Size of local e-commerce market expected to hit US$13 billion this year
Size of local e-commerce market expected to hit US$13 billion this year
With a steady and strong growth rate since 2015, the size of the local ecommerce market is expected to expand to US$13 billion this year.
Last year, the Vietnamese e-commerce market witnessed the shutdown of some large platforms, such as Adayroi and Lotte.vn, but the market remains attractive, news site Vietnamplus reported.
According to the e-Conomy SEA 2019 report by Google and Temasek, the value of the local e-commerce market has reached US$5 billion and reported a staggering growth of 81%.
Vietnam is the second fastest growing e-commerce country in Southeast Asia, after Indonesia. According to the E-commerce White Book 2019, launched by the Ministry of Industry and Trade’s Vietnam E-commerce and Digital Economy Agency, the country’s e-commerce market has enjoyed the third fastest growth rate in the last three years.
With a population of some 95 million people and a high percentage of younger residents and Internet users, the local e-commerce market will continue to grow significantly.
Notably, the revenue from the e-commerce sector accounted for 4.2% of the total retail sales of goods and services in 2019, up 0.6 point over the previous year.
Moreover, multiple e-commerce platforms in Vietnam, such as Sendo and Tiki, have successfully called for investment.
Dang Hoang Hai, head of the Vietnam E-commerce and Digital Economy Agency, said Vietnam was one of the fastest growing e-commerce markets in the world, with an annual growth rate of 35%, 2.5 times higher than Japan.
Further, firms which apply technology have reported a growth rate of 2.1 times higher than others. Revenues of small and medium companies spending more than one third of their budgets on technology would be nine times higher than those spending less than 10%.
Last year, the Ministry of Industry and Trade successfully held its Online Friday, the largest e-commerce shopping event in the country, to promote the development of e-commerce and the digital economy.
On the other hand, the local e-commerce sector has its shortcomings, such as poor infrastructure, long delivery times, complicated customs clearance procedures and high costs.
A survey by the Ministry of Industry and Trade indicated that 40% of online consumers are not satisfied with e-commerce platform delivery services. Also, their management policies have yet to keep pace with the development of new business models, especially those based on digital technologies.
Hai admitted that the issuance of legal documents failed to catch up with the development of new technologies. Moreover, online business models are mushrooming and their operations have caused difficulties for management agencies.
To boost exports via e-commerce platforms, the Ministry of Industry and Trade has connected with Amazon Global Selling. Being able to access 300 million Amazon’s customers is a great opportunity for Vietnamese enterprises.
In the coming periods, the ministry will continue improving policies, deploying solutions to develop an e-commerce ecosystem and support enterprises in applying advanced technology of the fourth industrial revolution.
This year, the ministry will work to remove fake products and those violating intellectual property rights from e-commerce platforms, and propose amending and supplementing regulations on penalties for administrative violations in the sector.
The ministry will propose that the Government issue a national comprehensive e-commerce development plan for the 2021-2025 period to encourage enterprises’ use of technologies to improve the quality of their services and competitiveness.
Also, a database of e-commerce firms will be built to support market management agencies in resolving disputes.
Minister of Industry and Trade Tran Tuan Anh said that the ministry will develop e-commerce infrastructure, such as a national e-commerce payment system; connect training centers and enterprises to ensure the supply of human resources for the sector; and provide knowledge and skills on digital transformation.
