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DIGITAL 2019 SPOTLIGHT:

ECOMMERCE IN VIETNAM
1 8 S E P T EMB ER 2019 · S IMON KEMP & S ARAH MO EY

Our latest research shows that there are now 59 million internet users
in Vietnam, while !"#$%"&'$()*'+ reports that 78 percent of
Vietnamese internet users aged between 16 and 64 already shop
online.

Statista puts the number of Vietnamese ecommerce shoppers even

higher. The company’s ,-.-/%"01%23'/045/"##3 (DMO) study found
that almost 50 million people in Vietnam bought consumer goods online
in 2018, spending a combined USD $2.2 billion.

The average ecommerce revenue per user is still relatively low, though.
Vietnamese shoppers spent an average of just US$46 each on
consumer goods over the course of last year, although this figure doesn’t
include spending on travel or digital media purchases.

However, the good news is that Vietnam saw strong growth in online
spend in 2018, with the value of online consumer goods purchases
increasing by almost 30 percent compared to 2017.

You can explore the country’s broader digital landscape in our complete
,-.-/%"067890:-'/)%; report below, but read on for a closer look at all
the latest ecommerce data and insights.

! 1 of 75 "

Note: this article contains a number of updates to statistics featured in

the report above. Also note that some of our data providers have
recently changed their reporting methodologies, so some of the figures
we reference in this article will not be directly comparable to figures
published in the report embedded above, especially for internet and
social media users.

Ecommerce in Vietnam
Consumers in Vietnam spent roughly US$6 billion on online purchases
in 2018, more than US$1 billion higher than the total for the previous
year.

Travel purchases made up the majority of total spend (59 percent), with
Vietnam’s e-travel sector worth close to US$3.5 billion in 2018.

However, consumer goods generated 38 percent of the country’s

ecommerce value, with 2018 sales of products like electronics, fashion,
toys, and groceries totalling more than US$2.2 billion.

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Within the consumer goods sector, electronics purchases account for the
greatest share of value, although purchases of fashion and beauty
products aren’t too far behind.

Vietnamese internet users are less likely to pay for digital content,
however, with Statista’s DMO data indicating that the digital music
sector is particularly weak.

Vietnamese people spent just US$21 million on music downloads and

streaming services last year, equating to an average revenue per user of
just over US$1.

Vietnam’s internet economy is enjoying strong growth, however, with

overall market value increasing by more than 20 percent last year.

Perhaps unsurprisingly given that it already accounts for such a large

share of the market, the travel sector is growing more slowly than the
broader market, with 2018 sales up just 16 percent compared to 2017.

However, the value of consumer goods purchases grew by 29 percent

year-on-year, with the Food & Personal Care and Toys, Hobbies & DIY
categories both enjoying growth rates in excess of 30 percent.

Furthermore, Statista’s data indicate that Vietnam is one of the three

fastest-growing online grocery markets in the world, with category sales
value up an impressive 38 percent between 2017 and 2018.

This isn’t just good news for the country’s online grocery retailers, either.
As we explored in a <2'=-#5>0%2/-?"' in this series, many people shop
for grocery items on a regular basis, and as an increasing share of this
activity moves online, shoppers become increasingly familiar with online
shopping.

Provided these regular grocery experiences remain positive, this

increased familiarity should drive greater confidence in online shopping
as a whole, which in turn may lead to increased ecommerce activity
across all categories.

Given the potential significance of the grocery category for the country’s
ecommerce industry as a whole, we’ll take a closer look at Vietnam’s
online grocery sector in a dedicated section later in this article.

Top ecommerce retailers in Vietnam

As we’ve seen across most of the #/@'20?#5)/2-'> in Southeast Asia,
A@#<'' and B%C%*% dominate Vietnam’s ecommerce landscape.

Shopee comes out top in both D<<0D))-'’s ranking of the country’s top
mobile shopping apps, and A-;-"%2&'$’s ranking of the country’s top
transactional websites by number of visits.

SimilarWeb’s data suggest that Shopee’s Vietnamese website attracted

an average of 34 million visits per month between June and August
2019, compared to roughly 24 million visits a month to Lazada’s local
site.

Meanwhile, local platform E-3-F=) comes out in the top three rankings
for both website traffic and mobile web use, with the company’s website
attracting an average of 27 million visits per month over the past three
months – 3 million more than Lazada’s local site.

D;%C#)’s global offerings also appear in both the mobile app and
website rankings, but SimilarWeb’s free data doesn’t break out the
global site’s traffic by country.

Interestingly, however, it appears that Vietnamese shoppers’ platform

preferences vary depending on which device they’re using.

Local platform D*%G2#- is one of Vietnam’s top five mobile shopping

apps, but the company’s website doesn’t place in SimilarWeb’s ranking
of the country’s top ten transactional websites.

Conversely, local players /@'.-#-*-*#).F?#;, ?@#/#/F?#;, and

*-');%G+%)@F?#; all rank in the country’s top transactional websites,
but don’t appear in App Annie’s ranking of the country’s top mobile
shopping apps.

Online grocery in Vietnam

Statsita’s DMO data show that food and personal care items accounted
for the smallest share of Vietnam’s online consumer goods market in
2018, but with sales increasing at a rate of close to 40 percent per year,
that may soon change.

Grocery research specialists IGD Asia <2'*-?/ even more rapid growth
for the country’s online grocery sector, with the company’s forecasts
suggesting that sector spending will double every year between 2017
and 2022.

Despite this impressive growth, however, online shopping will still only
account for a small share of Vietnam’s total grocery market, and IGD
Asia forecasts that ecommerce will still account for less than 0.5 percent
of total category spending by 2022.

However, this may still be cause for optimism amongst retailers

exploring the potential of the Vietnamese market, as this low base
suggests there is plenty of scope for continued strong growth throughout
the next decade.

For context, the US$348 million that Vietnam’s ecommerce shoppers

spent on online grocery in 2018 accounted for roughly 0.6 percent of
the country’s total grocery market of HAIJK0$-""-#).

Online grocery in Vietnam: key players

A@#<'' comes out top of both App Annie’s and SimilarWeb’s current
ranking of ecommerce players in the country, but it’s unclear what share
of the platform’s revenues relate to grocery-specific purchases.

It’s a similar story for E-3-F=) and B%C%*%, who hold second and third
places in both rankings (although they swap places between the lists).
Both sites offer a range of grocery items, but the extent to which these
offerings contribute to either site’s overall success is unclear.

A''0%">#L E#<0M?#;;'2?'0N%/'.#2-'>0-)0A#5/@'%>/0D>-% – a
closer look at what consumers across the region are buying, and
where the latest trends are heading.

SimilarWeb’s data suggest that online supermarkets B#//' and OP?@0

Q#P0RDSQ both attract more than 1 million visits each month, while
S#TF=) – a food delivery service which also offers a range of grocery
items – sees an average of roughly 3.5 million monthly visits.

Meanwhile, App Annie ranks Lotte’s mobile app in Vietnam’s top ten
shopping apps, which has particular significance for the potential of the
country’s online grocery category.

All of these findings point to the fact that there is growing interest in
online grocery shopping in Vietnam, even if that interest hasn’t yet
converted into significant sales value.

Barriers to ecommerce growth in Vietnam

The United Nations 2'<#2/> that just over one-third of the country’s
residents live in urban areas, with the majority of the population still
dispersed across rural areas.

This population dispersal may make it more difficult and expensive to

scale fast delivery across the country, which could have particular
consequences for Vietnam’s online grocery sector.

As we’ve seen across many of the other Southeast-Asian nations in this

series, payments are also an important consideration in Vietnam, with
the country experiencing some of the lowest levels of credit card
penetration across the world’s larger economies.

Barely 1 in 25 adults in Vietnam aged 15 and above #T)> a credit card

today, while less than 1 in 3 has a bank account.

However, consistent with a trend we’ve seen across many of the

country’s Southeast-Asian neighbours, people in Vietnam have been
quicker to adopt mobile wallets.

Research from GlobalWebIndex finds that close to 40 percent of internet

users in Vietnam already use a mobile payment service each month,
putting the country ahead of the global average.

Ecommerce outlook: Vietnam

Trends in recent data suggest that Vietnam should experience meaningful
growth in the value of its ecommerce industry in the coming months.

However, with the country starting from a relatively small base, there’s
still some way to go before online retail accounts for a meaningful share
of total consumer spending in Vietnam.

How does that compare to countries across the rest of Southeast Asia?
Find out in our ?#;<"'/'0?#""'?/-#) of articles in this series.

Looking for more data on Vietnam? Check out all of our previous
country reports by clicking here.

ABOUT THE AUTHORS

A(14S0UM1V
N"-?30@'2' to see all of Simon's articles, read his
bio, and connect with him on social media.

SARAH MOEY
N"-?30@'2' to see all of Sarah's articles, read
her bio, and connect with her on social media.

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