Selling online in Vietnam is an emerging popular practice that many companies are trying to adopt. According to the E-commerce agency’s report, revenue from business-to-consumers e-commerce in Vietnam in 2014 totalled $2.97 billion, accounting for 2.12 percent of the country’s gross retail sales of goods. However, since the concept of selling online is still new to this country and experience is insufficient, the e-commerce market is still quite fragmented and there is no clear and reliable model to learn from. At the same time, on the consumer side, the traditional way of retailing forms the conception in consumers’ head that they can only ensure the quality of the products until they can physically touch and try them. Incumbents like this stands in the way of the practice of selling online. However, selling online in Vietnam is currently a trend on a robust rise and displays strong growth rate: online revenue has grown an astonishing 314 percent since 2012 until now, and is expected to generate over $4 billion in revenue this year.
Favorable conditions that bode well for selling online in Vietnam
A United Nation Population Fund Representative in Vietnam, Mr. Arthur Erken, described the population structure of Vietnam as entered the “golden population” period, in which the highest proportion of young people (10 to 24 years) in Vietnam is recorded, accounting for nearly 40 percent of the total population. Because modern technology has already been part of their daily life, so they are more easily used to online retailing and form the habit of buying online. This group of people can propel the market of selling online in Vietnam.
What’s more, the number of internet users is increasing rapidly. In 2013, Vietnam’s online population reached a total of 32.6 million users, representing 35.6 percent of the total population. 73 percent of these current users are under 35 years old. Besides that, the mobile penetration in Vietnam is high. It is perhaps at the vanguard of mobile e-commerce. 58 percent of Vietnamese internet users shop online with their mobile phones, compared with a global average of 44 percent.
Foreign companies’ dominance on the market of selling online in Vietnam
Although the volume of foreign e-commerce websites is small, they hold 59 percent of the market share. What’ more, they are expanding rapidly without encountering competition from local players. Comparing with last year, their market share grew 14 percent. These companies mostly belong to international e-commerce companies so their expertise contributed significantly to their successes.