Vietnam, a booming e-commerce market
Undeveloped years ago, e-commerce is today one of the most promising sectors of the Vietnamese economy supported by strong factors; macroeconomic, cultural, and demographic.
The sector continues to attract major players and investors and has prospects of significant growth in the medium term, between 25% and 30% per year. E-commerce growth is forecasted to double to US$10 billion in 2020.
Vietnam is therefore one of the fastest-growing countries in terms of the development of electronic commerce which included the sales of services, goods, and methods of payment.
Vietnamese e-commerce is mainly developing on the Business-to-Business (B2B) with online platforms such as Buy2Sell, the leading B2B platform in Vietnam since 2015 with the aim of introducing and developing a strong brand identity and marketplace for foreign brands, Business-to-Consumer (B2C) model such as Shopee, Tiki, Lazada but also social media such as Facebook and Instagram which are increasing sharply mostly to sell clothes.
E-commerce growth in Vietnam is driven by 3 big trends :
- The economical growth: Vietnam’s GDP rate hit a 10-years record high of 7,08%, making it one of the top growth performances in the region and which is expected to continue to grow in the coming years.
- The emergence of a middle class: it’s fastest-growing middle and affluent class compared to other ASEAN member countries characterized by rising wages and thus purchasing power encouraging the sales incentive and then the online shopping of foreign brands. This class is now looking for foreign brands with high standard and are willing to pay extra money to get good products.
- A young and connected population: the Vietnamese population is young with a median age of 30.5 years and highly connected. The number of young Vietnamese between the ages of 16 and 30 is estimated at 23.3 million in 2018, or 24.6% of the country’s population. Internet is a growing industry in Vietnam ranked as the 17th highest internet penetration rate and climbing smartphone penetration rate in the world.
Nowadays, e-commerce in Vietnam plays a predominant place in the business world, which is constantly growing and opens up many opportunities.
Online sales attract many investors, mainly foreign (China, Germany, Japan, South Korea, Singapore, and the United States). Thanks to several agreements; ASEAN (The Association of Southeast Asian Nations) and the recent Free Trade Agreement between the European Union and Vietnam (EVFTA).