The Vietnamese government targets around 55% of the population to shop online with an average spend of US$600 annually by 2025.

Illustrative photo.

According to a government’s plan for the development of e-commerce by 2025 released on May 18, revenue from online sales of business-to-consumer e-commerce, known as B2C e-commerce, is set to grow by 25% per year to US$35 billion, accounting for 10% of total goods retail sales and service revenues.

Meanwhile, the government expects the rate of population using related services, including non-cash payment services, at 50%, and through intermediary payment services at 80%.

The plan aims to keep delivery costs at around 10% of product prices in e-commerce.

By 2025, 80% of e-commerce websites should be integrated with online shopping and 70% providing e-invoices.

Notably, Hanoi and Ho Chi Minh City would make up half of e-commerce revenues in the next five years.

The government envisions half of the country’s small and medium enterprises providing online shopping services (including via social networks); 40% having mobile apps; 70% providers of electricity, water, telecommunications and media services having e-contracts with customers.

Data and analytics firm Global Data forecast Vietnam’s e-commerce market to surpass VND399.5 trillion (US$17.3 billion) in 2023 from VND218.3 trillion (US$9.4 billion) in 2019, representing a compound annual growth rate (CAGR) of 16.3%.

According to GlobalData’s 2019 Banking and Payments Survey, cash is still the most preferred payment mode for e-commerce purchases in Vietnam, accounting for 35.6% in 2019. Alternative payment solutions are gradually gaining ground and accounting for 15.5% share. MoMo is the most preferred alternative payment solution in Vietnam, followed by PayPal.

Meanwhile, such strong growth of the market has prompted global companies to invest in Vietnamese e-commerce businesses. In 2018, Tiki, a local e-commerce company, received US$5.3 million and US$44 million funding from IT firm VNG Corporation and Chinese investor JD.com, respectively. In the same year, another company Sendo secured US$51 million from SBI Group (a Japan-based financial services company) and other investors. Furthermore, Chinese e-commerce giant Alibaba invested an additional US$2 billion in Lazada, one of the leading e-commerce companies in the country.