Vietnam’s e-commerce market had estimated value of $7.8 billion in 2018. From the low starting point of $4 billion in 2015, the market has expanded rapidly with a stable high growth rate in the last three years.
With the growth rate of over 30 percent in 2018, director of the E-commerce & Digital Economy Department under the Ministry of Industry and Trade (MOIT) Dang Hoang Hai believes that Vietnam would be among three e-commerce fastest-growing countries in the region, after Singapore and Indonesia.
Hai said Vietnam has a legal framework to regulate the e-commerce development, including the law on e-transactions and Decree 26. It also has good infrastructure conditions, the basic factor to develop e-commerce.
The Vietnam E-commerce Association (Vecom) predicted that the domestic e-commerce market would be valued at $13 billion by 2020 if it maintains the annual 30 percent growth rate in 2019 and 2020.
If so, the real market value would exceed the $10 billion threshold targeted by MOIT in the master plan on e-commerce development in 2016-2020.
Vecom’s chair Tran Trong Tuyen stressed that the predicted figure is calculated based on statistics of the last three years. The high growth rate is partially attributed to young people’s habit of buying goods online.
However, Tuyen, while agreeing that the legal framework for e-commerce development is ‘relatively good’, said that growth would not just depend on the laws. In Vietnam, "the major problem is time”.
He went on to say that e-commerce needs a favorable environment and ecosystem to develop, which include telecom infrastructure, advanced IT, and high-quality services.
While affirming that the market has high potential, Tuyen warned that not all players can develop.
“The most important thing investors must have when joining the e-commerce market is technologies” to limit costs, he said.
E-commerce is a promising market, especially for small and medium businesses with low costs. Businesses which trade based on e-commerce platform can apply the omni-channel mode, and use outsourced services for inventory and order management.
Previously, businesses mostly used manual transport services. But now, with omni-channel sale models, which connect transport service providers, they can operate with half of the current staff.
Tuyen advised small and unexperienced businesses to choose technologies suited to them. There are technologies specifically designed for small businesses which can help cut costs and improve competitiveness.