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COVER STORY

and more and more people are trying new
tools to conduct online business. During VIETNAM’S RETAIL E-COMMERCE MARKET
(million people)
the recent March Expo, a promotional event
of Alibaba.com, hundreds of Vietnamese 12 30 30
SMEs tried livestreaming and short videos 11.8
and the number continues to rise.
Amid the pandemic, traditional B2B 10.08
buyer’s behavior has quickly changed from
offline sourcing to online. “From September 8 23 8.06 24 25
2019 to September 2020, active buyers on Revenue ($ billion) 24 Revenue growth (%)
Alibaba.com increased 84 per cent and 6.2
GMV [gross merchandise value] more
than 110 per cent,” he told VET. “Among 4 5 20
categories, Agriculture and F&B are always
at the top, with the most active sellers, and
represent 24 per cent of accounts on 18
Alibaba.com Vietnam. These numbers indi- 0 15
cate that more and more sellers choose 2015 2017 2018 2019 2020
Alibaba.com to conduct international busi-
ness and many buyers can more easily find
high-quality products at competitive prices.” NUMBER OF ONLINE SHOPPERS
Cho Tot has also witnessed rising demand (million people)
for second-hand items from Millennials
looking to not only save money but also the 2016 32.5
environment. “The demand for second-
hand electronics increased by nearly 20 per 33.6
cent in the first half of 2021,” Mr. Tan 2017
revealed. “As sustainable consumption is
inevitable in the future, together with our 2018 39.9
parent group Carousell in Southeast Asia,
we will push up investment in building a 2019 44.8
re-commerce (reverse commerce) platform
in Vietnam, where everyone can buy and
sell pre-owned goods without any friction.” 2020 49.3
Vietnam’s economy has struggled since
the fourth wave of the Covid-19 struck in Source: Vietnam E-commerce White Book, 2021
April, especially the property and auto-
motive industries. However, Mr. Tan com-
mented, it’s like a coiled spring, waiting tem, including strong support tools in larger and costlier infrastructure. Investors
to burst back to shape when the pandemic operations and marketing, integrated tools also need to innovate payment and refund
is brought under control. To catch the to engage consumers, and activities that mechanisms to improve overall sales.
return of consumer demand and growing enhance online presence. Despite the favorable prospects in Viet-
trade momentum, Cho Tot is investing nam, as a foreign company, Cho Tot still

more in resources to build a strong foun- ADDRESSING KEY BARRIERS faces difficulties and obstacles in admin-

dation for future product and service inno- E-commerce currently represents only istrative procedures, tax policies, and so
vation for Cho Tot Nha and Cho Tot Xe. 5 per cent of total retail spend in Vietnam on. “Administrative procedures are cum-
Covid-19 had triggered significant eco- so there is much room for growth, accord- bersome and troublesome and present dif-
nomic change and social disruption that ing to Mr. Ralf Matthaes, Managing ficulties,” Mr. Tan said. “Issues of interest
has led to new market needs and shifting Director of Infocus Mekong Research. to foreign investors include the time and
consumer behavior in Vietnam. Foreign investors, with substantial cap- cost of licensing procedures, how conditions
In fact, the pandemic has encouraged ital, have an opportunity to address bar- can be met, and policy transparency.” Many
businesses, from premium brands to micro- riers facing e-commerce in Vietnam, issues regarding conditional business invest-
enterprises, to quickly implement digital including supply chains, warehousing, ment have overlapping laws, he added,
strategies to continue reaching customers. maintaining stock, and product delivery. which poses problems.
As online sales become a bigger revenue These need to be addressed via a national Despite the challenges, due to rising
stream for brands and sellers, Mr. Tuan logistics mechanism. foreign investments, a favorable regulatory
Anh suggested that e-commerce platforms Regarding delivery, as Vietnam comes environment, and improved internet con-
need to adapt and work with these brands out of the pandemic, streets will be clogged nectivity, Vietnam’s e-commerce industry
and sellers to implement innovative retail with traffic, slowing delivery times, he is rising rapidly and shows no signs of
strategies to help them engage customers explained. Developing a smart delivery sys- slowing down. By 2025, online sales are

in a differentiated manner and grow their tem would be a welcome solution for e- expected to account for roughly one-tenth
online presence. As a key contributor to commerce users. More than 70 per cent of of all goods and services sales in the country
the region’s digital economy, Shopee has a all e-commerce purchases are cash-on-deliv- and Vietnam’s thriving digital economy
firm commitment to helping brands and ery (COD), which also places a strain on and booming e-commerce market make
entrepreneurs succeed in e-commerce and deliveries and, above all, cash management, it an ideal location for foreign investors to
grow in the long term with a robust ecosys- resulting in e-commerce providers needing tap into new business opportunities. %
SEPTEMBER 2021 | VIETNAM ECONOMIC TIMES | 13