Will Vietnam’s e-commerce be taken over by foreigners?
Experts have warned that Vietnam's e-commerce market, which makes up 2.8% of total turnover of retail goods and services, may fall into foreign hands.
Many takeover deals have been made recently. Zalora Vietnam has been sold to Nguyen Kim Trading Corporation, and Zalora Thailand has been sold to the Central Group, which holds 49% stake in Nguyen Kim.
Prior to that, Lazada, described as a new power of Vietnam’s e-commerce, was swallowed up by Chinese giant Alibaba at the price of US$1 billion.
Lazada is the Number 1 in Vietnam’s e-commerce industry now which made up 36.1% of total e-commerce turnover in 2015.
Once taking over Lazada, Alibaba will also inherit Lazada’s first position in the market, though analysts commented that it would be a challenge for the giant to hold this position.
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Cong An Nhan Dan reported that Korean Lotte, a big player in the retail market, plans to expand its business in Vietnam and open an e-commerce website later this year.
An analyst commented that while many Vietnamese e-commerce firms have to shut down because the market is too severe, foreign companies continue to jump into the Vietnamese market.
The companies, with powerful financial capability, would accept losses in the first phase of operation in Vietnam and wait for opportunities.
A report of the Ministry of Industry and Trade (MOIT) showed that the value of the B2C (business to customer) market in 2015 was US$4.07 billion, up by 37% over 2014, accounting for 2.8% of total turnover of retail goods and services.
It is estimated that an online shopper spends US$160 on average a year.
The majority of online shoppers still prefer making payment in cash, accounting for 91%, while 48% make transfer via bank accounts and 20% of e-commerce clients use payment cards.
Le Thi Ha from MOIT’s E-commerce and Information of Technology, commented that though e-commerce has been developing rapidly in recent years, online payments lag far behind other regional countries and the world.
According to Visanet, the world’s largest online payment network, Vietnam’s electronic payment index in 2015 was 37%.
The index was equal to Thailand’s, and much lower than other Asian countries, including Singapore (55%), China (60%) and the Republic of Korea (70%).
Do Thang Hai, Deputy Minister of Industry and Trade, said that 2016 would be a pivotal year which marks a new development stage in Vietnam’s international economic integration. This would pave the way for e-commerce and electronic payment to develop more strongly.
