The Hanoitimes - In order to support enterprises getting know more about e-commerce, new trend of consumption, as well as providing measures for brand development, the Vietnam E-commerce Association (VECOM) in collaboration with the Danang Department of Industry & Trade held the conference on brand management and facilitate e-commerce.
According to statistics, in 2017, the Vietnam e-commerce market has continued its impressive growth. At present, there are 45% of population using internet, in which 62% have some online transactions, resulting in rapid increase in online payment. However, the average value of online payment per person is still low, while the total revenue from e-commerce has been quite modest compared to the total revenue in retail sector (around 3%).
For enterprises, around 45% enterprises in Vietnam have their own websites. However, most of them are only developing website for the purpose of providing information for the company and its products, without paying sufficient attention to create a steady stream of revenue through online business in website; very few enterprises update information of products frequently, as well as use website as a communication channel with customers.
VECOM also discussed new trends with regard to the development of e-commerce in Vietnam. As such, the cross-border e-commerce will be the main trend in the coming time. Domestic enterprises have focused on export; Vietnamese customers are buying more imported products; online tourism has brought more profits for foreign enterprises than for domestic enterprises. The booming of online advertisement, social networks and search engines dominating the market; foreign enterprises have invested heavily in Vietnam’s online advertising market. Selling goods through multiple channels have been chosen to increase profit, in which the focus is on online business through mobile internet, website and reducing brick and mortar stores.
E-commerce now contributes to a record 36% of global FMCG growth, making it crucial for retailers and brand owners to understand and unlock the channel as it becomes more prevalent. As such, Kantar Worldpanel projections show that by 2025, online FMCG will be a USD 170 billion-dollar business, and hold a 10% total market share—up from 4.6% in 2016. South Korea and China will continue to lead the way and Asia in general remains at the cutting edge of online adoption.
In Vietnam, e-commerce channel has evolved thanks to booming internet usage and smartphone ownership along with massive investment of key retail players, and now takes 0.5% of the FMCG market in 4 key urban cities of Vietnam. The percentage of e-commerce shoppers grew from 5.4% to 8.8% of urban 4 cities population in the last year alone, and an online trip size is at triple value of an offline basket.
Although the size of Vietnam e-commerce market is still small compared to other formats, it holds a strong potential because the value growth of e-commerce within Fast moving consumer goods (FMCG) is up to 69%, which makes Vietnam become one of the countries with the highest e-commerce growth rate in the world. It’s now the critical time for investors to enter this promising market, while current retail giants should gradually move their offer online & take advantage of their brand equity with omni-channels strategy, to be successful and to defend their current position. On the whole, consumer trust and high logistics cost for delivery model are major challenges that need to be addressed by businesses in order to move Vietnam e-commerce forward.