Online shopping has become the choice of many Vietnamese consumers, especially office workers who are too busy to wait for hours at counters of overcrowded supermarkets with shopping carts full of goods for the Lunar New Year (Tet
), the most important festival in Vietnam.
Ahead of Tet, which starts on the eve of February 15, shoppers purchase across several categories in preparation for the holiday, with online sales surging compared to the same period last year, especially in fashion (86 percent) and food and groceries (51 percent), according to online advertising company Criteo.
“In the lead up to Lunar New Year, we often see sales increases in certain categories as people shop for new clothes and stock up on festive treats," said Alban Villani, Criteo’s General Manager for Southeast Asia, Hong Kong and Taiwan. "Increasingly, they are now also making the purchases online, particularly on mobile apps, which means that commerce providers need to focus their digital budget on the right platforms and at the right time.”
With too little time to spare for shopping at supermarkets, many people, especially office clerks, opt for online shopping, which offer everything needed for Tet, from food, beverage, garment, to peach blossoms.
“I selected flowers and fruits from an e-commerce website. Just several hours later, they were delivered to me, said Nguyen Thu Nga, 30, an office worker from Hanoi’s Hai Ba Trung District. "Fruits were fresh, and wrapped in a nice bag. But, flowers were not actually as nice as they looked on the website. So I returned them."
“With a few clicks, I can have everything I need for Tet. It is extremely convenient,” she said, adding that hundreds of people have been waiting for hours at counters of overcrowded stores. Many of them had to leave their shopping carts as they could not wait for their turn to pay.
E-commerce has been taking off in Vietnam thanks to booming internet usage and smartphone ownership, along with massive investments from key retail players.
Online shopping's penetration in Vietnam's retail grew from 5.4 percent to 8.8 percent on average in Hanoi, Ho Chi Minh City, Da Nang and Can Tho in 2016 alone, and an online shopping trip was worth triple the value of an offline basket, according to a recent report released by market research firm Kantar Worldpanel.
Like other emerging markets, Vietnam is on a shift from traditional retail to e-commerce.
Most online buyers pay by cash on delivery. Up to 59 percent of Vietnam’s nearly 95 million people have bank accounts, the central bank's data showed.
According to economists, this will limit the sector in the long term, especially higher value purchases. The majority of Vietnamese consumers also prefer to see the product before paying for it.
However, the potential for the sector is huge amid expanding middle class and smartphone users.
Across the country, the ratio of people using smartphones among mobile phone subscribers reached 84 percent in 2017, increasing from 78 percent from the previous year, according to the Nielsen Vietnam Smartphone Insights Report 2017.
Vietnam now boasts more than 52 million active accounts to advertisers, Reuters reported last year, citing social media agencies We Are Social and Hootsuite. More than half of Vietnam's population of nearly 92 million people are online.
“The growth rate of Vietnam’s e-commerce market is estimated at about 35 percent, which is 2.5 times higher than Japan,” said industry expert Duc Tam at the recently-held Vietnam Online Business Forum 2017.
Online sales in Vietnam have expanded rapidly in recent years, currently accounting for 3.39 percent of the country’s retail market. The total retail market grew 10.9 percent last year to $173.27 billion.
The World Bank forecasts that Vietnam’s $200 billion economy is likely to grow to a trillion dollars by 2035. More than half of its population, compared with only 11 percent today, is expected to join the ranks of the global middle class with consumption of $15 a day or more.
According to one estimate, about 30 percent of the population will be buying goods and services over the internet in 2020, with each shopper spending an average of $350 per year.