Online shopping boom in Vietnam likely to continue in 2022
Online shopping will continue to do well this year even if the COVID-19 pandemic ends, experts have said. The digital economy saw massive growth in Southeast Asia last year, driven by the rise of e-commerce, according to a recent report.
The regional e-commerce market reported a 24-fold increase over the last six years, from US$5 billion in 2015 to US$120 billion in 2021. It is forecast to reach US$234 billion in 2025.
The report said that the Vietnamese market is also expected to quadruple to US$39 billion by 2025 from US$13 billion last year. The pandemic has triggered major changes in customers’ behaviour and shopping habits, as 58% of surveyed Vietnamese said they will continue shopping on online marketplaces because it is convenient. This habit is likely to continue in the future as 53% of the respondents indicated that online shopping has become a normal part of their life.
The Director of the Vietnam E-Commerce and Digital Economy Agency (iDEA), Dang Hoang Hai, explained that e-commerce has been a critical distribution channel, maintaining supply chains and boosting sales of agricultural products, particularly during the severe resurgence of COVID-19. Sales on e-commerce sites reached US$13 billion last year, up 16% against 2020, making Vietnam one of the top three Southeast Asian countries with the highest growth in online retail sales.
There has been a booming demand for e-commerce since the outset of the pandemic according to the President of the Vietnam E-commerce Association (VECOM). More than 70% of the Vietnamese population have access to the Internet; nearly 50% went shopping online and 53% use e-wallets and have adopted digital payment methods. COVID-19 waves have brought about major changes in customers’ behaviour and shaped new trends.
Five key trends from 2021 are likely to continue having profound impacts on the e-commerce ecosystem this year, namely social commerce, user-generated content (UGC), personalised customer experience, digital payment, and multi-channel shopping. Though shoppers are returning to physical stores, there is no sign of a decline in online shopping. In fact, the trend keeps growing constantly. Even if the pandemic comes to an end, online shopping will continue to thrive further as it has become a habit of consumers.
The pandemic has also boosted the adoption of digital payments. Last year, non-cash payments accounted for 70% of total retail transactions in the country. According to a survey of 15,000 retailers, cashless payments in 2021 made up 72.8% of total transactions, up 9% year-on-year. Payments through bank accounts became the most popular method, accounting for 36.5% of total transactions at retail shops, restaurants, and cafés followed by cash (29.8%), e-wallets (14.8%), QR codes (9.9%), bank cards (8.5%), and payment gateways (0.5%). Notably, 89.3% of retailers have positive assessments on non-cash payments, considering them a trend at present and in the future.
As OpenGov Asia reported, new cashless payment tools are expected to be launched in the time to come to reduce difficulties that retailers currently face. Telecommunications is not the booming industry it once was as the mobile market has become saturated over the past few years. This has forced telecom providers to look for “new spaces”, one of which is mobile money.
Mobile money services will be easy-to-use in rural and remote areas, where bank branches and the Internet have not yet been strongly developed. Once mobile money services are licensed, in theory, any telecommunications subscriber can access the service. However, operators must ensure that subscribers have the correct identification information to provide services, as well as bring convenience and trust to customers. The country’s telecom market currently has about 126.3 million subscribers, of which the three largest carriers and those licensed to pilot mobile money account for more than 97% of the market share.
By Samaya Dharmaraj – OpenGovAsia.com – February 2, 2022