E-commerce market undergoes transformation amid rising competition and regulation

E-commerce market undergoes transformation amid rising competition and regulation

Intensifying competition and tighter regulations reshaped Vietnam's e-commerce market in 2025, according to the Vietnam Tech & Venture Capital Outlook 2025 report by VinVentures released on January 2.

In the third quarter of 2025, Shopeeremained the market leader with a 56 per cent share, but sales growth slowed to 4 per cent on-year, signalling saturation amid rising competition and costs.

TikTok Shop is rapidly closing the gap, posting 69 per cent growth and expanding market share from 30 per cent to 41 per cent, driven by its livestream and short-video “shoppertainment” model.

Lazada held a stable 3 per cent share, while Tiki continued to lose ground, with sales down to 80 per cent.

In the first half of 2025, TikTok Shop saw explosive seller growth of 96 per cent to 267,000, while other platforms declined sharply, with Shopee down 32 per cent to 210,000, losing roughly a third of its active sellers. TikTok Shop's average transaction value per product rose 10 per cent on-year to approximately VND130,000 ($4.95), signalling a shift beyond low-priced, trend-driven goods towards higher-quality brands, while Shopee's fell 7.2 per cent to VND107,000 ($4.07), reinforcing its value-for-deals positioning.

In the third quarter of 2025, top-grossing categories were beauty (VND17.7 trillion or $673.4 million), home and living (VND13.8 trillion or $525 million), and women's fashion (VND12.1 trillion or $460.4 million).

Shoppertainment became the “new industry benchmark”. Following TikTok's dominance, other platforms have adopted livestreaming and short-video selling. Brands are also expanding sales channels accordingly. Nina Live Hub, a vibrant livestream solution provider, now offers end-to-end services and has expanded into a full ecosystem with Nina Ecom Centre, covering creator training, creator network management, storefront operations, and revenue management across e-commerce platforms.

Effective July 1, 2025, e-commerce platforms are required to withhold VAT and personal income tax (PIT) on sales made through their sites. Platforms must collect 1 per cent VAT and 0.5 per cent PIT on revenue from goods sold by domestic individuals and household businesses.

This mechanism effectively turns platforms into tax collectors, formalising the income of thousands of micro-entrepreneurs and reducing the ability for sellers to operate informally. This also increases operational complexity and compliance costs from upgrading billing systems, seller classification, reporting and reconciliation.

The report shows the rollout of new e-commerce regulations is expected to formalise the market and improve transparency, while increasing compliance burdens, especially for sellers operating through social commerce channels

Market success will increasingly depend on government and private-sector investment in e-commerce enablers and cross-border logistics, enabling small- and medium-sized enterprises to meet international quality and sustainability standards and scale Vietnam's digital export potential.

Larger platforms and well-capitalised direct-to-consumer brands are likely to use AI to boost productivity and reduce costs by 10-30 per cent, while smaller players that lag in AI adoption may struggle to remain competitive on cost and operational efficiency.

VIR