market is likely to hit 13 billion USD this year.
According to the report e-Conomy SEA 2019 announced by Google and Temasek, Vietnam’s e-commerce market is currently valued at 5 billion USD, with an explosive growth of 81 percent.
Notably, e-commerce traffic growth in Vietnam ranks second in Southeast Asia, just behind Indonesia. Meanwhile, the Ministry of Industry and Trade (MoIT)’s E-commerce White Book 2019 showed that the nation’s e-commerce market was growing at its fastest pace in the recent three years.
E-commerce is playing an increasingly important role in the economy as revenue from the e-commerce sector accounted for 4.2 percent of the total retail sales, up 0.6 percent from the previous year.
Head of the MoIT’s E-commerce and Digital Economy Department Dang Hoang Hai said that Vietnam is among the fastest growing e-commerce markets in the world with annual growth rate of 35 percent, which is 2.5 times higher than that recorded in Japan.
Last year, the MoIT successfully organised the Online Friday event to promote the development of e-commerce and digital economy in Vietnam. The programme attracted more than 11.9 million respondents and 1.6 million people scanning QR codes.
A study by the Institute for Global Leadership under the US-based Tufts University in 2018 showed that Vietnam ranked 48th out of 60 countries globally in terms of switching to a digital economy. Therefore, the country’s e-commerce sector has huge potential to further develop in the future.
However, several experts believed that there are many shortcomings of the e-commerce sector, including poor infrastructure, long delivery time, complicated customs procedures, high costs, and asynchronous order retrieval services, among others.
The MoIT’s survey revealed that 40 percent of online shoppers were not satisfied with e-commerce platform delivery services. Besides, the platforms’ management policies have not kept up with the development of new business models, particularly those based on digital technologies.
Furthermore, Hai said current legal frameworks fail to catch up with the development of technologies. Meanwhile, online business models are flourishing and management agencies have found it hard to manage their operations.
He described weak capacity of the management staff as a factor that hamper the development of the e-commerce sector.