According to Deputy Minister of Industry and Trade Ho Thi Kim Thoa, Vietnamese e-commerce has achieved significant progress, creating infrastructure and becoming very popular with consumers and businesses. The online sales is expected to hit 10 billion USD by 2020 or 5 percent of total retail sales. If the target were to be reached, which puts Vietnam well behind Western countries.
According to figures from the MoIT’s E-commerce and Information Technology Department, around 50 million people use the internet and three-fourths of them shop online. Last year’s 4 billion USD sales represented a growth of 37 percent from 2014, and accounted for 2.8 percent of total retail turnover.
“Vietnamese e-commerce turnover is still very small, at only 4 billion USD,” Ms.Lai Viet Anh, deputy head of the MoIT’s E-commerce and Information Technology Department, said.
Experts said that Vietnam remains a largely underdeveloped retail e-commerce market, with digital commerce accounting for only a small fraction of the country’s total retail sales. However, growth is expected over the next few years as increasing numbers of young consumers go online for the first time, largely through smartphones.
The e-commerce market share has expanded, with small cities accounting for 25 percent of last year’s 4 billion USD sales, and Hanoi and Ho Chi Minh City for 75 percent.
Ms.Lai Viet Anh said the country’s population with its relatively young median age would help expand the e-commerce consumer class.
Vietnamese youth are learning to access the internet via smartphones at a very young age, said Ms.Lai Viet Anh, and consequently have shown much more of a willingness to make purchases on their mobile devices than the older generations. Most urban residents in Vietnam may be familiar with e-commerce, but in rural areas, it is not well-known, she added.
Mr.Nguyen Thanh Hung, president of the Vietnam E-Commerce Association, also noted the number of rural residents using it is climbing steadily. This trend would also help strengthen e-commerce usage over the next few years, he said.
The entry of more people and small and tiny enterprises into social media increased e-commerce turnover. An estimated 32 million people, or 36 percent of the Vietnamese population, used social media frequently.
Some 30 percent of consumers always refer to social media before shopping, 28 percent of businesses advertise and sell on them, and 62 percent of e-commerce websites have integrated with social networks like Facebook (70 percent), Google Plus and Twitter (27 and 18 percent respectively).
According to Mr.Nguyen Thanh Hung, the implementation of robust 4G networks by mobile carriers (which is already underway) would also help drive increasing digital purchases made via smartphone, particularly from the rural areas.
In addition, the declining costs of 4G devices and service plans would make it much easier for consumers to research, browse and buy via smartphones. It makes the targeted 10 billion USD by 2020 a realistic and achievable target.
Mr.Nguyen Thanh Hung also said the Government must create infrastructure and a legal framework for e-commerce to reach the goal. The Government is considered to play a very important role in e-commerce. Besides creating proper infrastructure and a legal framework, the Government will also be a big user by calling for online tenders and providing online public services. In addition, the Government will protect the rights of consumers shopping online.
Ms.HoThi Kim Thoa said we need comprehensive cooperation between localities, ministries and industries to develop e-commerce.
The MoIT is developing an online marketplace at www.tuhaoviet.vn and many local businesses are keen to get on it. The ministry will develop more websites to support local enterprises with e-commerce, Ms.Ho Thi Kim Thoa added.
