E-COMMERCE

INDUSTRY
IN VIETNAM
Edition 2018

Source: negativespace.co

RESEARCH REPORT
This project is co-funded
by the European Union
 USEFUL CONTACTS MORE INFORMATION

EU-Vietnam Business Network (EVBN) General Statistics Office of Vietnam:

15th Floor, 5B Ton Duc Thang, District 1 http://www.gso.gov.vn
Ho Chi Minh City, Vietnam Vietnam Customs Statistics:
T: +84 (0)28 38239515 http://www.customs.gov.vn/
www.evbn.org Vietnam Trade Promotion Agency (Vietrade):
en.vietrade.gov.vn
World Bank Vietnam:
http://www.worldbank.org/en/country/vietnam

The Landmark, 15th floor, 5B Ton Duc Thang St., District 1, This publication was produced with the assistance of the European
Ho Chi Minh City, Vietnam Union.
Tel. +84 (0)28 3823 9515 Fax +84 (0)28 3823 9514
The content of this publication is the sole responsibility of EVBN and
www.evbn.org
can in no way be taken to reflect the views of the European Union.

EVBN E-commerce industry in Vietnam 2

CONTENTS
Contents 3
Chapter 3: Competitive Landscape
List of Abbreviations 4 Dominance of social media 28
Currency Exchange 4 B2C E-commerce landscape 29
B2B E-commerce landscape 30
List of Figures 5
Case Studies 32
Executive Summary 6

Chapter 4: Profile of End Consumer 34

Chapter 1: Vietnam Overview
Geo-demographics 8
Vietnam’s Economy 10
Structure of consumption expenditures 12 Chapter 5: Regulatory and Legal
Framework
Regulatory and legal framework for
investors in the E-commerce industry 38
Chapter 2: Overview of E-commerce Relevance and impact of the EVFTA 40
in Vietnam
Vietnam’s digital landscape 14
B2C E-commerce 15 Summary 41
Overview of B2C E-commerce 15
16 List of Trade Fairs and Exhibitions 42
Structure of B2C E-commerce
Payment methods 18 Main Online and Printed Publications 43
Logistics 18
Useful Contacts 44
B2B E-commerce 19
Service E-commerce 20 References 45

Market trends 21
Market drivers 24
Market barriers 25
Opportunities and challenges within
the E-commerce industry 26

EVBN E-commerce industry in Vietnam 3

LIST OF ABBREVIATIONS
ASEAN Association of Southeast Asian Nations
B2C Business to Consumer
B2B Business to Business
C2C Consumer to Consumer
CAGR Compound annual growth rate
CIT Corporate Income Tax
COD Cash-on-delivery
EU European Union
EVFTA EU-Vietnam Free Trade Agreement
FDI Foreign Direct Investment
FOE Foreign Owned Enterprise
FTA Free Trade Agreement
GDP Gross Domestic Product
GRDI Global Retail Development Index
IOT Internet of Things
MoIT Ministry of Industry and Trade
POS Point-of-Sale
SME Small and Medium Enterprise
VCUFTA
Vietnam and Customs Union of
Belarus – Kazakhstan – Russia Free Trade Agreement

VECOM Vietnam E-commerce Association
VECITA
Vietnam E-commerce and Information Technology Agency
VJEPA
Vietnam Japan Economic Partnership Agreement
VKFTA
Vietnam Korea Free Trade Agreement
WTO
World Trade Organization

CURRENCY EXCHANGE
EUR/US$ 0.81
EUR/VND 27,998.64

EVBN E-commerce industry in Vietnam 4

LIST OF FIGURES
Figure 1: Map of Vietnam with key cities 8
Figure 2: Vietnam’s population 2013-20f 9
Figure 3: Forecast of rural and urban population in Vietnam and Asia Pacific, 2030 9
Figure 4: Nominal GDP and Real GDP growth, 2013-20f 10
Figure 5: Nominal GDP per capita, 2013-20f 10
Figure 6: Total registered FDI capital, 2010-2017 11
Figure 7: Total registered FDI capital by provinces, 2017 11
Figure 8: Structure of consumption expenditure, 2013-22f 12
Figure 9: Vietnamese Internet Users 14
Figure 10: Smartphone penetration rates in Vietnam 14
Figure 11:Structure of retail market in Vietnam 15
Figure 12: Vietnam B2C E-commerce market size and its proportion in total retail industry value, 2013-20f 16
Figure 13: Definitions of types of E-commerce 16
Figure 14: Number of registered E-commerce websites in Vietnam by type, 2015-2016 17
Figure 15: Preferred payment methods in Vietnam, 2015-2016 18
Figure 16: Estimated E-commerce logistics market value, 2018-2022f 18
Figure 17: Modes of shipping used by E-commerce businesses in 2016 19
Figure 18: Estimated market size of B2B E-commerce in Vietnam, 2012-2015 19
Figure 19: Growth in E-commerce website access via mobile phone in Southeast Asia 21
Figure 20: Percentage of online purchase methods in Vietnam, 2013 – 2016 22
Figure 21: Online shopping platform preferred by consumers, 2017 28
Figure 22: Top 10 E-commerce websites by monthly visits 29
Figure 23: List of some B2B E-commerce players in Vietnam 30
Figure 24: Tiki’s homepage and logo 32
Figure 25: Auchan’s homepage and logo 33
Figure 26: Online shopping frequency 35
Figure 27: Device used to shop online 36
Figure 28: Products/services most purchased online 36
Figure 29: E-commerce registration process 38
Figure 30: Conditions for opening a shop on some key: E-marketplaces in Vietnam 39

EVBN E-commerce industry in Vietnam 5

Executive
Summary
Vietnam is a land of opportunity for foreign E-commerce companies because of its
young population, high Internet penetration rate (ranked 17th in the world) and climbing
smartphone penetration rates. Millennials, considered the target population of
E-commerce firms, account for 30% of Vietnam’s population (approximately 30 million
people). The penetration of Internet is projected to increase steadily, with the percentage
of Internet users set to reach 65% in 2022.

Internet services made their first appearance in Vietnam in 1997. Three years later,
however, the Internet usage rate was still insignificant with a 0.2% local penetration.
However, the situation changed drastically over the years. In 2017, approximately 50
million Vietnamese, or half of the population, were connected to the Internet. Despite its
late start, Vietnam’s penetration rate (54%) in 2017 is now higher than the world average
(46.5%).

Following its accession to the WTO in 2007, Vietnam has allowed foreign investors to
establish 100% foreign-owned companies. This has attracted many foreign investors,
including E-commerce retailers. As E-commerce is expected to soon become an
important part of Vietnam’s trade sector, currently, big names such as Lazada, Shopee
(Sea Limited) and more recently, Amazon, market have seized the opportunity and
entered Vietnam. In 2017, the Southeast Asian E-commerce market was growing at 35%
per year, 2.5 times faster than in Japan. Vietnam ranks 4th for online shopping in the Asia
Pacific region and is expected to continue booming in the coming years, with sales
estimated to reach EUR8.1 billion in 2020.

This report will discuss the opportunities and challenges of E-commerce in Vietnam in
the next 5 years, with a focus on the B2B and B2C sectors. The report will also discuss the
impact of the EU-Vietnam Free Trade Agreement (EVFTA) on this market.
 CHAPTER 1
VIETNAM OVERVIEW
Geo-demographics

Vietnam’s Economy

Structure of consumption expenditures

I. Geo-demographics

Vietnam comprises a landmass of 330,972.4 km2,

Hanoi a vast sea area including a large continental
shelf and a string of archipelagos stretching
from the Gulf of Tonkin in the North to the Gulf
of Thailand in the South. In 2017, Vietnam’s
population was 95.54 million people and is
projected to reach 98.4 million in 2020, an
increase of 1% on average between 2015-2020.
Major cities in Vietnam, namely Hanoi, Hai
Phong, Danang, Nha Trang, Ho Chi Minh City,
and Can Tho, are well-dispersed geographically.
Hanoi, the capital of Vietnam, is the second
largest city in Vietnam and is the country’s
political and administrative centre. Hanoi is
Da Nang known for its rich culture characterised by South
East Asian, Chinese and French influences. Ho
Chi Minh City, commonly known as Saigon, is
the country’s largest city and the commercial
hub of Vietnam. By 2030, Ho Chi Minh City will
continue to be the largest city in Vietnam by
population with over 10 million inhabitants
accounting for 23% of Vietnam’s total urban
population.

Nha Trang

Image from www.wikipedia.org

Ho Chi Minh City

Can Tho
Image from www.vietnamtourism.gov.vn

Figure 1: Map of Vietnam with key cities

EVBN E-commerce industry in Vietnam 8

 91.50

*Unit: million people

2013

2014 92.54
2015 93.57
2016e 94.57
2017f 95.54
2018f 96.49
2019f 97.43
2020f 98.36
Figure 2: Vietnam's population 2013-20f
Source: D&B

Although Vietnam remains predominantly

57%
RURAL
rural, it is expected to undergo significant
urbanisation in the next 14 years. By
2030, the urban population is forecasted
to increase by 37% from 2017, reaching
Vietnam 45.66 million people, or 43% of the
total population of Vietnam. This rapid
urbanisation is caused predominantly
43% by the growth of urban cities and the
URBAN expansion of the urban-based industrial
44%
RURAL
and services sectors. Moreover, high
urbanisation rate causes a pressure on
the construction sector to increase the
number of high-rise apartment buildings
Asia and office buildings.
Pacific
Figure 3: Forecast of rural and urban
population in Vietnam and
56% Asia Pacific, 2030
URBAN
Source:UNDP

EVBN E-commerce industry in Vietnam 9

 II. Vietnam’s Economy

Gross Domestic Product

250 8
6.7 6.8 6.7
6.2 7
200 6.0
5.4 6

150 5
248.8
(€ bn)

(%)
228.6 4
208.1
100 182.0 193.9
172.5 3
128.4 140.0
2
50
1

0 0
2013 2014 2015 2016 2017 2018e 2019f 2020f

Nominal GDP (EUR bn) Real GDP growth (%)

Figure 4: Nominal GDP and Real GDP growth, 2013-20f

Source: BMI

Real gross domestic product (GDP) growth is expected to accelerate at 6.7% in 2018, reaching €208.1
billion in value. With this growth rate, Vietnam remains one of the fastest-growing economies in Asia. The
solid increase pace is foreseen to continue until 2020, to reach €248.8 billion. The outlook is underpinned
by ongoing Government policies regarding the privatisation of state-owned enterprises (SOEs), the
maintenance of price stability, the lowering of trade barriers and reduced tax rates.

3000 In 2017, Vietnam’s nominal GDP

2,529 per capita reached €2,029, an
2500 2,346 increase of 5.4% compared to
2,156
1,924
2,029 2016. Nonetheless, the country has
2000 1,843
been recognised for its effort to
1,512
increase the GDP per capita, and
(€)

1500 1,403

expects to reach a GDP per capita

1000 of €2,529 in 2020. A solid increase
in GDP per capita suggests that an
500
average Vietnamese will have more
0 disposable income to spend on
2013 2014 2015 2016 2017 2018e 2019f 2020f
more goods than just basic needs.

Figure 5: Nominal GDP per capita, 2013-20f

Source: BMI

EVBN E-commerce industry in Vietnam 10

 Foreign Direct Investment

(€ mn) In 2017, Vietnam received a

24,041 record €24 billion of foreign
direct investment (FDI). This is a
19,761 reflection of the increase in trade
18,436
17,577 and production in Vietnam as more
16,378
15,066 global manufacturing giants have
11,904 decided to move their production
10,530 facilities to Vietnam to reap the
benefits from the numerous
incentives to attract investments
from the government.

Figure 6: Total registered FDI

2010 2011 2012 2013 2014 2015 2016 2017 capital, 2010-2017
Source: GSO

Ho Chi Minh City, Vietnam’s commercial centre, continued to receive the most FDI in 2017 with a total
registered capital of nearly EUR 2.7 billion. Provinces such as Binh Duong and Bac Ninh, where LG and
Samsung established their manufacturing centres, also received large amounts of FDI at EUR 2.0 and EUR 2.6
billion, respectively. Thanh Hoa and Khanh Hoa are two provinces receiving the highest number of newly
registered capital, respectively, due to mega Build – Operate – Transfer Japan’s thermal power projects.

(Unit: EUR mn)

Ho Chi Minh City 2,684.4

Bac Ninh 2,640.6

Thanh Hoa 2,563.8

Khanh Hoa 2,104.7

Binh Duong 2,003.5

Other 12,054.1

Figure 7: Total registered FDI capital by provinces, 2017

Source: GSO

EVBN E-commerce industry in Vietnam 11

III. Structure of consumption expenditures

With this GDP growth and increase in disposable income, consumption expenditure is expected to grow
at a rate of 9% during 2016-22f. The increase in the standard of living will likely also raise the price and the
quality of goods purchased by Vietnamese consumers.

6,000

5,000
EUR per year per household

4,000

3,000

2,000

1,000

0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Other 624 669 715 754 815 883 967 1,060 1,163 1,278
Leisure & education 212 228 244 258 279 303 332 365 401 441
Transport & communications 515 551 588 618 667 721 787 862 944 1,035
Health spending 69 74 79 84 91 98 108 118 130 143
Furnishing and home 149 160 171 180 195 211 231 253 277 305
Housing and utilities 396 422 450 472 508 548 598 653 714 782
Clothing & footwear 74 80 85 90 97 105 114 125 137 151
Food, beverages & tobacco 588 629 671 706 761 823 899 984 1,078 1,183

Figure 8: Structure of consumption expenditure, 2013-22f

Source: BMI

EVBN E-commerce industry in Vietnam 12

 Source: negativespace.co
CHAPTER 2
OVERVIEW OF
E-COMMERCE IN VIETNAM
Vietnam’s digital landscape
Market trends
Market drivers
Market barriers
Opportunities and challenges within the E-commerce industry
I. Vietnam’s digital landscape

Vietnam first connected to the Internet in November 60

Unit: million users
1997. In the last 20 years, the country has seen a CAGR 12-17: 10.9% 52.0
tremendous increase in the number of Internet 50

users. According to the Minister of Information

and Communications, Vietnam had approximately 40

52 million Internet users in 2017, or a 54% Internet

31.0
penetration rate, which is above the global 30

average of 46.5%. This puts Vietnam at the top of

Asian countries and the numbers are expected to 20
17.0
continue rising at a fast pace, thanks to relatively
flexible bandwidths services and low cellular data 10
cost. With the increasing accessibility to the Internet,
0.2
more and more people will have the opportunity to 0
access and use E-commerce services. 1997 2007 2012 2017
Figure 9: Vietnamese Internet Users
Source: Ministry of Information and Communications

80% This rise of Internet adoption can

72% 72% be partly attributed to the country’s
70% high smartphone penetration
rate. In the past five years, the
country has witnessed a surge in
60%
smartphone ownership, thanks
55%
to smartphones’ popularity and
50%
the rise of Vietnam’s per capita
disposable income. According to
40% 2017 statistics from Google, nearly
36% 72% of the Vietnamese population
30% use a smartphone. As smartphones
are key to conduct E-commerce
20% 20% activities online, the rise of
smartphone ownership will have a
10%
profound effect on the E-commerce
2013 2014 2015 2016 2017 landscape.

Figure 10: Smartphone penetration rates in Vietnam

Source: Google Consumer Barometer

EVBN E-commerce industry in Vietnam 14

 1. B2C E-commerce

As mentioned in the 2018 EVBN Vietnam Retail Market Study, the retail industry in Vietnam comprises three
main channels: traditional, modern and online. This report will be dedicated to the study of the online
retail channel, or B2C E-commerce, with a brief overview of the emerging B2B E-commerce channel.

R E T A I L I N D U S T R Y

TRADITIONAL MODERN ONLINE

RETAIL RETAIL RETAIL

Wet Grocery Hypermarkets Department stores/ Convenience

E-commerce
markets stores Supermarkets Shopping Centres Specialty Stores

Figure 11: Structure of retail market in Vietnam

Source: Speeda

1.1. Overview of B2C E-commerce

E-commerce is defined in Decree 52/2013/ND-CP size of EUR 5.5 billion in 2017. The E-commerce
as follows: industry in Vietnam is forecasted to continue
rising rapidly with a forecasted CAGR of 14%
“E-commerce activity means conducting part or
during 2017-20f, accounting for 5.2% of total retail
the whole of the process of commercial activity
sales. Though the E-commerce’s market share is
by electronic means connected to the Internet,
still relatively small, with its digitally savvy young
mobile telecommunications network or other
population, (i.e., Millennials, born between 1981
open networks.”
and 1996; and Generation Z, born between 1997
Vietnam currently has one of the fastest growing and 2010) and a high smartphone penetration,
B2C E-commerce markets in Southeast Asia, with a Vietnam’s transition from brick-and-mortar to
32.3% CAGR from 2013-17, translating to a market online retail seems inevitable.

EVBN E-commerce industry in Vietnam 15

150 148.8
(Unit: EUR bn)

120
110.4
99.6
89.1
90 80.6 140.7
72.0
60 104.9
85.9 95.6
78.2
30
70.2
1.8 2.4 3.3 4.1 5.5 8.1
0
2013 2014 2015 2016 2017 2020f

E-commerce Modern & Traditional Retail

Figure 12: Vietnam B2C E-commerce market size and its proportion in total retail industry value, 2013-20f
Source: VECOM, GSO, Ipsos Business Consulting analysis

Aware of this opportunity, numerous companies, both domestic and international, have invested
significantly to get the first-mover advantage. Their presence has made the landscape dynamic and
competitive, especially in the absence of a clear market leader. The competitive landscape and profile of
key players are further discussed in the Competitive Landscape section below.

1.2. Structure of B2C E-commerce

According to Decree 52/2013/ND-CP, B2C E-commerce in Vietnam is classified into four different types:
E-commerce trading floor
(E-marketplace)
E-commerce website
“An E-commerce website permitting traders,
(E-commerce sales website)
organizations or individuals that are not the
“The electronic information page set to website owners to conduct a portion or the
serve a portion or the whole process of
whole process of buying and selling goods
buying and selling activities of goods or
and services on that website, excluding
provision of services, from display and
introduction of goods or services to online securities trading websites.”
entering to contract, service provision,
payment and after-sales service.”

B2C
Online promotion website
“An E-commerce website set up by traders
Online auction website and organizations to promote the goods
“An E-commerce website providing solutions and services of traders, organizations or
allowing traders, organizations and individuals under the terms and conditions
individual that is not the website owners to of a promotion service contract.”
auction their goods on that website.”

Figure 13: Definitions of types of E-commerce

Source: Decree No.52/2013/ND-CP

EVBN E-commerce industry in Vietnam 16

E-commerce websites constitute the majority of E-commerce activities in Vietnam, although
e-marketplaces are gaining popularity. Online auction sites and online promotion sites remain a
significant part in the E-commerce landscape.

15,000
13,510

12,000

9,429
9,000

6,000

3,000

492 682
19 20 19 93
0 2016 2017 2016 2017 2016 2017 2016 2017
E-commerce Online auction Online promotion
E-marketplace
sales website sites sites

Figure 14: Number of registered E-commerce websites in Vietnam by type, 2015-2016

Source: Vietnam E-commerce Report 2017 by VECITA

Vietnamese consumers are shopping online through two other means: social media platforms and
mobile apps. While social media platforms are quite popular among Vietnamese consumers, mobile
commerce is still an emerging trend. These two means are further discussed in the Market trend and
Competitive landscape sections below:

SOCIAL NETWORK MOBILE APPLICATION

indicates “an application installed on mobile
is “an information system providing its users with equipment connected to a network that allows users
services such as storage, provision, use, search, to access the databases of traders, organizations
sharing, and exchange of information, including the and individuals to purchase and sell goods and
provision of personal websites, forum, online chats, provide or use services. Mobile applications include
audio and video sharing, and other similar devices.” goods sale applications and e-commerce service
provision applications.”
(Decree 72/2013)
(Circular 59/2015)

EVBN E-commerce industry in Vietnam 17

 1.3. Payment methods

Compared to the E-commerce industry, 100

the E-commerce payment landscape 91% 89%
lags behind considerably. Credit card
usage remains low in Vietnam, and cash- 80
on-delivery (COD) continues to be the
preferred method of payment. E-wallets
60
are not doing any better with their waning
popularity. Despite a recent rise in credit 48%
card usage, it is unlikely that consumers’ 41%
40
behaviour will change in the near future.
Lack of trust is a significant barrier to the
23%
adoption of online payment methods. 20
20%

11%
5% 6% 7%
Figure 15:
Preferred payment methods 0 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016
in Vietnam, 2015-2016 Cash on Bank Electronic Mobile/game Credit/debit
Source: Vietnam E-commerce Report 2017 by VECITA delivery transfer wallet cards cards

1.4. Logistics

Logistics and delivery are a constant challenge 1000

(Unit: EUR million)
CAGR 18-22: 42.1%
for the E-commerce industry in Vietnam due
801.9
to slow transportation (e.g., a truck cargo from 800

Ho Chi Minh City to Hanoi can take up to three

days) and the preference for COD payments. The 600
combination of a booming E-commerce industry 464.3
and an underdeveloped logistics infrastructure has 400
motivated firms to invest considerably in this field, 268.8
leading to an impressive forecasted y-o-y growth of
200 155.7
42% during 2018-22f. 90.1

0
This E-commerce gold rush has resulted in a crowded 2018e 2019f 2020f 2021f 2022f
and competitive logistics landscape with over 50
providers as of 2017, from traditional express services Figure 16:
(e.g., Viettel, EMS, and VNPost) to start-ups (e.g., Estimated E-commerce
giaohangnhanh, supership, and giaohangtietkiem) logistics market value, 2018-2022f
Source: Ken Research, Ipsos Business Consulting analysis
and international players (e.g., DHL eCommerce,
Grab Express, and Lazada Express).

EVBN E-commerce industry in Vietnam 18

 With COD as the preferred method of payment, it
10% is crucial for E-commerce businesses to establish a
reliable shipping and delivery network. While large
45% companies often have a dedicated logistics and
delivery department responsible for fulfilling orders
45% (for example, Lazada is the first E-commerce company
in Vietnam to have its own delivery company named
LEX – Lazada Express), the majority of companies use
third-party services. Small businesses and individual
shops rely on third-party providers and freelance
shippers to minimise operational capital.
Figure 17:
Fulfill orders themselves Modes of shipping used by E-commerce
businesses in 2016
Hire a third party
Source: VECITA
Both

2. B2B E-commerce

Business-to-business (B2B) E-commerce remains and Amazon has announced that it would offer
relatively new in Vietnam, yet it receives much E-commerce services to the Vietnam E-commerce
attention and support from the government. In Association (VECOM), a group consisting of 140 local
recent years, the government has taken actions to businesses, to sell and export their products.
respond to the rise and development of the B2B
1.2
E-commerce industry.
CAGR 12-15: 22.9%
E-Commerce in Vietnam falls under the umbrella of Unit: EUR billion
1.0
import-export activities, based on the assumption
that E-commerce is a time and cost efficient channel
for cross-border trade, especially for SMEs with limited
0.8
financial resources. In 2016, 32% of businesses in
Vietnam partnered with foreign companies through
online channels.
0.6
1.05
Vietnam is a member of many economic
0.86
communities and has joined several free trade 0.4
agreements (FTAs) including the Vietnam-Korea FTA 0.70
(VKFTA), the Vietnam-Japan Economic Partnership 0.57
Agreement (VJEPA), the Vietnam-Eurasian Economic 0.2
Union (VCUFTA), and the European-Vietnam FTA
(EVFTA), which will come into effect in 2018. With the
0.0
support of these FTAs, B2B E-commerce is expected 2012 2013 2014 2015
to grow considerably in the near future. Vietnam’s
lucrative market has captured the attention of Figure 18: Estimated market size of B2B
international players: Alibaba now allows 500 to E-commerce in Vietnam, 2012-2015
Source: eMarketer
600 Vietnamese exporters to sell on its platform,
EVBN E-commerce industry in Vietnam 19
 3. Service E-commerce

E-commerce is also a potential channel for services such as online tourism, online entertainment, online gaming
to online education services.
Online tourism in Vietnam is still in its infancy. But as Vietnam becomes a more lucrative destination, demand
is expected to increase. According to the VECOM, the rate of room reservations via online travel agents have a
y-o-y growth of over 30%, up from 20% in 2016. However, the market is currently dominated by foreign players
such as Agoda and Booking, which collectively hold about 80% of the market share. These websites are widely
popular among domestic and foreign travellers alike.
Due to the rising Internet penetration in Vietnam, online entertainment (movie tickets, event tickets) have
been rising steadily, accounting for a small but increasingly significant share of the total E-commerce value. This
emerging market is dominated by foreign players such as CGV for movie tickets and Ticketbox for event tickets.
However, it is expected to become more dynamic as more players enter the market. But with Vietnam’s low
credit card usage, it is unclear whether or when online entertainment will take off.
Vietnam’s online gaming market is one of the largest in Southeast Asia with more than a third of its population
playing online games, for a total of approximately EUR295 million in 2017. However, 80% of those games are
imported from South Korea and China, and none of the most popular games are Vietnamese.
Although online education (E-learning) has arrived in Vietnam a decade ago, it has taken off only recently.
In 2015, the country’s E-learning market size was estimated at EUR40.5 million only. However, according to
Ambient Insight, the country has a forecasted y-o-y growth rate of 44% on average in 2013-2018. As of August
2017, there were approximately 150 online education start-ups, which can be segmented into three groups:
Foreign languages: ESL dominates the market, but Japanese, Chinese and Korean language courses are
on the rise. Examples: tienganh123.com and tiengnhatonline.edu.vn
Preparation for the National University Entrance Exam: includes courses in mathematics, physics,
literature, chemistry and biology. Example: hocmai.vn
IT and soft skills: Vietnamese have started to pay more attention to these to improve their careers.
Example: kyna.vn

While e-services are undoubtedly promising in Vietnam, they are still in their early stages. Moreover, their study
is complicated by the fact that they are generally treated under their respective service category rather than
under the E-commerce umbrella. For this reason, e-services will not be further discussed in this report.

EVBN E-commerce industry in Vietnam 20

II. Market trends

Continuous increase in mobile shopping

iPrice recorded that in 2017, 72% of E-commerce 80%

websites in Southeast Asia were accessed from a

mobile device. However, conversion rates – the
percentage of website visits that convert into a 72%
product purchase – were 1.7 times higher from a 70% 70%
computer than from a mobile device. In Vietnam,
the year 2015 was characterised by a boom in
mobile commerce after E-commerce operators
62%
made substantial investments in creating mobile-
60%
friendly versions of their websites. Nonetheless,
only 15% of E-commerce operators had mobile 57%
websites in 2017.

Although mobile commerce has not yielded 50%

2016 | Q3 2016 | Q4 2017 | Q1 2017 | Q2
great returns for operators yet, it deserves serious
consideration in the future, especially amidst Figure 19:
Growth in E-commerce website access
rising cellular network subscription (3G and 4G)
via mobile phone in Southeast Asia
and higher smartphone penetration. Source: iPrice

E-marketplaces are gaining popularity

Vietnam’s E-commerce landscape has seen the emergence of several e-marketplaces such as Sendo
(sendo.vn), Adayroi (adayroi.vn), Shopee (shopee.vn) and Tiki (tiki.vn). According to a survey of 1,159
Vietnamese Internet users by the Vietnam E-Commerce and Information Technology Agency (VECITA),
e-marketplaces are gaining popularity. Users reporting having used e-marketplace websites have risen
from 19% in 2013 to 41% of respondents in 2017. Usage of E-commerce websites rose from 57% to 76%
respectively, while usage of group-buying websites – a kind of online promotion website – went down
from 51% to 24% in the same period. It should be noted that although the number of E-commerce
websites grows faster than that of e-marketplace websites, they are generally the online version of their
brick-and-mortar retail outlets. Therefore, their popularity may not be as high as it seems.

EVBN E-commerce industry in Vietnam 21

 E-marketplaces, defined as “websites for parties other than the website owner to conduct trade of
their goods and services,” ease the buying and selling process between organizations and individuals,
thus facilitating online C2C trade. With e-marketplace websites on a rapid rise, Vietnam’s E-commerce
landscape can expect changes.

80 76%
71%
70
61%
60 57%
51%
50

40 35%
28% 41%
30 24%
20 25% 27%
19%
10
2013 2014 2015 2016

E-commerce websites E-marketplace Group-buying websites

Figure 20: Percentage of online purchase methods in Vietnam, 2013 – 2016

Source: VECITA

E-commerce logistics sets to robust

E-commerce logistics services facilitate the delivery of products and real-time communication of
information about customers’ orders. Those services support the flow of goods through the transaction
cycle, from order to check-out, packing, delivery, payment tracking, and post-sales services.
The significant investments in E-commerce logistics is expected to further boost the growth of the
E-commerce industry. New players are entering the market, and established E-commerce operators are
expanding their business into the logistics segment. Giao Hang Nhanh Company aims to have 1,500
outlets by 2018, whereas DHL eCommerce is looking to add 1,000 outlets to its current nationwide
network of service points in Vietnam by the end of 2019.
But the race is not just about expanding presence; it is also about innovation. Giao Hang Nhanh Company
plans to create a network of collection points at local shops, convenience stores and in buildings. Lazada,
on the other hand, runs automated sorting centres in Ho Chi Minh City and Hanoi.
As long as E-commerce continues to grow at its current pace, the E-commerce logistics industry will
continue to improve. There are opportunities, more particularly, to develop better last-mile delivery, i.e.,
the stage where goods are delivered to the buyer.

EVBN E-commerce industry in Vietnam 22

Photo by Fancycrave from Pexels
 Cross-border E-commerce
is expected to grow big

The number of Vietnamese accounts on Alibaba was 500,000 in 2016, with 100,000 additional accounts
every year since then. Vietnamese buyers consume foreign goods and services in larger numbers than
foreign buyers consume goods and services from Vietnam. According to the Vietnam E-Commerce
Association, this trend can be explained by three factors. First, foreign goods are more varied and more likely
to meet domestic customers’ needs. Second, Vietnamese E-commerce websites are generally distrusted
while reputable names such as Amazon, Alibaba and Rakuten, are perceived as more trustworthy. Finally,
shipping from overseas to Vietnam is less costly than the other way around.
Several actions have been taken to facilitate E-commerce to and from Vietnam. Amazon have partnered
with VECOM to provide training for Vietnamese sellers on how to efficiently sell on Amazon. Moreover, the
Ministry of Industry and Trade has proposed various policies favourable to E-commerce in the hope that
it will boost cross-border E-commerce between Vietnam and other countries.

EVBN E-commerce industry in Vietnam 23

Source: freepik.com
III. Market drivers
competitors looking to enter the market.
1. Growth in young population With a growing retail market coupled with a
high adoption of technology, the acceleration
The coming of age of Generation Z, of the E-commerce industry is obvious and
accounting for 16% of the population, or 14 opportunities for businesses are vast.
million people in 2017, is expected to boost
Vietnam’s E-commerce market in the next five
years. This generation, who will have never
4. Government initiatives
known a world without the Internet, will have
started using mobile devices at a young age.
Millennials, representing 30% of the population The government’s Decision No. 1563 has
(approximately 29 million people in 2017), are approved a master plan to foster E-commerce
currently the largest group of online shoppers over the period from 2016 to 2020. The
in Vietnam. They are characterised by their government considers E-commerce essential to
changing lifestyle and willingness to pay more help Vietnamese businesses boost the domestic
to improve their lives. and export markets, join the global value chain,
and enhance the national competitiveness for
global integration.
The key elements of this plan include:
2. Rising income
Bolstering the efficiency of government
Vietnam has witnessed the fastest-growing administrative services;
middle and affluent class compared to other Ensuring 30% of the population buy goods and
ASEAN countries. Between 2012 and 2020, this services online;
consumer segment will rise from 12 million to
Ensuring an average spend of EUR283.5 per
33 million. The new middle class has already
person online;
fulfilled its basic and low-end needs and is now
willing to pay more for impact and high-end Increasing revenue from online B2C to EUR8.1 billion;
shopping. This economic growth is favourable Ensuring B2B revenue accounts for 5% of total
to the expansion of E-commerce in terms of retail spend;
both quantity and quality.
Ensuring online B2B turnover is worth 30% of
total turnover in 2020.

3. Growing retail market In order to achieve these targets, the

Vietnamese government is planning to develop
Vietnam’s retail market is considered a top a comprehensive legal framework for all
priority market with low market saturation. The E-commerce activities. A national E-commerce
nation was ranked sixth in the Global Retail payment system and integrated e-payment
Development Index (GRDI), an increase of five solutions applicable to all E-commerce models
ranks compared to the previous year. While will be established by 2020. Transportation as
remaining a small market in terms of size, well as delivery service networks and order-
Vietnam exhibits great potential for foreign processing systems will be implemented

EVBN E-commerce industry in Vietnam 24

in all cities and provinces nationwide. The
government will also formulate mechanisms 5. Digital transformation
for the settlement of disputes and handling
of violations in the E-commerce environment. The last force driving Vietnam’s E-commerce
Finally, to facilitate online shopping and market is the digital transformation, which refers
e-payment, point-of-sale (POS) terminals to the emergence of new technologies such as
will be installed in all retail outlets, including analytics, mobility, social media and more recently,
department stores, supermarkets and modern the Internet of Things (IOT). The rise of the Internet
distribution centres. Finally, 70% of electricity, and other information technologies has helped
water, telecoms and media service providers Vietnamese people adopt online shopping. The
will support the e-payment of service charges. spread of digital technology to all aspects of
human society will make this trend continue.

IV. Market barriers

leads to higher cancellation rates and lower
1. Lack of trust profitability. Thus, this cultural preference will
continue to hamper the growth of Vietnam’s
Lack of trust remains the greatest hindrance to E-commerce industry.
the growth of E-commerce in Vietnam. It applies
to various aspects of a transaction, from product
quality to customer service, data protection,
banking fraud, unfulfilled deliveries, etc. This 3. Underdeveloped logistics and
lack of trust stems from an immature market delivery facilities
and the lack of technological infrastructure in
the country. Vietnam requires a better logistics infrastructure
to support the growth of its E-commerce industry.
Oftentimes, third-party logistics providers and
E-commerce websites have to work together to
2. Predominant of COD
meet the demand of the frequent, small-sized
payment method orders of Vietnamese consumers. Moreover,
E-commerce in Vietnam depends on a high
Despite its growing E-commerce market, the number of reliable shippers, since shippers
e-payment ecosystem in Vietnam is rather not only deliver the product to customers but
inadequate. Vietnam is still a cash-based society also collect payment. Therefore, most market
and Vietnamese consumers generally distrust players use a combination of in-house delivery
financial institutions when it comes to securing, teams and third-party service providers. Online
saving and transferring their money. For that sellers, regardless of their size, tend to opt for
reason, credit cards and online banking are outsourced delivery services, either partly or
not widely used. Moreover, many consumers fully, for the distribution of a large number of
see credit card and online banking transaction packages simultaneously. Further investment
fees as unnecessary costs. Such fees may in logistics technology and infrastructure is still
also discourage large transactions. From the required to address current problems such as
perspective of E-commerce operators, COD failed deliveries and high-costs.

EVBN E-commerce industry in Vietnam 25

 V. OPPORTUNITIES AND CHALLENGES
WITHIN THE E-COMMERCE INDUSTRY

B2B cross-border E-commerce

High-tech delivery solution Compared to the B2C E-commerce,
B2B E-commerce is still in its infancy
The demand for a seamless and reliable delivery
in Vietnam, with a highly fragmented
process is strong, especially with COD payment
market and relatively few international
method dominating the market. Due to the poor
players. With the EVFTA coming into
infrastructure in Vietnam, delivery companies
effect in 2018 and the green light from
still have to rely on human labour to provide
the government, EU companies can
their services, which presents many challenges.
offer high-quality export solutions for
E-commerce companies will continue to seek
Vietnamese SMEs who wish to take
better delivery solutions, especially high-tech
advantage of this opportunity.
solutions that can track and manage the entire
delivery process in a cost-effective way. With
a robust 42.1% CAGR, EU companies with a
technology advantage should consider entering
the Vietnamese market.

Opportunities

Challenges

Highly competitive B2C

E-commerce market

The Vietnam B2C E-commerce market Poor infrastructure

is currently facing fierce competition,
with E-commerce global giants Vietnam’s poor infrastructure, ineffective logistics
pouring out massive investments to system and preference for the COD payment
claim the lead positions. Therefore, method constitute tremendous hindrances
any EU company looking to enter to the growth of the E-commerce industry. EU
this space should possess substantial companies seeking to join this industry will
financial capabilities and have the have to adapt and innovate in order to succeed
persistence to survive. in this field.

EVBN E-commerce industry in Vietnam 26

Image created by Freepik.com

CHAPTER 3
COMPETITIVE LANDSCAPE
Dominance of social media

B2C E-commerce landscape

B2B E-commerce landscape

Case Studies
I. Dominance of social media
Transactions via social media platforms, Moreover, by selling on social media platforms,
especially Facebook, are the dominant form sellers avoid taxation. According to Vietnamese
of E-commerce in Vietnam. Facebook alone law, sellers must pay income tax only if their
accounts for 66% of the country’s online annual revenue is above EUR3,572/year.
transactions in 2017 according to Q&Me. However, since most transactions are made
Furthermore, 62% of online consumers in cash, sellers’ revenue is hard to track.
reported thinking that buying on Facebook is Additionally, sellers do not have to register as a
“more interesting” than buying on traditional business to sell on social media platforms, due
E-commerce websites. This can be attributed to an ambiguity in the Vietnamese law. This is
to the ease of sharing favourite products and beneficial to small businesses and sellers who
opinion with friends on Facebook. Furthermore, can set up their activities on Facebook easily.
according to a 2018 Wearesocial report, 52%
of Vietnamese are active social media users, Until the government figures out a way
creating a large user base for consumers to to collect taxes on social media platforms,
interact with one another. By utilising Facebook traditional E-commerce operators will continue
as an E-commerce platform, sellers can take to be at a disadvantage when competing with
advantage of Facebook’s data analytics to better social media based e-businesses.
target specific consumer groups.

Others Facebook

34%

66%

Figure 21: Online shopping platform preferred by consumers, 2017

Source: Q&Me

EVBN E-commerce industry in Vietnam 28

 II. B2C E-commerce landscape
Vietnam’s E-commerce industry is competitive and companies go to great lengths to attract traffic
to their sites. Higher site visits mean better brand awareness and higher conversion rates, which
ultimately, lead to higher revenues.

Year of Key Monthly Alexa

Name Company background Type visits
lunch investors (Dec 2017) ranking

The Lazada Group is one of the top E-commerce companies in

E-Marketplace
Southeast Asia, currently present in Indonesia, Malaysia, the
E-commerce sales 2012 Alibaba 54.82 million 18
Lazada Philippines, Singapore, Thailand and Vietnam. It previously
Vietnam belonged to Rocket Internet, but has been acquired by Alibaba. website

Thegioididong is the E-commerce website of the Mobile World E-commerce sales Mobile World
The gioi 2004 Investment 39.17 million 70
di dong
Group and specialises in selling smartphones. website
Corporation

Sendo is FPT Corporation’s online marketplace. Sendo is E-Marketplace

currently serving 80,000 shops with more than 5 million E-commerce sales 2012 FPT Group 26.64 million 42
Sendo products from 21 different categories. website

Shopee is one of the largest C2C E-commerce platform in

E-Marketplace 2016 Sea, Tencent 22.28 million 25
Shopee Vietnam Southeast Asia and Taiwan.

Started out as an online bookstore, Tiki has grown to become E-Marketplace Sea, TenaJD.com,
one of the largest E-commerce companies in Vietnam, offering E-commerce sales 2010 Vinagame Corporation, 19.74 million 32
Tiki 10 different product categories. website STICcent

FPTshop.com.vn belongs to FPT corporation and specialises in E-commerce sales

2012 FPT Group 13.00 million 98
FPT shop selling electronic devices. website

Mobile World
Dienmayxanh is a Mobile World Group’s E-commerce website E-commerce sales
2014 Investment 10.49 million 194
Dien may xanh and specialises in selling household appliances. website
Corporation

Adayroi is Vingroup’s E-commerce website. Vingroup is the

largest multi-industry private corporation in Vietnam working E-commerce sales
2015 Vingroup 6.98 million 158
in real estate, retail, education, hospitality, healthcare, website
Adayroi agriculture and heavy industry.

Vatgia belongs to the VNP Group, one of the pioneers in Vietnam

E-commerce market. Vatgia currently has more than 26,000 E-Marketplace 2007 VNP Group 6.87 million 116
Vat gia
participating shops.

Nguyenkim is an E-commerce website of the long-time retail E-commerce sales

giant Nguyen Kim. It specialises in selling consumer electronics 2011 Central Group 6.06 million 211
Nguyenkim website
and household appliances.

Remark: Alexa’s rank is based on the browsing behaviour of people in its global database which is a sample of all Internet users

Figure 22: Top 10 E-commerce websites by monthly visits

Source: similarweb, Alexa, Ipsos Business Consulting analysis

EVBN E-commerce industry in Vietnam 29

 As can be seen from the table above, eight out of the ten most visited E-commerce websites in Vietnam
are domestic companies. However, the leading position is occupied by Lazada, an international giant
who has been rapidly expanding into the Southeast Asian region. Nonetheless, IPrice reported that
Lazada only accounts for 19% of E-commerce site visits in Vietnam, compared to over 40% of site
visits in the other Southeast Asian countries. With no clear market leader, Vietnam’s E-commerce
market remains highly competitive and companies spend aggressively in order to claim the top
positions. For example, in June 2017, Alibaba invested a total capital of more than EUR1.62 billion
into the Lazada Group in Southeast Asia. Tiki.vn, on the other hand, has received a total investment
of around EUR57.51 million from VNG Corporation (Vietnam), Tencent (China) and STIC (Korea).

In the near future, Vietnam’s E-commerce landscape is expected to become more dynamic, with the
entrance of large E-commerce players worldwide. Aside from Alibaba, Tencent and JD.com – both
giants in the global E-commerce market – have made considerable investment into Shopee and Tiki
respectively, in order to establish their presence in the country. Finally, Amazon – the world’s biggest
and oldest E-commerce company – has announced its plan to enter Vietnam by providing VECITA
with E-commerce services.

III. B2B E-commerce landscape

B2B companies focus on import-export Vietnam in 2012 by providing E-commerce
activities and connect Vietnamese businesses, support to 500-600 exporters. Alibaba later
including SMEs, to foreign enterprises while created the Vietnam Export Support Alliance in
also providing foreign prospective buyers/ collaboration with its local partners in order to
sellers with an overview of the business and establish the B2B E-commerce scene in Vietnam.
legal environments of Vietnam. Over time, some Vietnamese players rose such
Currently, the B2B E-commerce market in as Vietrade.com (belonging to the Ministry of
Vietnam is highly fragmented. The top player Industry and Trade), and Vietnamesemade.com.
is the Chinese giant Alibaba, who entered

Name Year of
Key Investors Offering
establishment

A range of services to assist Vietnamese in business

development and expansion or foreign enterprises in Vietnam
Vietrade.com Ministry of Act as a reliable source between global buyers and
2000 Vietnamese export enterprises
(www.vietrade.com) Industry and Trade
Offers memberships – Gold, Verified, and Standard – to
buyers/sellers to help sell their products or source material inputs

A well-structured website, a listing of a large number of

Vietnamesemade.com goods, and trusted sellers
1996 N/A A discount on bulk orders
(www.vietnamesemade.com)
Latest news on trade shows and recent market trends
Basic website structure, mainly solid business
BizViet
N/A BizViet Simple account
EVBN management
E-commerce industry in Vietnam 30
(www.bizviet.net/)
 Name Year of
Key Investors Offering
establishment

Basic website structure, mainly solid business

BizViet
N/A BizViet Simple account management
(www.bizviet.net/)
Numerous discounts for bulk orders
TradeKey The biggest directory of products and sellers in Vietnam
2006 TradeKey
(www.vietnam.tradekey.com) A well-built website structure
A list of various traders in Vietnam
Vietnam Business Directory A wide range of product categories
N/A N/A
(www.vietnambiz.org) Simple deal process
Suitable for serious business transactions
Online fair of Vietnamese manufactured goods
Vietnam E-commerce Simple and detailed website design
Vietnam Trade Fair
2004 Development Joint
(www.vietnamtradefair.com) A wide range of product categories
Stock Company
Details of various sellers

VietAZ.com Basic B2B marketplace

2006 Viet AZ Co., Ltd.
(www.vietaz.com) High quality products, especially food items
One of the biggest website present in Vietnam
TradeFord A wide range of products, from electronics to lifestyle
N/A TradeFord
(www.tradeford.com) Well-designed website structure and interface
Smooth process

Figure 23: List of some B2B E-commerce players in Vietnam

Source: Speeda Ecommerce - B2B in VNM 2018; emergeapp.net

B2B E-commerce also provides e-marketplace websites offering B2B2C services such as online shops,
warehousing and delivery services. However, the main focus of B2B2C websites is consumers. Hence,
B2B2C services offered to businesses are quite similar, differing only in the conditions and offerings
when setting up shops on different websites. Examples of B2B2C websites are Lazada, Sendo, Tiki
and Vat Gia, which have previously been introduced in the B2C E-commerce landscape section.
Conditions and offerings for setting up shops on these websites will be further elaborated in the
Legal Framework section.

EVBN E-commerce industry in Vietnam 31

 CASE STUDIES

1. Vietnamese E-commerce website:

Tiki (tiki.vn)
Established in March 2010, Tiki started as an online
English book-selling website. Less than two years later,
Tiki expanded its business model beyond books, and is
now selling more than 300,000 products in 12 different
categories. Tiki is currently one of the ten largest
E-commerce websites in Vietnam and has won branding
and entrepreneurship awards. Tiki’s special features
include 10%+ discounts on 90% of its products; 24-hour
or 2-hour delivery; customer hotline offering support
12 hours a day/7 days a week, and return and exchange
policies. The company used to have a B2C model but
has now adopted the E-marketplace model. This model
helped Tiki diversify its product offering and become a
competent E-commerce player. This model, however,
poses a number of challenges including quality control,
originality of the products and building customer trust.

Despite its growth and enviable position in the market,

Tiki still operates at a loss, like many other E-commerce
companies in Vietnam. In 2017, Tiki recorded a loss of
over EUR10.8 million. Though E-commerce is growing
rapidly in Vietnam, it is still at a stage where companies
have to invest large amounts of money in advertising,
warehousing, and human resourcing to position
themselves in the market. Nonetheless, Tiki has attracted
investors and received funding from companies such as
Seedcom, Cyberagent Ventures, Sumitomo Corporation
and VNG before receiving a large investment from JD.com
in late 2017 and early 2018. Tiki is planning to expand its
Figure 24: Tiki's homepage and logo
product offering to intangible products such as music,
movies and applications in the near future.
Source: www.travel-to-vietnam.net

EVBN E-commerce industry in Vietnam 32

 CASE STUDIES

2. French E-commerce website:

Auchan (auchan.vn)

Auchan is one of the largest retailers in France and was listed in the
top 500 global companies by Fortune magazine in 2017. Auchan
was established in 1961 and has a presence in 16 countries around
the world. The French retailer came to Vietnam in 2012, officially
opened its first supermarket in 2015, and is currently operating 20
supermarkets nationwide. Auchan sells more than 20,000 different
products including fresh goods, home appliances, packaged food,
cosmetics, etc. Auchan offer customers surprisingly low prices,
many sales promotions, high quality products and a wide range of
goods to meet people’s daily needs. In order to catch up with the
modern trend in shopping, Auchan has committed to diversify its
market expansion, including developing E-commerce.
At the moment, Auchan only offers online shopping through its
website auchan.vn. All of its products are listed online with detailed
descriptions. Customers can choose between two types of delivery:
Auchan Direct or Auchan MotorDrive. With Auchan Direct, goods
are delivered to the customer’s home; with Auchan MotorDrive,
customers choose their goods online and Auchan readies them for
pickup and payment later. Auchan Direct offers delivery services
within a 5-kilometer radius, with free delivery for orders above EUR11
and under 30 kilograms. If the shipment is delayed, customers are
notified and they can choose to cancel the delivery. Customers
can pay cash upon delivery (COD) or by cards. Most goods can be
returned or exchanged within 15 days, except fresh products, which
have a time limit of 24 hours, and some other products.
Auchan is not interested in opening a large number of outlets.
Figure 25: Instead, it focuses on cooperating with real estate firms to open
Auchan's homepage and logo their new outlets in key residential areas or apartment buildings.

EVBN E-commerce industry in Vietnam 33

Image Created by Freepik

CHAPTER 4
PROFILE OF END CONSUMER
As mentioned earlier, the Internet adoption rate respondents in Vietnam’s two largest cities Hanoi and
in Vietnam is high in comparison with other Ho Chi Minh has shown that 25% of consumers plan
neighbouring countries. This percentage is a catalyst to reduce their number of trips to physical stores in
for growth for the E-commerce industry as more the future. 45-50% said that they would shop online
people realise the convenience of this platform. more frequently in the future using either a personal
A 2018 research conducted by CBRE on 1,000 computer, laptop, smartphone or tablet.

Urban consumer profile

A recent research highlighted that in urban cities, the higher the income, the more likely and more frequently
an individual engages in online purchasing activities. Indeed, individuals aged 23-39 are the most frequent
online shoppers, probably taking advantage of the convenience of online shopping because of their busy
lives. This finding opens up opportunities for companies to reach this affluent group of consumers with their
high-end products, especially as Vietnam’s disposable income continues to rise.

29% 25%
36% 41% 33% 33%
43% 33%
46%
15%
21% 17%
21%
20%
22%
20% 23%
30% 19%
29%
27% 31% 28%
22% 23%
29% 22%

30% 30%
17% 16% 19% 18% 20%
15% 13%

Total Male Female 18-22 23-29 30-39 Rich Middle Low

Never or Rarely
Rich: income EUR723 or more
Once/several months
Middle: income EUR271 - EUR723
Once - A few times/month
Low: income EUR271 or less
Weekly and more

Figure 26: Online shopping frequency

Source: Q&Me

EVBN E-commerce industry in Vietnam 35

 While most online shopping is conducted
on personal computers or laptops, the use of
smartphones is on the rise. But mobile shopping
remains marginal since few E-commerce businesses
have mobile applications. These applications are key 53% 52% 52% 52%
47%
since they increase customer reach and allow to 40% 41%
engage with them more regularly and directly. 29%

2016 2017 2016 2017 2016 2017 2016 2017

Smartphone Home PC Smartphone Office PC

(browser) (app)

Figure 27: Device used to shop online

Source: Q&Me

Clothes, Shoes, Cosmetics 56% The most popular type of goods sold online
Electronic devices 55% are clothes, shoes and cosmetics, followed
Home appliances 48% by electronics, and household appliances,
as reported by a research conducted by
Flight, train, car tickets 45%
VECITA in 2016 on 1,159 respondents
Books, Stationery, Flower, Souvenirs 38% nationwide. It should also be noted that
Movie, Music tickets 27% the majority of consumers use this platform
Food 26% to compare prices, read reviews, and search
Hotel booking / Travel tour 25% for product details. These findings suggest
Consulting services, online education 12% that E-commerce should not only be used
as an alternate means of selling products,
Music / Videos / DVDs / Games 11%
but that companies should also focus on
Spa and Beauty 7% creating an ecosystem/interactive platform
Other 23% where consumers can benefit beyond
merely buying/selling goods.
Figure 28: Products/services most purchased online
Source: VECITA

Trust is a critical issue to E-commerce in Vietnam. Because the E-commerce market is still underdeveloped,
consumers (especially middle-aged) have concerns over the quality of the products and the reliability of
the service. iPrice and Trusted Company reviewed 30,000 reviews on 5,000 websites in Vietnam, Malaysia,
Singapore, Indonesia, the Philippines and found that consumers’ level of trust is the lowest in Vietnam, and
consequently Vietnamese consumers spend less online than consumers in other countries. Taking into account
this weakness, it is essential that companies source quality products and build data protection policies to
protect their customers.

EVBN E-commerce industry in Vietnam 36

Image created by Mrsiraphol - Freepik.com

CHAPTER 5
REGULATORY
AND LEGAL FRAMEWORK
Regulatory and Legal Framework for investors in the Retail sector

Relevance and impact of EVFTA

I. Regulatory and legal framework for investors in the
E-commerce industry
In order to conduct E-commerce activities in Vietnam, interested foreign companies are required to set
up a business entity in Vietnam. Since Vietnam’s accession to the WTO, the government has allowed 100%
foreign-owned E-commerce companies to operate in the country. Aside from obtaining an investment
registration certificate and a business registration certificate as any other foreign investment, E-commerce
companies must also register with the Ministry of Industry and Trade via their online Management Portal.

When notified, the

trader sends a hard
copy version of the
registration to MoIT.

05

When notified, trader logs on to

Apply for an online account on MoIT's website and files an
MoIT’s Management Portal. online registration for providing
E-commerce services.

07
Within 05 working days, MoIT
will crosscheck the hard copy
version with the online version.
After verifying all information, a
03 code will be sent via email to
Within 07 working days, the
the trader, containing the
trader will receive notifications
registration information. The
from MoIT via email if successful.
trader will put the code onto
In 03 working days, MoIT will process the E-commerce website.
the online application request and
notify the trader if successful.
Figure 29: E-commerce registration process
Source: Circular 47/2014/TT-BCT

In an ideal scenario, this registration process would take approximately 2-3 weeks, provided that there are
no problems with the application and no national holidays.
The full registration dossier should include:
1. Registration form for E-commerce service websites.
2. Authenticated copy of Establishment Decision (for organisations), Certificate of Enterprise Registration
or Investment Certificate (for traders).
3. Plans to provide services according to the provisions set out in Clause 3, Article 54 of the Decree
No.52/2013/NĐ-CP.
4. Statute of management of E-commerce service websites comprises:
a) Subject matters as set out in Article 38 of the Decree No.52/2013/NĐ-CP;
b) Method and time limit for handling violations of the E-commerce service websites upon detection.
5. Forms of service contract or cooperation agreement between traders and organisations that are in
possession of e-commerce service websites and traders, organisations and individuals who take part in
the buying and selling of goods and services on such websites.
6. General trading conditions applied to the buying and selling of goods and services on the website (if any).

EVBN E-commerce industry in Vietnam 38

If a foreign investor wishes to launch an E-marketplace, each E-marketplace will have its own special
requirements.

Type of Subscriptions/ Support

Name Required information Forbidden product
seller services

Name of business
Business Business Registration Code Support services available for
Business Tax Code sellers: marketing, seller's
Any product in violation homepage design, content
Name with the laws of Vietnam. management, finance,
Lazada Email address logistics and delivery, and
Individual legal and tax support.
Phone number
Address

Name of business Upgrades to verified seller

Business Business Registration Code available at different price.
Business Tax Code Added features include
Any product in violation prioritised search result, own
with the laws of Vietnam. interface, support in
Name
Vat Gia Email address updating and posting
Individual products, chat support, and
Phone number
Address fan page.

Add-on marketing package

Email address available with features,
Business
Phone number Any product in violation including prioritised search
&
Name of business with the laws of Vietnam. result, re-marketing on
Individual
Sendo Business address Facebook and Google, seller
contact detail shown.
Business
Any product in violation
& Phone number None
Shopee Individual with the laws of Vietnam.
Counterfeit and fake
products.
Name of business
Products that are
Business Registration Code
prohibited on E-
Business Business Tax Code None
commerce platforms.
Tiki Scanned copy of Business
Products that violate the
License
intellectual property
rights of a third party.

Figure 30: Conditions for opening a shop on some key E-marketplaces in Vietnam
Source: : Ipsos Business Consulting analysis

EVBN E-commerce industry in Vietnam 39

II. Relevance and impact of EVFTA

In light of the booming E-commerce scene in electronic commercial communications, or the

Vietnam, many foreign investors are looking to protection of consumers in the ambit of electronic
enter the market, and European companies are commerce, and any other issue relevant to the
no exception. With the EU-Vietnam Free Trade development of E-commerce.
Agreement (EVFTA) coming into force in 2018, EU In addition, imported EU goods to Vietnam will
E-commerce companies can expect to benefit enjoy numerous tax lifts, which will take place
greatly. gradually. With these tax cuts, EU E-commerce
Under the EVFTA, both the EU and Vietnam may companies will have the opportunity to supply
not impose any custom duties on electronic high-quality products to Vietnamese consumers.
transmissions between the two countries. To see the complete tariff schedule under the
Furthermore, Vietnam and the EU will maintain EVFTA, please follow this link: http://wtocenter.
a dialogue on regulatory issues raised by vn/content/full-text-vietnam-eu-free-trade-
E-commerce, such as the treatment of unsolicited agreement-evfta

EVBN E-commerce
EVBN The Retail Channels
industry in Vietnam 40
in Vietnam
 Summary
As the hospitality industry in
Vietnam is flourishing and ex-
Powered
pecting by increasing
to continue growing Internet access, wider smartphone usage and improved
technological
healthily infrastructure,
in the future, Europe- the E-commerce landscape in Vietnam has taken off
impressively
an suppliers in the
also eye recent years. More particularly, the B2B and B2C online trade saw
Vietnam
significant movement: B2C E-commerce marked a market value of EUR 6.8 billion in 2017,
and a notable y-o-y growth rate of 35%. Meanwhile, B2B online trade continues to receive
support from the government and from key players from within and outside Vietnam,
including renowned international players Alibaba and Amazon.

This boom in E-commerce is expected to be followed by several trends. First, mobile

commerce can expect to grow steadily thanks to the increase in 3G and 4G subscriptions
and smartphone penetration in Vietnam. Meanwhile, E-marketplaces are gaining much
popularity with C2C platforms such as Sendo, Tiki, Adayroi, and Shopee. The most
prominent C2C platforms, however, are social media platforms, most notably Facebook.
All these trends put pressure on the E-commerce logistics industry and call for the
expansion of the network and new logistics solutions. Finally, cross-border E-commerce is
expected to grow as the government implements a legal framework and creates
incentives.

A myriad of factors contribute to the growth of the E-commerce industry. First, Vietnam is
young and dynamic, with almost 50% of its population belonging to the Millennials and
Generation Z, who are technology savvy. Second, rising living standards and increased
disposable income fuel Vietnamese consumers’ desire to fulfil material needs above the
most basic ones, leading to more consumption and spending. Finally, with the support of
the government, the institutions that facilitate E-commerce will be strengthened.
The main caveat of the E-commerce industry in Vietnam is the lack of trust. This attitude
discourages people from participating in online trade due to concerns over product
quality, data privacy and unfulfilled orders. Another barrier is the skewed preference of
Vietnamese consumers for cash-on-deliver payments. Besides, the technological
infrastructure and logistics networks have not met up with the rise of E-commerce. In the
long run, if these barriers are not removed, they will seriously pose themselves as blocks to
E-commerce development.

With the coming into force of the EVFTA in 2018, several imported goods from the EU will
enjoy generous tax lifts, which will enhance the trade of high-quality products that are
sought after by Vietnamese consumers. While there are many players in the E-commerce
market, there is still space for newcomers, as long as they can overcome or adapt to the
barriers outlined above, especially the lack of trust. Overall, with the rising lifestyle and the
governmental support, the E-commerce landscape of Vietnam is promising for companies
willing to be patient and able to differentiate themselves successfully.
LIST OF TRADE FAIRS AND EXHIBITIONS

Name & Content Time Venue Organiser

In Hanoi:
CTM Palace, Cau
Annually in Giay District, Hanoi.
Vietnam E-commerce
late February In HCMC:
Vietnam Online Business Forum Association (VECOM).
or early March Capella Nguyen
(https://vobf-en.vecom.vn/) Kiem, Phu Nhuan
Update latest trends and data on District, HCMC.
domesticand global E-commerce

In Hanoi:
Forevermark, Tay ho
TopDev;
District, Hanoi.
Vietnam Mobile Day Annually in Vietnam E-commerce
In HCMC:
(http://mobileday.vn/en/home/) June Association (VECOM).
Grand Palace, Tan
Latest trends, technology and products Binh District, HCMC.
in Mobile

In Hanoi:
CTM Palace, Cau
Giay District, Hanoi.
Annually in Vietnam E-commerce
Vietnam Online Marketing Forum In HCMC:
August Association (VECOM).
Capella Parkview,
(https://www.vomf.vn)
Phu Nhuan District,
Latest trends and techniques in
HCMC.
Online Marketing
In Hanoi:
National Conven- Vietnam E-commerce
tion Center, Nam Tu Association (VECOM);
Annually in Liem District, Hanoi. Asia Edu Tech;
eCommerce Summit October In HCMC: Vinalink;
(https://www.ecommercesummit.vn) Capella Parkview, Vietnamprener.
Phu Nhuan District,
Growth strategies in E-commerce
HCMC.HCMC.

JW Marriot Hanoi State Bank of Vietnam;

Vietnam E-Payment Forum Annually in VNExpress;
(https://vepf.vnexpress.net/en) Hotel, Nam Tu Liem
November District, Hanoi. Napas.
Solutions for electronic/non-cash payment
in Vietnam and latest trends on worldwide
electronic payment.

EVBN E-commerce industry in Vietnam 42

MAIN ONLINE AND PRINTED PUBLICATIONS

CCS’s Handbook on MoIT’s report on

E-commerce and Vietnam E-commerce Status
Competition in ASEAN
(2017)

VECITA’s reports on Q&Me’s report on Vietnam

Vietnam E-commerce E-commerce Market (2017)

Appota Report -
iPrice – The State Entering Vietnam Mobile Market (2017)
of eCommerce in
Southeast Asia (2017)

EVBN E-commerce industry in Vietnam 43

USEFUL CONTACTS
Ministries and Administrations:

Vietnam E-commerce and Digital Economy Agency (VECITA)

25 Ngo Quyen, Hoan Kiem District, Hanoi, Vietnam
Phone: +84-242 220 5396
Website: http://www.vecita.gov.vn

Ministry of Industry and Trade

54 Hai Ba Trung, Hoan Kiem District, Hanoi, Vietnam
Phone: +84 243 222 02210
Website: http://www.moit.gov.vn

Associations:

Vietnam E-commerce Association (VECOM)

Room 702,7th Floor, 285HKC Building, Doi Can Street, Lieu Giai, Ba Dinh, Hanoi
Phone: +84 246 278 4479
Website: http://www.vecom.vn/en

EVBN E-commerce industry in Vietnam 44

REFERENCES
REPORTS AND PUBLICATIONS

B&Company (2017), E-learning in Vietnam.

CSS (2017), Handbook on E-commerce and Competition in ASEAN (2017).
EVFTA (2015), Chapter 8: Trade in Services, Investments and Electronic Commerce.
iPrice (2017), State of eCommerce in Southeast Asia 2017.
Kate Tran (2018), [MW Special Report] E-commerce in Vietnam.
Ken Research (2018), Vietnam E-Commerce Logistics Market Is Expected To Reach Over USD 990
Million.
Ken Research (2018), Vietnam E-commerce Market Outlook To 2019 – Driven By Internet Penetration
And Smartphone.
Q&Me (2017), Vietnam E-commerce Market (2017).
Speeda (2018), E-Commerce - B2B Industry Overview -Vietnam-.
Speeda (2018), E-Commerce - B2C Industry Overview -Vietnam-.
VECITA (2015, 2017), Vietnam E-commerce Report.
VECOM (2017, 2018), Vietnam E-Business Index.

WEBSITES AND ONLINE ARTICLES

Daniel Keyes (2018), Amazon Is Entering Vietnam.

Ha Phuong (2017), Local E-commerce Sites Win The Hearts Of Vietnam's Shoppers.
John Russell (2018), Alibaba Doubles Down On Lazada With Fresh $2B Investment And New CEO.
Le Van (2017), Online Education Booms In Vietnam.
Nguoi Lao Dong (2018), Foreign OTAs Dominate Vietnam’s Online Travel Market.
Nhan Dan (2017), Internet Users Account For 54% Of Vietnam’s Population After 20 Years.
Reuters (2018), JD.com Widens Southeast Asia Presence By Investing In Vietnam's Tiki.vn.
SimilarWeb, https://www.similarweb.com. (Retrieved April 20, 2018)
Steve Tran (2018), Nguoi Khong Lo Bi An Dung Sau Cac Thuong Vu Dau Tu Vao Thuong Mai Dien Tu Viet Nam.
Thanh Thanh Lan (2017), Ngan Hang Nha Nuoc 59% Nguoi Dan Co Tai Khoan Ngan Hang.
Thanh Van (2018), Vietnamese E-commerce Market A Tough Nut To Crack.
Viet Khoi (2016), Tiki.vn Bung No Tu Thi Truong Ngach.
Vietnamnet (2017), Vietnamese Game Market Enriches Foreign Gaming Firms.
VNA (2018), E-commerce Boom In Vietnam’s Future: Experts.
VNS (2017), Vietnam’s E-commerce Market Booming.
VNS (2017), Vietnamese Consumers Among Most Demanding On E-commerce.
VNS (2018), VN Enjoys Bright Prospects For E-logistics Development.

EVBN E-commerce industry in Vietnam 45

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