Vietnam's e-commerce market is experiencing unprecedented growth, driven by a combination of digital transformation, strong telecom infrastructure, and a dynamic consumer base. This growth is transforming Vietnam into a leading e-commerce hub in Southeast Asia, presenting vast opportunities for businesses and consumers alike.
The digital transformation of businesses in Vietnam has played a role in the e-commerce boom. Companies across various sectors are increasingly adopting digital technologies to streamline operations, enhance customer experiences, and expand their market reach.
The Vietnamese government has been proactive in promoting digital transformation through policies and initiatives aimed at fostering a digital economy. This supportive environment has encouraged businesses to invest in e-commerce platforms, digital marketing, and online sales channels, driving significant growth in the sector.
Vietnam’s E-Commerce Trends and Consumer Behavior
Consumer behavior in Vietnam is evolving rapidly, with a growing preference for online shopping. The COVID-19 pandemic has accelerated the shift towards e-commerce, as consumers seek safe and convenient shopping options. According to Statista, revenue in Vietnam's e-commerce market is projected to reach USD 13.90 billion in 2024, with an annual growth rate (CAGR 2024-2029) of 11.21%, resulting in a projected market volume of USD 23.65 billion by 2029.
In 2021, Vietnam's e-commerce market recorded an estimated value of USD 13.7 billion, accounting for approximately 6.5% of total retail revenue. This marked a 16% increase from 2020.
Notably, the Government of Vietnam approved a National Master Plan for E-commerce Development in May 2020, aiming to promote e-commerce adoption, enhance digital transformation, and increase cashless payments to over 50% by 2025.
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Vietnam's internet economy is booming, driven by increasing internet and smartphone penetration. Information released at the Vietnam - Asia Digital Transformation Summit (Vietnam - Asia DX Summit) 2022 revealed that Vietnam’s internet economy reached USD 21 billion in 2021, accounting for 5% of the country’s GDP and is projected to reach USD 43 billion by 2025.
According to Internet World Stats, by mid-2022, there were approximately 85 million internet users, with an 86% penetration rate, and around 69 million smartphone users, with a 71% penetration rate. These numbers are expected to rise to 82 million smartphone users by 2025. This digital infrastructure, interest and continued penetration supports the rapid growth of e-commerce.
In 2023, Vietnam was recognized among the top 10 countries globally for e-commerce growth, leading Southeast Asia in online shopping expansion. The B2C e-commerce market revenue grew by 25% in 2023, surpassing the 19.6% growth observed in 2022.
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Vietnam’s e-commerce market is dominated by five major platforms: Shopee, Lazada, Tiki, TikTok Shop, and Sendo. These platforms collectively delivered 2.2 billion products and generated VND 232.13 trillion (USD 9.52 billion) in revenue in 2023, marking a 53.4% increase from 2022.
The market share of these platforms rose from 31.4% in 2021 to 46.5% in 2023 and the upward trajectory is expected to continue, with revenue projections set to exceed VND 310 trillion (USD 12.72 billion) in 2024, representing a 35% growth from 2023.
Vietnamese Telcos Contribute to E-Commerce Sector
Vietnam's cross-border e-commerce sector is growing rapidly, driven by increasing consumer demand for international products and the country's strategic location in Southeast Asia. Vietnamese consumers are increasingly shopping on international e-commerce platforms, and Vietnamese businesses are expanding their reach to global markets. This growth is supported by improved logistics, favorable trade policies, and partnerships with international e-commerce giants. The rise of cross-border e-commerce is not only boosting sales but also fostering innovation and competitiveness among Vietnamese businesses.
One of the key drivers of e-commerce growth in Vietnam is the presence of robust telecom infrastructure. The country has made significant investments in expanding and upgrading its telecom networks, resulting in widespread internet access and improved connectivity. High-speed internet and affordable mobile data plans have made it easier for consumers to shop online and for businesses to reach a larger audience. Additionally, advancements in mobile payment solutions and fintech services are enhancing the convenience and security of online transactions, further boosting e-commerce adoption.
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Leading telecom providers are partnering with e-commerce platforms to offer bundled services, such as discounted data plans for online shoppers and exclusive deals for mobile users, whilst also playing a significant role in the expansion of the country's e-commerce sector through technological innovations and supportive services.
The VNPT eKYC platform, developed by the Vietnam Posts and Telecommunications Group (VNPT), has become a cornerstone in modernizing and streamlining identity verification processes. With over one billion user requests, it is the first platform of its kind in Vietnam. The VNPT eKYC platform facilitates electronic identification and verification, which is crucial for sectors such as banking, finance, telecommunications, and e-commerce.
In 2021, Vietnam launched a pilot Mobile Money project to promote cashless payments, a critical component for the growth of e-commerce. This initiative allows users to perform financial transactions using their mobile phones, even without a bank account, making digital payments more accessible to a broader population.
The Viettel Group, a leading telecommunications company in Vietnam, has been instrumental in accelerating the deployment of 4G networks across the country. Enhanced 4G connectivity ensures that more people have reliable access to high-speed internet, which is essential for participating in e-commerce activities.
In 2024, the Ministry of Information and Communications (MIC) is encouraging Vietnamese telecom companies to focus on developing digital applications. This strategic move aims to foster innovation and provide more digital tools and services that can support various industries, including e-commerce.
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Regulatory and Strategic Governance for Expansion
Vietnam's government has implemented robust regulatory functions and policies to ensure the sustainable growth and regulation of its e-commerce industry.
E-commerce activities in Vietnam are governed by Decree 52/2013/ND-CP, issued in 2013, with the Ministry of Industry and Trade (MOIT) acting as the regulator. In September 2020, the MOIT issued the second draft of a decree to amend Decree 52, which includes significant proposed changes. According to LNT & Partners, these changes aim to better regulate cross-border e-commerce activities. Offshore entities that establish websites with Vietnamese domains or have transactions, visitors, or orders from Vietnam must ensure the following:
- Register and Notify: Register their e-commerce activities in accordance with Vietnamese law.
- Consumer Protection Compliance: Ensure compliance with regulations on consumer protection and take responsibility for the quality of products or goods distributed via their websites through representative offices or authorized representatives.
- Periodic Reporting: File periodic reports on their activities and fulfill other obligations to prevent transactions violating Vietnam’s laws.
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Under Decree 52/2013/ND-CP, established on July 1, 2013, entitles are prohibited to use e-commerce to trade counterfeit goods, infringe upon intellectual property rights, or trade goods and services on the banned list. The decree also provides protection for domain names.
The enforcement of these regulations is supported by the Inspectorate of the Ministry of Industry and Trade, the market management office, inspectorates of provincial-level Industry and Trade Departments, and other state agencies. These bodies are empowered to sanction administrative violations in e-commerce according to the Law on Handling of Administrative Violations and relevant documents.
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The future of e-commerce in Vietnam is bright, with significant growth potential in both domestic and cross-border markets. To sustain and accelerate this growth, stakeholders need to focus on several strategic areas.
Firstly, continued investment in telecom infrastructure is essential to ensure widespread access to high-speed internet and mobile services. Secondly, enhancing cybersecurity measures and protecting consumer data should be a priority to build trust in the e-commerce ecosystem. Thirdly, developing efficient logistics networks and last-mile delivery solutions is crucial to meet the growing demand for online shopping.
Moreover, fostering innovation and adopting emerging technologies can drive competitiveness and differentiation in the e-commerce market. Businesses should explore opportunities to leverage artificial intelligence (AI), blockchain, and IoT to enhance operational efficiency, personalization, and customer satisfaction. Finally, regulatory reforms aimed at simplifying trade procedures and reducing barriers to entry can create a more favorable business environment for e-commerce growth.
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