Vietnam - eCommerceVietnam - eCommerce
E-commerce in Vietnam has made great progress in recent years. An estimate by the Vietnam E-commerce and Digital Economy Agency (VECITA) put the total B2C e-commerce revenue number at $5 billion in 2016. Vietnamese businesses are trying to reduce transaction risks and expand into larger markets while Vietnamese consumers will benefit from more options and convenience.
67 percent (64 million) of Vietnam’s population have access to the internet, an increase of 28 percent. Vietnam now has 50 million subscribers registered on Facebook, and 64 percent of these users are between 18 – 34 years of age.
E-Commerce is expected to continue to grow thanks to the growth of smartphone usage to an estimated 70 million users, accounting for 73 percent of the population. According to a Wearesocial’s report, as of January 2018, the most popular categories for consumers were: technology and electronic equipment ($840.7 million), followed by travel ($541.1 million), furniture & appliances ($367.9 million), toys & hobbies ($ 86.3 million), fashion and beauty ($358.3 million), food, books, stationery, flower, and gifts.
Price is the top concern for Vietnamese consumers when it comes to online shopping behavior, followed by the reputation of the seller and brand. Major issues remain unchanged, including customers’ low trust in online shopping, unpopular online payment platforms, and quality of delivery and fulfillment services. Online shopping is perceived as less convenient than offline shopping by 48 percent of shoppers in 2016, an increase 9 percent.
In August 2016, the Prime Minister issued Decision no. 1563/QD-TTg approving the master plan for the development of e-commerce from 2016 to 2020. Under this Decision, by 2020 a network of transportation, delivery, and fulfillment services will have been built for e-commerce covering all provinces and cities in the country, and will gradually connect to the region. However, there are still unclear customs mechanisms, policies, decrees, and circulars guiding cross-border e-commerce transactions that pose an obstacle to growth.
Logistics remains the main burden for the sector, especially for customers in rural areas or second-tier cities. The Vietnam E-Commerce Association (VECOM) has collaborated with the Vietnam Logistics Enterprise Association to promote e-commerce and logistics applications. Through this initiative several third-party fulfilment services have recently begun operations. These include Viettel Post, VNPost, Saigon Post, Giaohangnhanh, Shipchung, Giaohangtietkiem, and DHL eCommerce.
In a 2016 VECITA survey, 60 percent of responders prefer online forums and social networks while 57 percent opted for e-commerce sites as their online shopping channel. The popularity of mobile applications has increased significantly from 16 percent to 28 percent in 2016. Only 11 percent of Vietnamese retailers have developed their own standalone websites instead of using a third party online retailer such as eBay and Alibaba to sell their products. Mobile commerce has also begun to grow rapidly as Vietnam’s mobile infrastructure has improved. Many businesses have invested more in this new platform and upgrading to mobile-friendly websites or developing applications.
Vietnamese online-shoppers favor U.S products, especially technology and electronic equipment. Due to a lack of trust in local e-commerce platforms, Vietnamese prefer buying from trusted e-commerce sites such as Amazon and Rakuten. However, unclear government policy and regulation for cross-border e-commerce is an obstacle for those popular companies entering the Vietnam market. Therefore, customers in Vietnam who want to buy goods on Amazon.com use an intermediary service such as Weshop.com.vn (launched in 2015) and fado.vn (launched in 2014). Through 2016, Vietnamese customers have purchased more than 800 million products on Amazon. Countries that Vietnam’s online shoppers purchase the most goods from are the U.S., Japan, Korea, and Germany.
67 percent (64 million) of Vietnam’s population have access to the internet, an increase of 28 percent. Vietnam now has 50 million subscribers registered on Facebook, and 64 percent of these users are between 18 – 34 years of age.
E-Commerce is expected to continue to grow thanks to the growth of smartphone usage to an estimated 70 million users, accounting for 73 percent of the population. According to a Wearesocial’s report, as of January 2018, the most popular categories for consumers were: technology and electronic equipment ($840.7 million), followed by travel ($541.1 million), furniture & appliances ($367.9 million), toys & hobbies ($ 86.3 million), fashion and beauty ($358.3 million), food, books, stationery, flower, and gifts.
Price is the top concern for Vietnamese consumers when it comes to online shopping behavior, followed by the reputation of the seller and brand. Major issues remain unchanged, including customers’ low trust in online shopping, unpopular online payment platforms, and quality of delivery and fulfillment services. Online shopping is perceived as less convenient than offline shopping by 48 percent of shoppers in 2016, an increase 9 percent.
In August 2016, the Prime Minister issued Decision no. 1563/QD-TTg approving the master plan for the development of e-commerce from 2016 to 2020. Under this Decision, by 2020 a network of transportation, delivery, and fulfillment services will have been built for e-commerce covering all provinces and cities in the country, and will gradually connect to the region. However, there are still unclear customs mechanisms, policies, decrees, and circulars guiding cross-border e-commerce transactions that pose an obstacle to growth.
Logistics remains the main burden for the sector, especially for customers in rural areas or second-tier cities. The Vietnam E-Commerce Association (VECOM) has collaborated with the Vietnam Logistics Enterprise Association to promote e-commerce and logistics applications. Through this initiative several third-party fulfilment services have recently begun operations. These include Viettel Post, VNPost, Saigon Post, Giaohangnhanh, Shipchung, Giaohangtietkiem, and DHL eCommerce.
In a 2016 VECITA survey, 60 percent of responders prefer online forums and social networks while 57 percent opted for e-commerce sites as their online shopping channel. The popularity of mobile applications has increased significantly from 16 percent to 28 percent in 2016. Only 11 percent of Vietnamese retailers have developed their own standalone websites instead of using a third party online retailer such as eBay and Alibaba to sell their products. Mobile commerce has also begun to grow rapidly as Vietnam’s mobile infrastructure has improved. Many businesses have invested more in this new platform and upgrading to mobile-friendly websites or developing applications.
Vietnamese online-shoppers favor U.S products, especially technology and electronic equipment. Due to a lack of trust in local e-commerce platforms, Vietnamese prefer buying from trusted e-commerce sites such as Amazon and Rakuten. However, unclear government policy and regulation for cross-border e-commerce is an obstacle for those popular companies entering the Vietnam market. Therefore, customers in Vietnam who want to buy goods on Amazon.com use an intermediary service such as Weshop.com.vn (launched in 2015) and fado.vn (launched in 2014). Through 2016, Vietnamese customers have purchased more than 800 million products on Amazon. Countries that Vietnam’s online shoppers purchase the most goods from are the U.S., Japan, Korea, and Germany.
Digital Marketing and Social Media
Social networks are the most popular methods used to promote commercial website and apps with 47 percent of the businesses using this method and 41 percent advertise their website and apps through search engines. Most businesses in Vietnam spend VND 10 million (approximately $440) a year for online advertising. Only 10 percent of local businesses spend more than VND 50 million (approximately $2,200) for the promotion.
E-commerce IPR environment
Under Decree 52/2013/ND-CP (Law on E-Commerce) effective from July 1, 2013, it is prohibited to take advantage of e-commerce to trade in counterfeit goods or trade in goods or provide services infringing upon intellectual property rights, or trade in goods or provide services in the list of goods and services banned. Domain names are also protected under this law. The Inspectorate of the Ministry of Industry and Trade, the market management office, inspectorates of provincial-level Industry and Trade Departments and other state agencies may sanction administrative violations in e-commerce according to their responsibilities provided in the Law on Handling of Administrative Violations and relevant documents.