VN e-commerce market growth to be led by online retail market

October 26, 2015 | 09:06 am GMT+7

Vietnam is one of Asia’s unexplored markets in terms of the compelling potential in e-commerce. The country’s e-commerce market growth is expected to be led by online retail market followed by demand for travel and entertainment services online, according to a report by Indian-based Ken Research.


According to Ken Research’s recently issued report “Vietnam E-Commerce Market Outlook to 2019 – Driven by Internet Penetration and Smartphone Usage”, e-commerce managed to gain some attention in Vietnam only after 2011. The retail market in Vietnam is considered one of the most dynamic markets in the South East Asia with such a high growth rate. Hanoi and Ho Chi Minh City are ranked in the top 10 cities in the entire Asia for retail expansion. Hanoi ranked third after Beijing and Shanghai as the city with liveliest retail market.

Vietnam is one of the top three countries with the highest rate of growth of internet and mobile phone subscribers in Vietnam, with more than four million people using the internet a day, offering great potential for online shopping development. 
In 2014, Vietnam had a total population of 90.7 million out of which 35.4 million people have access to internet, making the internet penetration rate of 39%, amongst the highest in the region. Though the E-commerce market is not very old, the country has many big players such as Lazada, Hotdeals, Vatgia and others which are driving E-commerce in Vietnam. 
Vietnam E-Commerce is one of the fastest-growing E-commerce markets in South East Asia. Cash on Delivery in Vietnam is the most preferred mode of making payments online.
Vietnam has great potential to grow its E-commerce, especially after investors shifted attention from China towards Vietnam for the next manufacturing hub in the east. Vietnamese are digitally attuned, especially in urban parts of the country which is the main target audience for  E-commerce players, at least in their initial and growing phase.
The online retail market of Vietnam is driven by major players such as Lazada and Amazon along with local players such as tiki, Vatiga, Zalora and others due to their focus on localized content. 
In 2014, the online retailing market contributed more than 65% in the overall B2C market of Vietnam. Constant innovation, launch of newer brands online, proliferation of affordable smartphones coupled with rise in broadband access have largely propelled market growth. 
The online retail market has been segmented into clothes, shoes & cosmetics, technology Kitchen and home appliances, books and stationery, CD’s & DVD’s, mother & baby products and others.
The Vietnam gaming industry is the biggest in the entire South East Asia which gives its online gaming market an edge. Vietnam Online Entertainment & Services booking market has attained small but significant growth in overall e-commerce market. 
The concept of online entertainment has become prevalent since the rise in internet penetration in Vietnam, owing to the emergence of websites offering online booking of movie and event tickets as well as professional services. 
The rising share of online entertainment and services booking is supported by the fact that more players are entering the market with different business models to tap the customer base.
Ken Research is a research and information service company operating with a network of partner firms across the US, Asia and Europe.