Vietnam e-commerce market to grow 25% this year

Vietnam's e-commerce sector could grow by up to 25% this year to $20 billion, the Vietnam E-commerce Association (Vecom) said.

At the annual Vietnam Online Business Forum (VOBF) on Tuesday, Vecom noted that amid the lingering economic hardships left from 2022, the sector’s growth of 22% in the first quarter of this year was impressive. With pacey and sustainable development, e-commerce remains one of the “brightest” industries in Vietnam, it said.

Despite strong growth, the size of the e-commerce sector in Vietnam remains modest, equivalent to 8.5% of total retail sales and service revenue, said Vecom chairman Nguyen Ngoc Dung. However, this small ratio indicates high potential for the sector, he added.

Vietnam’s retail sales and service revenues, which indicate domestic demand, reached VND501.3 trillion ($21.34 billion) in March, up 13.4% year-on-year, according to the General Statistics Office. The first-quarter figure grew 13.9% to VND1,501 trillion ($64 billion).

Vecom noted that social media has become a rival for e-commerce, with 65% of firms deploying their businesses on platforms such as Zalo, Facebook Messenger, and Viber. The association noted that Tiktok Shop, a platform run by Tiktok, is becoming more and more popular.

Shopee stays on top

Shopee, Lazada, Tiki, Sendo and Tiktok Shop continued to be the biggest e-commerce platforms in Vietnam in the first quarter of this year, with total revenue of VND39 trillion ($1.66 billion) from sales of 390 million products, according to a report by local market researcher Metric.vn.

Of this, Singapore-headquartered Shopee accounted for the largest portion of 63.1%, or VND24.7 trillion ($1.05 billion), from sales of 289.7 million products. Lazada, backed by China’s Alibaba Group, followed with revenue of VND7.5 trillion ($319.1 million), or 19.1% of the total, and sales of 55.2 million goods. Tiktok Shop, despite being a relatively new player after its debut in April 2022, ranked third with a revenue of VND6 trillion, or 15.5% of the total, and 42.1 million goods.

Tiki, a Vietnamese player, and Sendo, another domestic firm backed by Vietnamese tech giant FPT, accounted for 2% of the total figure.

Metric.vn added that though total revenue increased 22% year-on-year in the first quarter of 2023, the number of sellers fell 17%, indicating that smaller firms had withdrawn from the market, leaving more space for the big players.