E-commerce
Report
October, 2020
Prepared by BritCham Vietnam
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Index
About Us
1
Overview of Vietnam's Economy
2
E-commerce Landscape in Vietnam
3
Major E-commerce Platforms in Vietnam
4
Regulations
5
Opportunities & Challenges
6
References
7
This report was produced by BritCham Vietnam with references from sources believed to be accurate and reliable at the time of publishing. Individuals, companies and organizations are
required to acknowledge BritCham Vietnam when using this work for any papers or publishing purposes. We are not responsible for any loss or damage resulting from opinion, errors,
inaccuracies or omissions affecting any part of the content.
OUR TEAM
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Tuan Thieu
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Nhi Nguyen
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An Doannn
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Truc Doan
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Brian Bulloch
Minh Pham
What we do ?
The British Chamber of Commerce (BritCham Vietnam) was officially established in Ho Chi Minh in
1998 with its Ha Noi branch founded in 2007. BritCham Vietnam aims to support and develop Vietnam-
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THE OVERVIEW OF
VIETNAM'S ECONOMY
In 2020 Middle & Affluent Middle
Class population expected to reach
3.3 million
96.5 million
people in 2019
Urban population: 36.6%
Urbanization rate: 2.98%
2.15%
Unemployment Rate
21.9 M
people with higher than
annual rate of change
vocational primary degree
GDP: 255 billion USD (2019)
GDP per capita: 2.567 USD 57,364,217
Quantity of labour force (2019)
World Bank's Ease of Doing Business 2020:
70th among 190 countries and
4th in ASEAN
Asia Development Bank predicts that Vietnam growth rate will fall to
4.8% in 2020, but will bounce back to 6.8% in 2021.
According to PwC, Vietnam is one of the few countries in the world that
are expected to still grow, while others go into recession.
E-COMMERCE LANDSCAPE
IN VIETNAM
Triggers to Buy Online (%)
Rising Internet and smartphone penetration coupled
with a large young population will propel the
Vietnamese e-commerce market. It is projected to grow Internet Sur ng 57
at a compound annual growth rate (CAGR) of 16.3%
Browsing EC site 42
from VND218.3 trillion (US$9.4bn) in 2019 to VND399.5
trillion (US$17.3bn) in 2023, according to forecasts Ads on Social
26
network
from GlobalData, a leading data and analytics company.
Other's post on (Source: Q&Me)
25
social network
Online Purchases of Friends/ Family
recommendation
24
Consumer Goods Window
Shopping
14
(Source: Digital Report Vietnam 2020)
0 20 40
Total number of people purchasing
Monthly Spending for Online
consumer goods online in 2019:
Shopping in VND (2019)
54.70 Million
25.0 % 26.0 %
Value of the market for online consumer
goods purchases (in US dollar):
$ 2.96 Billion (Source: Q&Me)
Average Annual Revenue Per Online 14.0 %
Consumer Goods Shopper (ARPU) in US
dollar: 35.0 %
$ 54 > 1,000,000
700.000 - 1,000,000
Online Consumer Goods ARPU as a Percentage 300,000 - 700,000 < 300,000
of GDP per capita (both US dollar):
2.1 % Mobile Internet Users (million)
61.73 62.4 65.99
47.19
39.7
Usage Time (per day)
2015 2016 2017 2018 2019
Active Social Media Users (million)
46 65
35 55 62
6H30M 3H08M 2H22M 2015 2016 2017 2018 2019
PC/Laptop Mobile Social Media
(Source: Digital Report Vietnam 2020)
(Source: Digital Report Vietnam 2020)
E-COMMERCE LANDSCAPE
IN VIETNAM
Online Shopping Improvement (vs 1 year ago)
Strong growth has prompted global companies to
invest in Vietnamese e-commerce companies. In 2018,
the e-commerce company Tiki received US$5.3m and 29
35 34
US$44.0m funding from VNG Corporation and Chinese 32 34
investor JD.com, respectively. In the same year, another
company Sendo secured US$51m from SBI Group (a 56
44 44 39
Japan-based financial services company) and other 35
investors. Furthermore, Chinese e-commerce giant
Alibaba invested an additional US$2bn in Lazada, one of Easy to nd Pricing Product quality
Delivery speed Customer Support
the leading e-commerce companies in the country.
Much better Better
ONLINE SHOPPING - GENDER DIFFERENCES
GlobalData’s latest report, ‘Vietnam Cards & Payments: Opportunities and Risks to 2023’, states that the country’s
e-commerce market has doubled during the past five years with total online spending increasing from VND90.1
trillion (US$3.9bn) in 2015 to VND218.3 trillion (US$9.4bn) in 2019.
Fashion Beauty Food/ Beverages IT/ Electronics Toiletry
80
62 60
58
48 42 29
42 28
26
Female Male Female Male Female Male
Female Male Female Male
Source: Q&Me (%)
ONLINE SHOPPING FREQUENCY & PAYMENT METHOD
Source: Digital Report Vietnam 2020
5.0 %
27.0 % 11.0 %
31.0 %
37.0 %
10.0 % 30.0 %
32.0 % 17.0 %
Weekly Once - a few times/ month Credit Card Cash Bank Transfer
Once/ several month Rarely/ Never E-Wallet Others
MAJOR E-COMMERCE
PLATFORMS IN VIETNAM
Shopee:
Founded in 2015 by SEA Group and despite having only entered the Vietnamese market in mid-2016, latecomer
Shopee has completely taken the lead in the e-commerce race in Vietnam as well as the region. With more than 34
million website views in the third quarter of 2019, Shopee is also the e-commerce platform with the most monthly
app downloads and active users.
Advantages Disadvantages
- Top e-commerce platform with a huge - Highly competitive due to large number
customer base. of sellers
- Young customers who are into trendy - Has not been able to control the issues of
and new items price dumping, counterfeit and low-
- Various promotional campaigns to quality products
attract buyers - A strict, repetitive product-checking
- Shipping subsidy policies process with long waiting time
- Prices are not controlled - The subsidy condition only applies to
- As a partner with many shipping products valued above VND 200,000,
couriers, Shopee can provide sellers with which many shops selling low-value
various shipping options in terms of products find difficult to achieve.
pricing and time - High shipping fees for express orders
Lazada:
As a Southeast Asia-focused e-commerce platform from Alibaba Group, Lazada stands with Shopee as the other
largest e-commerce platform in the region.
Advantages Disadvantages
- Logistics costs (pickup, shipping, etc.)
are high
- High commission for sellers: 5% for
- No quality control over the products
electronics, 10% for fashion products, 8%
- Complicated registration procedures as
for others.
sellers have to complete Lazada’s online
- Trusted by customers because of the
course, provide personal information and
site’s customer protection policy
enterprise registration certificate
- Outstanding customer service
- Strict policies that focus on the interests
of buyers, making it difficult for
businesses to scale up. Therefore, Lazada
is solely a sales channel for businesses.
MAJOR E-COMMERCE
PLATFORMS IN VIETNAM
Tiki:
Starting as an online website for selling books and stationery, Tiki has now become one of the leading e-commerce
sites in Vietnam. With a meticulous product inspection process and a professional logistics system, Tiki has become
Vietnamese consumers’ most reliable brand. Tiki’s two major investors are Vietnam’s VNG and China’s JD.com.
Advantages Disadvantages
- The strict registration process that
-Products are thoroughly verified for
requires sellers to provide personal
origin and quality
information and enterprise registration
- Customers have high shopping
certificate
confidence in Tiki
- Limited products compared to other
- Specialized print and electronic products
platforms
- Low rate of order return (less than 1%)
- Long delivery time with standard orders
- Express shipping service with shipping
- Several management fees such as
subsidies
payment fees, commission, pickup fees,
etc.
TOP BRANDS IMAGE
Shopee is associated with fun, exciting, youth image. Tiki is good with premium and trustful image.
Tiki 36 44 55 64 46 44
Shopee 63 63 33 42 62 40
Lazada 29 32 32 36 33 43
Fun Exciting Premium Trustful Youth Adult
Source: Q&Me
REGULATIONS
On 18 May 2020, the Ministry of Industrial and Trade (MOIT) called for public opinion on
the draft proposal ("Proposal") to the government on proposed amendments to Decree
52/2013/ND-CP on e-commerce service ("Decree 52").
Some of the proposals can be found below:
New regulations applicable to cross-border service
The Proposal introduces new and stringent regulations on the operation of e-commerce
services involving foreign elements, including companies providing cross-border e-
commerce services, B2C e-commerce platforms having foreign merchants, and offshore
merchants.
First, the Proposal requires the following offshore companies to comply with Vietnamese
regulation on export and import rights, consumer protection, data privacy, goods
qualification and other applicable laws and regulations:
• having an e-commerce website with a Vietnamese domain name;
• having an e-commerce website or application in the Vietnamese language; or
• selling goods on a Vietnamese e-commerce website.
Second, the Proposal requires offshore companies with an e-commerce website with a
Vietnamese domain name or with an e-commerce website or application in the Vietnamese
language to implement notification procedures to the Vietnamese authorities and identify
its authorized entity in Vietnam. The Proposal does not provide any specific details about
the notification procedures at this stage. The authorized entity will fulfill the obligations to
state authorities and handle disputes/problems with Vietnamese consumers.
Third, under the Proposal, offshore merchants must provide and publicize their information
on the selling booths on e-commerce exchange platforms. This information must include
the name, address, business registration details, and contact points. The name of foreign
merchants must be translated or transcribed in Vietnamese.
Finally, under the Proposal, the MOIT sets out new obligations for B2C e-commerce
platforms offering ordering and online payment services with regards to their foreign
merchants:
• With a separate place on its platform to list all foreign merchants (and individual foreign
merchants are not allowed on these platforms)
• Responsible for the goods offered by offshore merchants and must implement procedures
about international contractor tax for those overseas merchants
ADVANTAGES & DISADVANTAGES
Rising Income Lack of Trust
Domestic and international traders using e-
According to the annual Salary Trends Report
commerce to cheat, sell counterfeit goods,
Vietnam ranks second in the world for real
infringe intellectual property rights, and even
salary increases in 2020, thanks to low
trade banned goods have reached an alarming
inflation and rising productivity. Moreover, the
level. Online fraud such as theft of
average real salary increase for workers in
information, data, and bank accounts has put
Vietnam in 2020 is projected to be 5.1 percent,
e- commerce under the spotlight, further
up from 4 percent in 2019.
impacting the growth of a strong and healthy
digital economy. These unsafe online
transactions have made consumers wary of
making online purchases.
Government
Initiatives Predominant of
COD method
o Vietnam has set a target that the e- Despite its growing e-commerce market, the e-
commerce industry will grow by 25 per cent payment ecosystem in Vietnam is rather
per year to reach US$35 billion with more than inadequate. Vietnam is still a cash-based
half of the population shopping online by the society and Vietnamese consumers generally
end of 2025. distrust financial institutions when it comes to
o The goals were highlighted in the master securing, saving and transferring their money.
plan for national e-commerce development in For that reason, credit cards and online banking
2021-25. are not widely used. Moreover, many
o Specifically, the Government has set targets consumers see credit card and online banking
that 55 per cent of the country’s population transaction fees as unnecessary costs. Such fees
will do online shopping by the end of 2025 and may also discourage large transactions.
the average spending for online shopping will
be about US$600 per person per year.
o Business-to-consumer (B2C) e-commerce of
goods and services will grow 25 per cent per
year to reach US$35 billion, accounting for 10
per cent of the country’s total retail sales of
goods and services .
Digital Lack of Legal
Transformation Framework
o According to the e-Conomy Southeast Asia o The relatively new and rapidly growing e-
Report 2019 released by Google, Temasek and commerce sector has posed challenges to the
US-based global management consultancy government’s ability to create a conducive legal
Bain, Vietnam is evolving into one of the most and policy framework. The legal guidelines in
digitalised of all economies in the ASEAN. As this area are not sufficiently comprehensive
the second fastest-growing digital economy in and robust, especially those related to cross-
the region after Indonesia, its value is expected border e-commerce.
to almost quadruple from US$12 billion o Although many legal documents have
currently to US$43 billion in 2025. included provisions on the protection of
o Vietnam is also the economy with the third personal information, the illegal collection,
highest digital funding in the ASEAN after use, distribution, and trading of personal
Indonesia and Singapore, raising almost US$1 information still happens.
billion in digital economy funding since 2015. o The government also faces challenges in
administering taxes on e- commerce activities.
REFERECENCES
<1> Baker McKenzie. (2020). Vietnam: Vietnam aims to boost e-commerce activities, and
update e-commerce regulations. LEXOLOGY.
https://www.lexology.com/library/detail.aspx?g=6db212ca-aca1-4225-8acc-
908e6f2ca851
<2> E-commerce targets to grow 25 per cent per year, more than half of population to
shop online by 2025. (2020). Việt Nam News. https://vietnamnews.vn/economy/716915/e-
commerce-targets-to-grow-25-per-cent-per-year-more-than-half-of-population-to-
shop-online-by-2025.html
<3> EVBN. (2018). E-COMMERCEINDUSTRYIN VIETNAM. http://www.ukabc.org.uk/wp-
content/uploads/2018/09/EVBN-Report-E-commerce-Final-Update-180622.pdf
Kemp, S. (2020, February 18). Digital 2020: Vietnam [Slides]. DATAREPORTAL.
https://datareportal.com/reports/digital-2020-vietnam
<4> Q&Me. (2020). Vietnam EC market 2020. https://qandme.net/en/report/vietnam-ec-
market-2019-2020.html
<5> The World Bank in Vietnam. (n.d.). The World Bank.
https://www.worldbank.org/en/country/vietnam/overview
<6> Top E-commerce platforms in Vietnam to sell cross-border. (n.d.). BOXME.
https://blog.boxme.asia/top-e-commerce-platforms-in-vietnam/
<7> Vietnam takes a leap in digital transformation with foreign participation. (2020).
Vietnamnet Global. https://vietnamnet.vn/en/feature/vietnam-takes-a-leap-in-digital-
transformation-with-foreign-participation-606524.html
<8> Vietnam’s Booming E-Commerce Market – Analysis. (2020). SSI.
https://www.ssi.com.vn/index.php/en/individual-customer/economic/news/518713
<9> What e-commerce marketplaces in Vietnam look like in 2020? (2020). VIETNAM
INSIDER. https://vietnaminsider.vn/what-e-commerce-marketplaces-in-vietnam-look-
like-in-2020/
