- News in Vietnam
- 5 January 2022
Vietnam’s e-commerce boom
The pressure of Covid-19 has brought e-commerce to solid growth, becoming a more familiar shopping channel and “saving” revenue for many units.
When the Tet shopping atmosphere is still not present in offline retail systems, 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 skincare products ordered in the first 2 hours.
But December 12 is not unique. During the past year, Vietnam’s e-commerce has accelerated enormously. 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 nine times, the number of shoppers increased two 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, Temasek, Bain & Company. So what made this year of solid expansion? According to Mr. Tran Tuan Anh, CEO of Shopee Vietnam, the main answer is that the digital transformation process has been shortened thanks to the pandemic.
This process is present in 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 start 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 get 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 large urban areas recorded an 11-fold increase in the number of orders compared to the average daily rate. Nam Dinh and Nghe An had the most substantial increase in buyer demand.
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 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 is also witnessing changes in the Vietnamese e-commerce industry. First, from a primary channel of selling electronics, fashion, and non-essential products, e-commerce platforms transform themselves into a medium to access consumer goods and food to “share the fire” with other systems retail offline during the distance.
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 in online stores.
In early 2020, when people started 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 in June when They implemented the social distancing order under Directive 16 in some provinces and cities.
The second is the 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.
IPrice shows that Shopee accounted for 57% of total website visits on 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 much 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, last year’s e-commerce industry still has points for improvement. Logistics infrastructure capacity has been continuously upgraded by airlines over the past year but still needs 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.