Vietnam’s ecommerce: if you’re offline, you go online and if you’re online, you go offline

When I buy something online in Vietnam, I usually pop over to my favorite site. I book the product online and go through a three- to four-step process to confirm my email, address, and payment information. Usually, I choose the cash option. I don’t want to have to deal with any of Vietnam’s complicated payment models. After I’ve confirmed everything, I usually get an email from the site confirming my order.

A few minutes later, because delivery people in Vietnam can’t just drop off boxes at my doorstep due to theft and lack of a mailbox, I get a phone call.

“Hello?”

“Hi. Yes, this is Ecommerce.vn, confirming your order for a brand new iPhone 7s. Can we ship the item to you Monday next week?” (It’s Friday)

“Hm… Unfortunately, I won’t be there on that day. Is there a better time?”

“Yes, how about…Thursday next week or Friday the week after that?”

“Um…yes, I think I’ll be there.”

This charade goes on for awhile. Sometimes it goes on for days. Eventually, I get the package a week later. Sometimes it takes two weeks. Sometimes I schedule with an operator from the ecommerce company. Sometimes I schedule with the logistics company that the ecommerce company works with. It’s messy, but it works.

Today, ecommerce in Vietnam is worth more than $700 million and by some estimates, it may hit $1.3 billion in 2015. But these numbers may be dubious. As Ho Khanh, CEO of CungMua, has stated, it’s not clear what the methodology for obtaining those numbers is. The murkiness of the methodology soon becomes evident when you look more closely at some of Vietnam’s top ecommerce companies. There’s a huge gray area between online and offline commerce.

Photo credit: panoramio.com

15 percent of MobileWorld’s revenue comes from ecommerce, almost $60 million per year

One of Vietnam’s top ecommerce companies is not even strictly an ecommerce company. It’s a massive mobile retailer called MobileWorld, or The Gioi Di Dong in Vietnamese. Last year, its revenue hit over US$370 million and it’s set to IPO this year. Its revenues from ecommerce thus far in 2014 make up 15 percent of its total revenues. That’s almost US$60 million. In the next five years, MobileWorld’s plan is to grow that number to 20 percent. But how will this really work for MobileWorld?

Basically, if you go to a local MobileWorld store, you can check out a new phone and then buy it using your current phone. Many customers go home after identifying their favorite model and buy it from their computer on MobileWorld’s site. This allows them to receive a discount. If a customer’s house is near a MobileWorld store, the phone can be shipped – sometimes as fast as 30 minutes to a person’s house.

Companies going from online to offline

Are these the frontiers of ecommerce in Vietnam?