In the first half of the year, Vietnamese consumers spent approximately VND800 billion (US$32 million) daily on online shopping across five major platforms: Shopee, Lazada, Tiki, Sendo, and TikTok Shop.

Online shopping is on the rise in Vietnam. Photo: Chien Cong/The Hanoi Times

This information comes from the "Online retail market report for the first half of 2024" by Metric, Vietnam’s leading e-commerce data provider.

The company noted that the data, collected using technology and excluding fake orders and gift items, showed that the total sales from these five platforms in the first half of the year reached VND143.9 trillion ($5.7 billion), a 54.91% increase compared to the same period in 2023. This growth rate significantly outpaces the 7.4% growth in the retail sector as reported by the General Statistics Office for the first half of this year.

During this period, the total retail sales nationwide were nearly VND2,400 trillion ($94.7 billion). Thus, the market share of these five leading online retail platforms is estimated to account for about 6% of the entire retail sector.

"E-commerce in Vietnam continues to thrive and stands out in the overall economic landscape," Metric commented.

The main drivers of this growth are TikTok Shop and Shopee, with year-on-year sales increases of 150.54% and 65.97%, respectively. According to Metric, this success can be attributed to these platforms' deep understanding of the Vietnamese market and consumer needs. In contrast, Lazada, Tiki, and Sendo saw double-digit declines in customer spending over the past six months.

In the first half of the year, consumers purchased 1.53 million products online (based on successful deliveries), a 65.5% increase from the same period in 2023. Notably, the low-price segment under VND200,000 ($8) remained highly attractive, with its market share growing by 3% compared to the previous year.

"Given the current economic fluctuations, many families are tightening their budgets. Therefore, consumers prioritize affordable products," the report noted.

Thanks to its advantage in the low-price segment, especially through promotional sales via livestreams, TikTok Shop saw the highest growth in terms of product volume in the first half of the year, with an increase of over 240% compared to the same period in 2023, while Shopee grew by 65.5%.

By product category, Vietnamese consumers spent the most on beauty products, women's fashion, and home and lifestyle items over the past six months. These three categories led to both sales and volume of online purchases. On average, Vietnamese consumers spent VND144 billion ($5.7 million) daily on beauty products, over VND100 billion ($4 million) on women's clothing, and a similar amount on household items.

Alongside robust growth, there are significant challenges for both sellers and buyers in the online market. Google & Temasek predict that Vietnam's e-commerce market will reach $24 billion by 2025.

A report by NielsenIQ Vietnam found that while the industry is growing rapidly, it is also changing quickly.

"Livestreaming may be a key driver for this year and next, but the online environment is highly dynamic, requiring constant monitoring to keep up with upcoming changes," it noted.

In reality, sellers face increasing competition, especially with the frequent price wars during livestream sessions. The online channel is becoming more competitive as many brands move away from traditional sales channels, and celebrities and manufacturers seek to sell directly to end customers. Moreover, most platforms make it easy for customers to purchase products from foreign stores, adding to the diversity.

Metric's data shows that 573,800 stores were active on Shopee, Lazada, Tiki, Sendo, and TikTok Shop in the first half of the year. Despite the increase in sales, the number of stores decreased by 7.54% compared to the same period last year, indicating high competition and attrition.

For consumers, the opportunity to buy cheap products online also carries the risk of encountering substandard  goods. In the past six months, market regulators have shut down several online warehouses selling counterfeit or unverified products. Currently, some customers are proactively choosing official stores (Shop Mall) for their purchases. Metric reports that the market share of Shop Mall increased by 12.29% in the past half year, indicating that consumers are increasingly prioritizing clear-origin products and reputable sellers.