Vietnam is similar to China more than a decade ago, and its consumption habits are also very similar. Consumers pay more attention to prices and the practicality of goods. Generally, they use bank transfer and cash on delivery as two payment methods. Installment payment is also a popular payment method. On major e-commerce platforms in Vietnam, nearly half of the sellers will provide installment payment services, which greatly promotes the development of e-commerce.
Vietnam’s e-commerce development potential
In 2015, Vietnam’s e-commerce market size was about US$4 billion. With three years of rapid development, the country’s e-commerce market size has reached about US$7.8 billion in 2018. If the growth rate continues to remain at 30% between 2019 and 2020, Vietnam’s e-commerce market size will reach US$13 billion by 2020.
1. Young people – the main force of online shopping
According to the 2018 Global Digital Report by We Are Social and Hootsuite, Vietnam has a population of about 95 million, 64 million Vietnamese are online, and the Internet penetration rate has reached 67%, of which 57 million are active social media users, with a penetration rate of 57%. Vietnam currently does not have a mature credit card, mobile payment method and logistics system, but this is an opportunity. Vietnamese young people are the most sensitive group of people in Southeast Asia to the use of mobile devices, and the average Internet usage time of Vietnamese consumers is therefore higher than that of neighboring countries.
2. Internet penetration rate
The rapid increase in smartphone users in Vietnam has also provided convenient conditions for promoting the development of e-commerce. At present, the average annual consumption of each Internet user in Vietnam is about US$160. In Vietnam, people use the Internet for 24.7 hours per week after get off work, which is comparable to the Philippines and only slightly shorter than Singapore’s 25.9 hours among neighboring countries.
3. Increased proportion of electronic payments
In terms of electronic payments, according to statistics from the Vietnam National Clearing Joint Stock Company (NAPAS), in 2017, the volume of online transactions using ATM cards in Vietnam increased by 50% compared with 2016, and the transaction amount increased by 75%. However, it is worth noting that cash on delivery is still the preferred payment method for Vietnamese people.