Vietnam’s E-Commerce Breakthrough

The pressure of Covid-19 has brought e-commerce to a strong growth, becoming a more familiar shopping channel and “saving” revenue for many units.

When the Tet shopping atmosphere is still not clearly present in offline retail systems, since the middle of last month, e-commerce platforms have had the first wave of successful Tet sales (December 12). ). Lazada said that the entire floor’s revenue this time doubled compared to the same period in 2020, with the number of sellers increasing by 2.5 times. The purchasing power of consumers for decorative items, house cleaning to prepare for Tet also increased sharply. Similarly, on Shopee, consumers flocked to beauty and home renovation shopping, with 70,000 skin care products ordered in the first 2 hours.

But December 12 is not unique, during the past year, Vietnam’s e-commerce has accelerated strongly. Previously, the occasion of 11/11 also recorded many new milestones in most of the leading exchanges. For example, Tiki set a record with sales increased 9 times, the number of shoppers increased 2 times compared to weekdays.

In terms of size, the Vietnamese e-commerce market in 2021 will grow by 53% compared to 2020, to US$ 13 billion, according to calculations by Google, Temasel, Bain & Company. So what made this year of strong expansion? The main answer, according to Mr. Tran Tuan Anh, CEO of Shopee Vietnam, is that the digital transformation process has been shortened thanks to the pandemic.

This process is present in both shoppers, merchants and online retail platforms. The “e-Conomy SEA 2021” report indicates that Vietnam has had up to 8 million new digital consumers since the beginning of the pandemic (as of the first half of 2021), of which 55% are from non-regional regions. urban level.

Retention is high as digital consumption has become a way of life – 97% of new consumers are still using the service and 99% intend to continue using it in the future. Meanwhile, 30% of digital sellers believe they cannot make it through the pandemic without digital platforms.

More and more vendors and customers come from small towns and rural areas. Shopee’s data shows that on December 12, sellers outside of large urban areas recorded an 11-fold increase in the number of orders compared to the average daily rate. On the buyer side, Nam Dinh and Nghe An had the strongest increase in orders.

At a recent event, Mr. James Dong, Managing Director of Lazada Vietnam said “2021 is a year to remember”. According to him, the pandemic has stimulated millions of new customers to experience online shopping for the first time.

Brands and sellers have one more potential channel to grow and recover from the Covid-19 wave. “As a result, e-commerce has really transformed from a side channel to become a core part of the growth strategy of brands and sellers,” he assessed.

Not only growing in scale, but 2021 also witnessing changes in the Vietnamese e-commerce industry. First, from a main channel of selling electronics, fashion and non-essential products, e-commerce platforms transform themselves into channels to access consumer goods and food to “split the fire” with other systems. retail offline during the holidays.

The group of online department stores grew strongly. iPrice said, Covid-19 is a powerful catalyst, one of the spurs to explode the demand for essential products on online stores.

In early 2020, when people began to stay at home to prevent the epidemic, websites specializing in departmental business grew 45% in traffic compared to the previous quarter. When social distancing is eased, this trend remains stable with an increase of 10% at the end of the year. In the first quarter of 2021, only online grocery was the only category that continued to grow positively with 13%.

Google searches related to the keyword “grocery store” increased 223% in the second quarter. The number of searches increased 11 times in July compared to May and 3.6 times compared to June when the social distancing order under Directive 16 was implemented in some provinces and cities.

Second, is an increasingly fierce “four-horse race” between Shopee, Lazada, Tiki and Sendo. Shopee remains dominant in terms of visits throughout the year, but Lazada has accelerated its rise.

Data from iPrice in the third quarter shows that Shopee accounted for 57% of total website visits on all multi-industry e-commerce platforms, Shopee Vietnam recorded 77.8 million visits per month. It is worth noting that after many consecutive quarters of being surpassed by competitors, from the second quarter of 2021, Lazada Vietnam rose to No. 2.

This is not difficult to understand when from this year, Lazada has put a lot of effort into developing the logistics system, incentive programs, shopping combined with entertainment to resonate and attract users. By the third quarter, they had an average of 21.4 million website visits per month.

It is forecasted that next year’s “four-horse race” will continue to witness many dramas. Especially when Tiki received an additional $ 258 million in Series E in November. CEO Tran Ngoc Thai Son stated his goal: “Tiki becomes a place where Vietnamese people can find all the products and services they need. “.

However, besides the bright spots, the e-commerce industry last year still has points for improvement. Logistics infrastructure capacity has been continuously upgraded by airlines over the past year, but still needs to continue to improve. Many customers still have not forgotten the experience of waiting for an order for 2-3 months during the peak of the gap.

Besides, the percentage of Vietnamese goods on e-commerce platforms is still low. Less than 20% of the top items purchased on the floor during the epidemic season are Vietnamese goods. “Being inferior on the online shopping channel puts domestic businesses at a clear risk of losing many important opportunities to overcome difficulties and develop post-epidemic,” commented iPrice.

Forecasting Vietnam’s e-commerce market in 2022, iPrice’s expert team points out 3 trends. The first is to personalize the shopper experience. Consumers are in need of e-commerce businesses to help find the products they need, suggest coupons, streamline the supply chain to shorten delivery times, and standard product quality.

According to Accenture, 91% of consumers are more likely to purchase from a label they recognize and remember, which offers relevant items and relevant product recommendations. Therefore, in addition to customer retention through shopping and entertainment, customer satisfaction through consistent personalization of the shopping experience may be the trend next year. .

The second is the rise of cashless payments. According to the Report of Facebook and Bain & Company, for the first time, the cash payment ratio (COD) has dropped significantly from 60% (in 2020) to 42% (in 2021). The strong attraction of cashless payments is reflected in the increase in the use of e-wallets by up to 82% and the increase in bank transfers by up to 18%.

And the third is the trend of environmentally friendly consumption. Today’s consumers are clearly aware that products not only need to have good quality but also be safe for health and do not affect the living environment.

Sustainability has played a huge role and it has also made inroads in the e-commerce industry. In addition, packing for general invisible transport creates a greater amount of waste. Consumers are more interested in products with sustainable manufacturing, packaging and delivery processes.

According to a report from Facebook, ESG (Environmental, Social and Governance Factors) is in the top 3 reasons why consumers change brand choice. In Vietnam, 97% of consumers are willing to pay more for this value, and 86% share a specific extra spending on products and services of 10%.

“It’s hard to predict whether sustainability, eco-friendliness will become the main trend of 2022, but it certainly has importance in e-commerce in the future,” iPrice commented. .