E-commerce boom spurs overhaul in sustainability

E-commerce boom spurs overhaul in sustainability

Vietnam’s e-commerce industry is witnessing unprecedented expansion, yet its rapid growth is prompting regulators to reassess the sector’s environmental impact and long-term sustainability.

As the industry scales, concerns over packaging waste, carbon emissions, and resource consumption have become increasingly pressing, pushing policymakers to intervene. In response to these challenges, the Ministry of Industry and Trade (MoIT) has proposed significant revisions to the draft e-commerce law, aiming to align regulations with evolving market dynamics.

The draft legislation, introduced last month, outlines five key policy adjustments. Scheduled for parliamentary discussion in October and expected to pass in mid-2026, the law seeks to address the regulatory gaps in existing decrees that have struggled to keep pace with the sector’s rapid evolution and growing environmental concerns.

“E-commerce faces a significant challenge regarding waste from packaging and transportation, which puts pressure on the environment,” the MoIT stated in its proposal. “Meanwhile, green standards and sustainable development responsibilities are becoming an essential requirement in the global market. This compels e-commerce enterprises to seek emission reduction solutions, use eco-friendly materials, and build green supply chains.”

To facilitate this transition, the proposed amendments introduce incentives for green logistics, tighter oversight of packaging waste, and stricter environmental reporting requirements for major e-commerce players.

These measures coincide with a period of extraordinary growth in Vietnam’s digital economy. As outlined in a report by platform Metric on Vietnam’s online retail market landscape, the combined revenue of the five biggest e-commerce platforms (Shopee, Lazada, TikTok Shop, Tiki, and Sendo) reached $12.76 billion in 2024, marking a 37.36 per cent on-year increase.

Alongside this revenue surge, the total volume of goods sold soared to 3.4 million products, reflecting over 50 per cent growth.

According to the Vietnam E-commerce and Digital Economy Agency under the MoIT in January, officials reported that the nation’s e-commerce sector grew nearly three times faster than traditional retail globally last year, contributing one-fifth of the country’s total retail sales.

Southeast Asia remains the world’s fastest-growing digital economy, with Vietnam’s market expanding at an annual rate of 18-25 per cent, surpassing $25 billion in 2024 - a 20 per cent increase from the previous year, the agency said.

However, the industry’s rapid ascent has also intensified sustainability concerns. Agency head Le Hoang Oanh said, “E-commerce offers enormous opportunities, but without sustainable policies, its negative impact on the environment will only intensify.”

The Vietnam E-commerce Association (VECOM) meanwhile has emphasised the growing environmental footprint of the sector, particularly the persistent reliance on single-use plastics.

Vietnam’s online shopping and food delivery markets reached $22 billion and $1 billion, respectively, in 2024, generating approximately 160,000 tonnes of cardboard and 171,000 tonnes of plastic waste, the VECOM said. Notably, the e-commerce sector alone produced over 7,600 tonnes of plastic waste per $1 billion in sales, while food delivery generated nearly 18,600 tonnes.

Findings from its 2024 survey on environmental awareness among 4,000 online consumers, primarily Gen Z, further illustrate the urgency of the issue. The survey revealed that 80 per cent of respondents believed e-commerce had a negative or highly negative impact on the environment, with 21 per cent perceiving e-commerce as more harmful than traditional commerce.

Doan Quoc Tam, head of the VECOM’s Cooperation Department, said, “In terms of solutions for environmentally friendly e-commerce, 79 per cent of online shoppers believe the government should promptly enact and disseminate policies and laws on environmental protection in e-commerce.”

To mitigate e-commerce’s environmental impact, Nguyen Thanh Hung, a member of the VECOM’s Advisory Council, outlined essential policy recommendations.

“The government must quantify e-commerce’s environmental impact and swiftly integrate sustainability requirements into e-commerce, logistics, and postal regulations,” he urged. “The role of corporate social responsibility must be emphasised, and companies should adopt WWF Vietnam’s green e-commerce standards and circular economy models, shaping an eco-friendly e-commerce ecosystem.”

VIR