Vietnam’s e-commerce developing at unprecedented pace

Vietnam’s e-commerce market has grown at an unprecedented pace

Highlights

According to the Vietnam E-commerce and Digital Economy Agency under the Ministry of Industry and Trade, Vietnam’s e-commerce is growing 35 percent per year, 2.5 times faster than Japan’s. Vietnam’s e-commerce market reached an estimated US$4.6 billion in gross merchandise value in 2019 and is projected to reach US$23 billion by 2025, according to the e-Conomy SEA 2019 report by Google, Temasek and Bain.

Dang Hoang Hai, director of the Vietnam E-commerce and Digital Economy Agency, said e-commerce has become increasingly popular, permeating every part of daily life and changing people’s habits.

Hanoi and Ho Chi Minh City continue to play a pioneering role, creating a huge difference between Vietnam’s two largest cities and the rest. Specifically, Hanoi has more than 8,700 e-commerce websites and applications, including more than 300 e-commerce trading floors, while Ho Chi Minh City has about 130,000 websites, including nearly 9,000 e-commerce websites registered with the Ministry of Industry and Trade.

E-commerce has become a useful tool to help businesses export to the global market. The application of e-commerce in business activities has become an indispensable trend, especially for small- and medium-sized enterprises, providing access to customers worldwide.

According to the Vietnam E-Business Index 2019 Report, more than 32 percent of Vietnam’s small- and medium-sized enterprises have established businesses with foreign partners through online channels.

Infrastructure development

The development and diversification of distribution channels and the improvement of competitiveness of businesses to expand the market are necessary. Of which, the role and importance of e-commerce are underlined.

As Vietnam becomes increasingly integrated into the global economy, switching from traditional trading methods to digital platforms has proven increasingly popular and effective. However, according to the Ministry of Industry and Trade, as many as 61 percent of domestic businesses have yet to participate in e-commerce, while 21 percent have begun initial preparations.

Dang Hoang Hai said that given past achievements and future prospects, the Ministry of Industry and Trade is proposing that the government continues to promulgate the national e-commerce development program during the 2021-2025 period, with a focus on promoting investment in the advanced technologies of Industry 4.0.

The construction and development of e-commerce infrastructure is one of the pillars of the digital economy, including a national e-commerce payment system, an online management system for order and delivery services, an electronic invoice system for online sales transactions, a corporate prestige rating system in e-commerce and an electronic authentication system.

It is necessary to promote e-commerce development in key economic regions and corridors, strengthen e-commerce applications for key exports, and replicate successful e-commerce models. In the next five years, e-commerce activities serving exports will quadruple against 2019, said Nguyen Thanh Hung, chairman of the Vietnam E-commerce Association. However, to run e-commerce properly, businesses need to improve their awareness of digital tools and invest more in human resources by providing them with knowledge and skills for website operation, online sales and foreign languages, Hung said.