Vietnam can be truly called a land of opportunity for domestic and foreign e-commerce companies. Its young population, high Internet penetration rate and rising smartphone penetration rates play the key role here, making the country one of the most promising for e-commerce activities in the region.
South-East Asia’s Surge in E-commerce
According to the report Asia-Pacific B2C E-Commerce Market, over one half of total global online retail sales happens in the Asia-Pacific region. Based on the analyses it is concluded that over 50% of all the online shopping for retail goods and services takes place in the Asia Pacific region, and South-East Asia accounts for about 40% of the e-commerce market of the region.
Southeast Asia is definitely a new big e-commerce hit, and the region is currently a very attractive market for big players involved globally in the e-commerce sector and smaller local companies. At a reflection point of Internet penetration and mobile devices rapid spread, the population of Southeast Asia is quickly adapting its behaviors to take advantage of new purchasing products and services online opportunities.
According to the latest e-Conomy Southeast Asia 2018 report from Google and Singapore-based Temasek, the digital economy in Southeast Asia is on track to hit $240 billion by 2025, which is $40 billion more than previous estimates. The key factors are the most engaged mobile internet users in the world, as well as industries like ecommerce, online media, online travel and ride-sharing, which grew at never-before-seen rates.
Flourishing Market
There are currently 35.4 million e-commerce users in Vietnam, with an additional 6.6 million users to be shopping online by 2021. These 42 million e-commerce users will represent 58% of the total population. That’s why there is no wonder that throughout the last 5 years Vietnam is showing a constant rise in percentage of online shopping transactions.
E-commerce market value in Vietnam from 2014 to 2020 (in billion U.S. dollars)
Vietnam e-commerce Association (VECOM) reported that Vietnam’s e-commerce
growth rate of some specific areas is explosive. For the online retail area, information from thousands of e-commerce websites showed that revenue growth rate in 2017 increased by 35%. For the payment area, the national Payment Corporation of Vietnam (NAPAS), in 2017, the volume of online domestic card transactions increased about 50% compared to 2016, while transaction value increased to 75%. For the online marketing area, the growth rate of some affiliate marketing companies in 2017 reached from 100% -200%.
Vietnam’s e-commerce market has witnessed high growth rate since 2013, with online sales increasing from US$2.2 billion in 2013 to US$6.2 billion in 2017, averaging an annual growth rate of 20%. Little surprise there, as affiliate marketing sales constituted about 15% of the total sales, which sounds quite intriguing. About 80% of local brands rely on affiliate programs.
The most popular products sold online included clothing, footwear and domestic (59%), electronic devices (47%), and household appliances (47%), among others, while payment and delivery methods have been used flexibly by enterprises.
Moreover, the government has stepped in to try and usher in a new era of commerce. Vietnam’s legal framework and policies, especially Decree No.52 on e-commerce, have played a key role in creating favorable conditions for high growth rate of the retail e-commerce market.
The decree aims to ensure fairness between e-commerce and traditional commerce, of which enterprises operating in e-commerce must comply with laws and regulations in equal to that of traditional one.
Local Players Hit It Big
Vietnamese e-commerce platforms Tiki, Thegioididong and Sendo entered the list of ten most visited sites in Southeast Asia by iPrice Group. Tiki, Thegioididong and Sendo ranked sixth, seventh and eighth, respectively, by average monthly web traffic. The top two leading positions took international corporations Lazada and Shopee, respectively.
According to iPrice’s data on the Vietnamese market, Tiki, Thegioididong and Sendo made huge improvements in 2018 leading to attracting both user traffic and investment.
Tiki is the fastest-growing retail company in Vietnam and has all the chances to be an industry winner. Their monthly website traffic increased by 80% within only six months, which took them from the fourth highest position among e-commerce websites in Vietnam to second place by December and the first place by monthly visits in April 2019, leaving international corporation Lazada on the second place.
Similarly, Sendo.vn also grew by 55% in monthly website traffic within a period of six months and maintained a healthy fifth place in Vietnam, one rank behind Thegioididong. No wonder, it’s affiliate program is also one of the most rewarding in terms of revenue for the publishers.
The most surprising entry to this list was Thegioididong. With focus on only one product category – electronic devices, the retail company still managed to gain an average of 29 million visits per month, according to the report.
Although the leaders of the market are still Lazada and Shopee, which operate successfully in multiple markets, the three Vietnamese e-commerce companies’ inclusion is very remarkable, and is definitely a strong evidence of the size and potential of e-commerce in Vietnam.
Affiliate Marketing Opportunities
E-commerce success brings also a bunch of great affiliate-marketing offers. Sendo is definitely one of the most attractive ones. Up to now, more than 80,000 shops have been operating on Sendo.vn, offering a diverse range of products with over 5 million products from clothes to tech accessories. In 2018, Sendo.vn, the e-commerce subsidiary of FPT Corporation, also received $51 million from the Japanese SBI Holdings and other investors. After several effective improvements backed by investments, it is not hard to assume the retail will keep growing for sure.
Besides from solely local market players, big international companies such as Lazada or Shopee are definitely still in the top in terms of revenue.
Lazada is the pioneer e-commerce store in Southeast Asia. Present in Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam it brings over 135,000 local and international sellers and more than 3000 brands online to serve more than 560 million customers which are increasing by the day. To counter Shopee’s expansion in Southeast Asia, Alibaba decided to invest another US$2 billion in Lazada to improve the company’s competitiveness, which actually gained the goal.
Anyone who wants to eat a piece of pie and promote the Vientamese e-commerce giants like Lazada, Shopee, and Sendo, can join their official affiliate programs at Indoleads.com, one of the leading affiliate networks in Asia-Pacific.
Investing paradise
Vietnam is a true hotspot for investors from around the world. The burgeoning eCommerce market in Vietnam has attracted major investors from Japan, Germany, the United States, Korea, China, and Singapore. With six companies invested in Vietnam’s eCommerce market (BEENOS, CyberAgent Ventures, econtext Asia, SBI Holdings, Sumitomo Corporation, Trancosmos), Japan tops the list of foreign countries with the highest number of investors in Vietnam. In 2017, Japan invested a total of $9.1 billion in Vietnam, taking over Korea ($8.5 billion) and ranked as the largest foreign direct investment (FDI) country in Vietnam. The largest investors in Vietnam’s eCommerce market also include tech giants, venture capital firms and investment companies such as Alibaba, Tencent, Temasek Holdings, Dragon Capital and IDG Ventures Vietnam. Besides, Germany and the US are two countries outside of Asia that are actively invested in Vietnam’s eCommerce market.
Forecasts
With an explosive 33% compounded annual growth rate over the past two years, Vietnam ranks high among the fastest-growing e-commerce markets in the region. Its market has a great potential and it has already proved it within the last couple of years, so there is definitely no point in being skeptical. Based in the US Frost & Sullivan consulting firm forecasted that the E-Commerce market in Vietnam will reach a value of $3.7 billion by 2030. According to the Department of E-Commerce and Digital Economy, by 2020 an average online spending per person will reach US$350 annually.
This e-commerce surge might be a great opportunity for many international and local players, as well as affiliate marketers. Indoleads.com, one of the leading affiliate platforms in South-East Asia, has an access to 500+ direct affiliate programs from over 60 countries around the globe that opens up a geography for local players to Asian, Brazil, US, UK markets.
The key point of success of such worldwide e-commerce leaders like Zalora, Americanas, Amazon, Shein, Ssence, AliExpress, Lazada, Shein, Tokopedia, is affiliate sales. Register at Indoleads.com as a publisher to be a part of these top affiliate programs.