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COVER STORY

We need to be careful, though, to not had to adapt, and quickly. The pandemic Covid-19, retailers from rural areas have
forget about traditional channels. It is less has forced conversations that we thought started partnering with e-commerce plat-
about one or the other and more about an were a couple of years away. We are seeing forms along with the support of the gov-
omni-channel shopping mentality taking many of them increasing their presence ernment to sell fresh products online. %
over. The e-commerce world is now part online via platforms such as e-commerce,
of the DNA of retailing, and bricks-and- delivery apps, and social networks, in order
mortar stores have to adapt to ensure they to reach more customers. This omni approach
not only remain competitive in terms of means a retailer can now be available in
things such as range, price, and quality, multiple formats, helping them reach more
but also use these channels to help increase customers and avoid being too dependent
foot traffic into their store. They already on one platform. Logistic challenges still
have strong loyalty and trust, which are exist, and this is the biggest area of opportu-
things consumers have been concerned nity. Despite improvements here we still see
about in the e-commerce world, which significant room for growth. The best example
leads me to think that traditional stores of this is rural Vietnam. E-commerce pene- MS. HUYNH BICH TRAN,
also have an enormous opportunity to win tration here is still relatively low, as you Director, Vietnam Retailer Vertical Lead,
in the online world as well. Retailers have would expect. Under the severe impact of NielsenIQ

The pandemic is an opportunity for lockdown, more than half (51 per cent)
e-commerce to grow tremendously. reported using cash less often since the
Part of the reason is that, during outbreaks, outbreak, while 38 per cent prefer using e-
strict lockdowns have forced shops and wallets and 23 per cent choose bank trans-
restaurants to close and people to spend fers. In general, two-thirds (60 per cent)
more time at home, and around one-third now feel more positive about going cashless.
(32 per cent) of consumers have spent This could accelerate growth in the number
more online. There were not many changes of customers using e-wallets even after the
in the customer base for Tiki and Lazada pandemic is brought under control. MoMo
during the last three Covid-19 waves in is broadly used nationwide as a popular
Vietnam. However, Shopee has been dom- transfer and payment method. E-commerce
inating the market and has a large group platforms have also partnered with major
of existing customers with growth in cus- e-wallet providers to provide customers
tomer base throughout the year. E-com- with a seamless experience. Stockpiling
merce has continued its regular growth and product unavailability are disrupting
trajectory during Covid-19. Comparing the consumers’ traditional preferences for spe-
pre-Covid-19 and Covid-19 time, the esti- cific brands or product attributes, especially
mated growth in revenue of e-commerce in categories deemed essential. As a result,
in Vietnam is 36 per cent. During the fourth 65 to 75 per cent of Vietnamese have already
wave - the longest outbreak in the country tried alternative brands or products during
- we are seeing e-commerce platforms Covid-19. The expected post-crisis recession
MR. RICHARD BURRAGE, pushing for essential goods delivery, espe- is likely to exacerbate this trend as con-
Managing Partner, Cimigo cially groceries. E-commerce will continue sumers look for and switch to more afford-
to play a major role as it continues to evolve able options. %
to adapt to the needs of the market. For
The winners from changes in Viet- businesses, there is pressure to expand and
nam’s consumer dynamics during innovate and go where their customers are.
the pandemic continue to be online shop- Specifically, due to the social distancing
ping platforms, which have already period, consumers started to use online
expanded penetration, transaction volumes, platforms to both satisfy essential daily
and “basket” size compared to 2020, pro- needs and entertainment. Major online
pelling a massive 54 per cent increase in shopping platforms in Vietnam have added
e-commerce sales in the country last year. entertainment games and livestream to
Covid has provided a helpful push, with keep customers engaged digitally. A clear
the channel building consumer familiarity, example of this is the success of TikTok.
trust, and, right now, dependency. Online The platform delivers a shortcut to help
shopping will surpass modern trade share small to medium-sized businesses create
of sales by 2028. Not all platforms will and promote content and products directly
survive, and there are many factors that to their customers. To go where the cus-
established platforms have already checked, tomers are, brands need to target their
such as product reliability, delivery, range, marketing campaigns with an in-depth
promotions, and merchant management knowledge of consumers and their online
tools. There is still some distance to travel preferences. In Vietnam, 60 per cent agree
to improve customer shopping journeys, that advertising helps them choose what
the experience for shoppers, and new tools they buy. Additionally, 58 per cent often MR. THUE QUIST THOMASEN,
to engage consumers to make their expe- notice advertisements on the internet. CEO, YouGov Vietnam
rience enjoyable. % When asked about payment methods during

SEPTEMBER 2021 | VIETNAM ECONOMIC TIMES | 17