Vietnam's E-commerce Market To Reach $13.1 Bn In 2020: Study
COVID-19 triggered the fear of contamination and has resulted in change in consumer buying behavior
Vietnam is one of the fastest-growing e-commerce markets in the Asia-Pacific region, driven by a young population, a growing middle class, growing Internet penetration, and rising smartphone penetration. The COVID-19 pandemic and the subsequent social distancing measures have further accelerated e-commerce growth. As a result, e-commerce sales in the country are set to grow by 30.3 per cent to reach $13.1 billion in 2020, according to a study done by data and analytics company GlobalData.
The analysis reveals that e-commerce sales are expected to increase at a compounded annual growth rate (CAGR) of 18.8 per cent between 2020 and 2024 to reach $26.1 billion in 2024.
“The COVID-19, which triggered the fear of contamination, has resulted in a change in consumer buying behavior. Shopping centers are being avoided to a large extent and instead, consumers are opting for the comfort and security of online platforms for their day-to-day purchases. The accessibility of products online, during the COVID-19 pandemic, has not only increased online sales but also converted several offline shoppers to online,” commented Kartik Challa, payments senior analyst, GlobalData.
Vietnam is also taking initiatives to boost e-commerce sales in the country. In May 2020, it approved a five-year National E-commerce Development Plan for 2021–25. The plan focuses on accelerating the local e-commerce market with a focus on improving consumer awareness, infrastructure, and related support services.
Furthermore, e-commerce sales are being driven by various events such as Singles’ Day sales conducted by e-commerce companies across Vietnam.
“While the traditional payment methods such as cash, cards, and bank transfers are still widely used for e-commerce purchases, the use of alternative payments is on the rise. Alternative payment solutions like PayPal, MoMo, and NganLuong are gradually gaining ground with these three collectively accounting for 13.8 per cent share in 2020,” Challa concluded.