3 insights about Vietnam’s ecommerce landscape last year

Photo credit: Thi Hong Hanh Mac / 123RF

2017 was a great year for the ecommerce industry in Vietnam. Among the biggest events were Alibaba’s US$1 billion investment in Lazada and JD.com’s US$44 million investment in Tiki.vn.

And early this year, Creador injected US$43.8 million into Vietnam’s largest electronics retailer Mobile World (The Gioi Di Dong). The omni-channel giant also succeeded in acquiring Tran Anh Digital earlier on.

The ecommerce market also showed positive growth over the past few months, with the revenue amounting to US$2.6 million so far this year. With an expected annual growth rate (CAGR between 2018 and 2022) of 13.7 percent, the market volume of Vietnamese ecommerce is predicted to hit US$4.3 million in 2022.

To find out the drivers behind this growth, we explored iPrice’s proprietary data of over 1,000 ecommerce players in the region. Our research uncovered the following highlights:

1. Vietnam has the highest growth in mobile traffic in Southeast Asia
2. Vietnam’s ecommerce merchants are leaders in conversion rate
3. Bank transfer and COD are more popular payment methods

Highest mobile growth

Mobile traffic in Southeast Asia

At 26 percent over the past 12 months, Vietnam enjoyed the steepest growth in mobile traffic across Southeast Asia. Mobile traffic has grown by 19 percent on average, now accounting for 72 percent of the overall ecommerce traffic.

Millennials are the key driver for mobile growth in Vietnam. According to Nielsen, this generation makes up 30 percent of the country’s population, which translates to around 27 million people. A ComScore 2017 report recorded that Vietnam demonstrates a stronger mobile-first population than other global and regional markets due to millennials’ increasing use of mobile.

To illustrate, we saw the dramatic rise of Shopee in 2017. Within less than two years of operation, the mobile-first platform surpassed Lazada to become the number one shopping app in the country. This signifies that millennial shopping behavior is gradually shaping the future of ecommerce in Vietnam.

High conversion rate

Bank transfer and COD’s popularity