Global Investors Choose Vietnam as Optimal Investment Destination

Despite facing economic hardship, Vietnam's e-commerce market has proven to be a beacon of stability and one of the most rapidly expanding sectors in the first half of 2023.

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The e-commerce market in Vietnam continues to experience steady growth, unaffected by the global economic slowdown. The Covid-19 pandemic has even spurred a new wave of online business, and young consumers have embraced e-commerce like never before.

According to a report by Google’s e-Conomy SEA 2022, Vietnam is one of the top three countries attracting investors in the e-commerce field, with a potential market worth $32 billion by 2025.

This presents great opportunities for marketing and payment technology platforms. Xtend, a retargeting platform built on AI (artificial intelligence) based in Singapore, is one such platform. Xtend supports platforms like Tokopedia and Lazada and has recently partnered with Tyroo to provide a comprehensive solution for businesses looking to improve their return on investment (ROI).

The Vietnam E-commerce Association estimates that in 2022, retail e-commerce transactions will account for approximately 8.5% of total retail sales of consumer goods and services. Online retail sales of goods are also expected to reach 7.2% of total retail sales in 2022, up from 6.7% in 2021.

Illustrative photo (Source: thoibaonganhang.vn)
Illustrative photo (Source: thoibaonganhang.vn)

In 2023, despite challenges in the first half of the year, the e-commerce market has remained one of the fastest-growing and most stable economic sectors. Business activities on online platforms and social networks have become the highlights of Vietnam’s e-commerce sector. A survey reveals that 65% of businesses have implemented business activities on social networks.

The number of employees using tools like Zalo, WhatsApp, Viber, and Messenger has also continued to increase. For instance, ZaloPay has seen a 35% growth in payment via QR code compared to the previous year, with 11.5 million active users in 2022.

“The number of merchants using QR code payment has grown significantly, and we expect ZaloPay’s scale to grow further with the newly launched 2-in-1 QR solution,” emphasized Le Lan Chi, ZaloPay’s CEO. ZaloPay’s QR system currently covers 237 chain stores, with 65% being food service stores, and the remaining 35% as retail services, and marketing campaigns are being conducted to promote user awareness of 2-in-1 QR codes.

Apple Pay was recently launched in Vietnam, reflecting the increasing presence of Apple in the country. Vietnamese consumers have shown a preference for cashless payments, with 90% of those surveyed making cashless payments in 2022, up from 77% in 2021. The launch of Apple Pay indicates the growing importance of Vietnam’s e-commerce market.

“Apple Pay being used in Vietnam demonstrates the significance of the market for the development of the Apple ecosystem, which focuses on both online and offline shopping,” shared Nguyen The Kha, Commercial Director of FPT Shop.

E-commerce has become a major sector in Vietnam’s digital economy. Lazada’s e-commerce report in 2023 predicts that if Vietnam’s digital economy reaches $49 billion by 2025, the e-commerce sector will account for over 65% of that figure, with $32 billion in revenue.

Vietnam E-commerce Index 2022 Report. Source: Vietnam
Vietnam E-commerce Index 2022 Report. Source: TTXVN

However, there is an uneven development in the e-commerce sector, with a significant disparity between Hanoi, Ho Chi Minh City, and other provinces. The infrastructure and human resources index, measured based on three indicators – Infrastructure and human resources, Business-to-consumer (B2C), and Business-to-business (B2B) – shows a significant difference.

A survey by VECOM reveals that in 2021, 64% of enterprises prioritize recruiting personnel with skills in information technology and e-commerce. Large corporations show a higher preference for this issue, with more than 79% prioritizing such skills.

On the other hand, SMEs are actively collaborating with third parties to improve and integrate software solutions. For example, Zoho has experienced 45% growth since its introduction to Vietnam, highlighting the rising demand for software solutions in the e-commerce and digital economy sector. Vietnam is seen as a key market for the adoption of new technologies in business activities.

Phuong Nguyen