Vietnam: One of countries with world’s highest e-commerce growth rate
Despite the e-commerce in Vietnam is in early stage, but there has been significant value growth of 69% in 2016 through the development of internet.
According to the report of the Future of E-commerce in Fast-moving consumer goods (FMCG) released by Kantar Worldpanel, sales of groceries through e-commerce platforms grew by 30% in the 12 months to March 2017, with significant value growth in Thailand (+104%), Malaysia (+88%) and Vietnam (+69%) where e-commerce is in early stages. A continent of tech-savvy consumers and avant-garde retailers like Alibaba, has made Asia a natural home for e-commerce growth.
It is estmiated that by 2025, online FMCG will be a USD 170 billion-dollar business.
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Global growth of E-commerce will mainly come from the US, which the market share in E-commerce will increase from 1.5% in 2017 to 8% in 2025 representing a $90 billion US dollar business. This can be attributed to the promising rollout of click-and-collect, delivery and subscription models.
In terms of absolute value growth, the top six contributors are all leading power economies, led by China and the US. The other top performing countries are South Korea, the UK, Japan and France. Last year, value increased by 52% in China, 41% in South Korea, 8% in the UK, 7% in France and 5% in Japan and in the US.
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% of the FMCG market in 4 key urban cities of Vietnam. The percentage of e-commerce shoppers grew from 5.4% to 8.8% of urban 4 cities population in the last year alone, and an online trip size is at triple value of an offline basket.
David Anjoubault - General Manager of Kantar Worldpanel Vietnam commented: “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%, which makes Vietnam become one of the countries with the highest e-commerce growth rate in the world. It’s now the critical time for investors to enter this promising market, while current retail giants should gradually move their offer online & 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”.
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% to 2.2% share in 2025 coupled with the rise of digitization.
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