Under the “Future of E-commerce in FMCG” report published recently, Kantar Worldpanel, the global expert in shoppers’ behavior, said that Vietnam’s e-commerce, though small in size, is among top growing e-commerce markets globally.

The report said that in terms of absolute value growth, the top six contributors are all leading power economies, led by China and the US. However, the online grocery sector is also expanding into new markets including Vietnam. The value growth in Vietnam where e-commerce is in early stages is 69 percent.
 

More Vietnamese consumers prefer to buy fast moving consumer goods online.

In Vietnam, e-commerce channel has evolved thanks to booming internet usage and smartphone ownership along with massive investment of key retail players, and now takes 0.5 percent of the FMCG market in Vietnam’s four key urban cities of Hanoi, Ho Chi Minh Ciy, Da Nang and Can Tho. The percentage of e-commerce shoppers grew from 5.4 percent to 8.8 percent of urban 4 cities population in the last year alone, and an online trip size is at triple value of an offline basket.

“Although the size of Vietnam e-commerce market is still small compared to other formats, it holds a strong potential because the value growth of e-commerce within FMCG is up to 69 percent, which makes Vietnam become one of the countries with the highest e-commerce growth rate in the world,” David Anjoubault, General Manager of Kantar Worldpanel Vietnam, said.

“It’s now the critical time for investors to enter this promising market, while current retail giants should gradually move their offer online and take advantage of their brand equity with omni-channels strategy, to be successful and to defend their current position. On the whole, consumer trust and high logistics cost for delivery model are major challenges that need to be addressed by businesses in order to move Vietnam e-commerce forward,” he said.

The study also shows that e-commerce now accounts for 4.6 percent of all FMCG sales globally. Whilst the e-commerce channel is growing, the FMCG market as a whole is sluggish, increasing just 1.3 percent during the same period. E-commerce now contributes to a record 36 percent of global FMCG growth and will continue to outpace growth in offline FMCG retail.

“Our projections show that in 2025, online FMCG will be a US$170 billion-dollar business and hold a 10 percent market share” says Stéphane Roger, Global Shopper and Retail Director at Kantar Worldpanel.

The big global uplift will come from the United States, predicted to rise from a 1.5 percent e-commerce share in 2017 to 8 percent in 2025. This can be attributed to the successful rollout of click and collect, delivery and subscription models, and the acceleration of disruptive models.
South Korea and China will continue to lead the way and Asia in general remains at the cutting edge of online adoption.

Vietnam e-commerce specifically, is expected to expand from 0.5 percent to 2.2 percent share in 2025 coupled with the rise of digitization.