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COVER STORY

A shift in shopping

Those with an eye on Vietnam’s retail landscape are positive
about the future of e-commerce in the country.

The waves of Covid-19 last year helped than in neighboring countries like Thailand
accelerate e-commerce, with many and Indonesia. Among urban cities, in
people trying it for the first time. We also terms of shopper reach, Vietnam’s e-com-
saw consumers’ online baskets become merce is 10 percentage points higher than
more diverse, with not only clothing, con- Thailand’s and even double that of Indone-
sumer electronics, and beauty and cosmetics sia, presenting huge potential to invest in
but also groceries (fresh food, packaged the country. All the ingredients are here
food). Indeed, according to Kantar World- for the sector to continue developing, and
panel data, more than 40 per cent of house- we forecast e-commerce to reach an 8 per
holds in Urban 4 key cities have bought cent share in urban areas and 4 per cent in MR. PETER CHRISTOU,
fast-moving consumer goods (FMCG) rural areas by 2025, especially in the FMCG Commercial Director, Worldpanel Division
online, and almost half of online shoppers market. Foreign investors may bring their Vietnam, Kantar
today are new compared to 2019. Given knowledge and experience from developed
that the government is encouraging people markets like China or South Korea to 19 has led to a rush in e-commerce and
to shop online to avoid going out and further accelerate and enhance the shopping accelerated digital transformation across
having contact with people, the pandemic experience, such as live shopping, thriving the world and all sectors, and Vietnam is
has been a catalyst for the development of marketplaces, and fast delivery, etc. There no exception. We can see it in many busi-
FMCG sales online, whose share has reached is no doubt that online players will grow nesses’ organizational structure, with an e-
5 per cent and continues to go up with their sales but they also face challenges in commerce department and e-commerce
robust growth above 50 per cent. Vietnam’s operations that may negatively impact on division, etc., and with an increasing number
online FMCG sales are more developed cost and the customer experience. Covid- of e-commerce-related jobs created. %

We can say that the “golden age” of ucts, consumers have chosen products that The trend towards online shopping
e-commerce has arrived in Vietnam. are of good quality and provide health was already happening but the pan-
On the positive side, the pandemic has benefits. Since consumer habits and behav- demic fast-tracked its development out
been a catalyst for e-commerce, and encour- ior have changed due to online trading, of necessity, such as safety and lockdowns,
aging e-commerce is one way to assist businesses and service providers need to but also out of the more longer-term
businesses in overcoming the difficulties. figure out how to personalize their con- benefits to consumers, such as ease of
Furthermore, shopping via e-commerce sumer experiences in the “new normal”. use, availability of products, range of
will become a new consumption trend Secondly, Vietnam has the fastest cross- goods, price, and continuously improving
instead of just a way of coping during the border e-commerce development in the logistics. From the shopper’s end, based
pandemic. For this reason, businesses also world. It is an excellent opportunity for on the 2021 Shopper Trend Report from
need to develop their logistics networks, businesses to take part in the global supply NielsenIQ, except Travel and Entertain-
online payment methods, and social net- chain. To effectively connect Vietnamese ment, where a downtrend was observed,
works to keep up with the trend. There goods with the global market, businesses other categories increased from 2020 to
are two key things that I think businesses must step up and adopt new trends in 2021. Not surprisingly, it is more everyday
need to keep in mind. First of all, the pan- addition to the solutions provided by man- sales that have led to this trend, such as
demic has rendered price sensitivity no agement agencies. I think there are so Personal Care, Home Care products, and
longer a significant factor in consumer many opportunities for foreign investors especially Food and Beverages. There has
purchases. Instead of selecting cheap prod- with the impressive growth of e-commerce been an increase from 68 per cent of
in Vietnam. The legal environment in the shoppers claiming to be purchasing Food
country is among the most favorable in and Beverages in the last six months of
ASEAN for establishing e-commerce. A 2020 to 81 per cent in 2021. Increasingly,
strong commitment by the Vietnamese more shoppers are saying they will con-
Government to the economy’s digital trans- tinue to purchase FMCG online or even
formation has led to its development, and increase the amount they will purchase
it will grow much stronger if more foreign over the next six months. Vietnamese
investments are made here. In terms of consumers are also enjoying promotions
economics, more and more Vietnamese being run in online channels. With more
companies are shifting to e-commerce suppliers and retailers partnering with
models, where they purchase and sell items e-commerce platforms such as Lazada,
on e-commerce platforms. Logistics devel- Shopee, Tiki, and Sendo, these platforms
opment and growth in online payments are aggressively pursuing consumer
are all favorable factors for foreign investors. engagement efforts via different festivals,
MS. RAINIE TRAM NGUYEN, The pandemic has led businesses to invest
CMO, Accesstrade Vietnam special dates, and even specific promotions
more heavily in e-commerce. % to attract more shoppers to their websites.

16 | VIETNAM ECONOMIC TIMES | SEPTEMBER 2021