Tiki, Thegioididong and Sendo are Vietnamese e-commerce platforms that were included among the ten most visited sites in Southeast Asia. According to iPrice, these three websites are ranked sixth, seventh, eighth, respectively, based on average monthly website traffic. Thegioididong was the only e-commerce platform in the top ten focusing on one product category only, that is electronic devices. Despite the narrow business scope, Thegioididong managed to capture an average of 29 million visits per month. As for Tiki and Sendo, they were able to acquire a significant amount of foreign funding. Tiki received investment form from JD.com at the beginning of 2018. While Sendo also received USD 51 million from the Japanese SBI Holdings and other investors.
Vietnam's e-commerce market is projected to reach USD 15 billion in 2020, surpassing the previous revenue forecast of USD 10 billion. E-commerce industry in the country has 35% of annual average growth, positioning Vietnam as one of the countries with fastest e-commerce growth in the world. Director of the E-Commerce and Information technology under the Ministry of Industry and Trade, Dang Hoang Hai, stated that the retail sales from e-commerce acquired USD 8 billion in 2018, higher than the expected USD 7 billion.
Rapid Growth of E-Commerce in the Capital
Ho Chi Minh City, the capital of VIetnam, has a promising future in e-commerce industries, supported by the increasing demand of technology innovation across the world. According to our latest report, “Top E-Commerce Cities in Asia”, Ho Chi Minh is among top e-commerce cities in Asia, along with other cities in the region, including Seoul, Bangkok, Tokyo, and many more. The city’s market is adapting at a fast pace towards digitalization, measured by 87% internet penetration rate and 81% digital banking penetration rate in its 13 million population. Adding to that, the acceleration of the e-commerce industry is obvious and opportunities for the 26 billion retail market are vast in the city.
This growth has been supported by the government through its initiative in developing e-commerce master plan which comprises a comprehensive legal framework for all e-commerce activities, national e-commerce payment system & integrated e-payment solutions. In terms of its demography, the market is seeing an increase in young population with high level of telecommunication and financial technology adoption. Adding to that, Ho Chi Minh City has witnessed rapid growth of middle to affluent class, which are key targets in the expansion the e-commerce market, particularly Ho Chi Minh City's retail market - of which market saturation is still low, offering great potentials for new players.
Despite the opportunities, Ho Chi Minh City still faces challenges coming from issues of trust, whether it's data privacy and security, or wanting to verify an e-commerce product before paying. In turn, this affects product quality, customer service, data protection, and ultimately causes unfulfilled product delivery. Due to this condition, cash on delivery is still the preferred payment system. On top of that, the underdeveloped infrastructure, be it offline and online, may push the cost of logistic further and eventually slow the growth of e-commerce market expansion in the city.
Download the full report on Top E-Commerce Cities in Asia.