What is the "bright door" for e-commerce "players" in the face of fluctuations?

Despite double-digit growth, Vietnam’s e-commerce is not immune to challenges. This forces e-commerce platforms to continue promoting strategies to maintain their position and operate effectively and sustainably.

Headwinds

The 2023 Online Retail Market Overview Report said that revenue on 5 e-commerce platforms (Shopee, Lazada, Tiki, Sendo, TikTok Shop) last year reached VND 232,134 billion, an increase of more than 53% compared to 2022. E-commerce continues to be considered a bright color with outstanding growth and vibrant developments, contributing positively to the country's digital economy.

(Source: Metric)

However, e-commerce is not immune to the "fever" of the global economy. Despite the total value of goods transactions continuously breaking old peaks, the e-commerce industry is still experiencing a wave of layoffs like many other technology companies. In 2023, most e-commerce platforms in the Asia-Pacific region will reduce their staff size, and this will continue into early 2024.

In fact, this is not a surprising move as these businesses are struggling to find a balance under pressure from both inside and outside. On the one hand, after more than a decade of tirelessly “burning money”, e-commerce “players” in the market are under pressure to optimize costs and seek profits, especially in the context of investment capital no longer being “easy” and abundant. On the other hand, at the same time, these platforms still have to increase their competitiveness in the face of rapid changes in new technology and shopping trends.

This makes 2024 continue to be considered a turbulent year for the economy in general and e-commerce in particular. In Vietnam, while the market share has gradually taken shape, the "players" still need to continue to promote strategies to maintain their position, do business effectively and sustainably.

Change: Strategy in the "fever" of the economy

In addition to adjustments in personnel structure, from 2023 to present, e-commerce platforms have also shown efforts to change their business strategies.

Tiki has changed its brand identity since August 2023, including the logo and tagline. The message “Search and Save” which was the starting point of the brand name “Tiki” has also been changed to “Good and Fast”, to emphasize the goal of providing only 100% genuine goods and promoting fast delivery. At the same time, Tiki also made a move to focus on the 3P model, also known by the more familiar name Tiki Trading, where the platform imports goods, controls prices, sells and transports.

Meanwhile, Shopee has invested heavily in developing a livestream sales model. At the same time, its return policies have also changed significantly - which, according to this e-commerce platform, is to better protect consumers.

Lazada - one of the main players in the market, is also making new calculations after more than a decade of presence in Vietnam. As a business that has contributed significantly to the opening and shaping of the potential e-commerce market in Vietnam, Lazada has built a certain position in the hearts of consumers with its genuine store model (LazMall) that focuses on many prestigious brands from domestic to international. There are even brands that only appear exclusively on Lazada. That is why Lazada is the platform that records the second highest average value per transaction product in the market, according to the latest report by YouNet ECI. Specifically, the average value of each product sold on Lazada reaches more than 162,000 VND/product.

But now is also the time for this platform to come up with key strategies to expand its market share, most clearly seen in the application of smart technology to support the experience for both buyers and sellers on the platform.

From the seller's side, Lazada uses content creation technology that can be optimized for SEO, helping stores reach customers better through the AI-powered product information creation feature.

According to Mr. Nguyen Trung Kien - a seller on Lazada: "You only need to provide some basic information such as a photo, full product name, immediately the AI of the E-commerce Platform will easily create for you a product listing with full information, saving up to 80% of the time compared to posting a normal product. Increase the seller's sales experience. According to experience, products supported by AI will be suggested for more searches, giving results to consumers, increasing access rates and sales".

According to Mr. Trung Kien, this new feature of Lazada helps sellers save up to 80% of the time when posting product information compared to the usual way.

For consumers, in addition to a series of applications that have been introduced by this platform in the past, Lazada has also recently deployed many features with AI applications, such as the Featured Product Recommendation feature. This feature was created to support users to quickly grasp core information about the product on the first view and help increase trust in product quality - which is considered a key factor when making purchasing decisions of users on e-commerce.

Focusing on technology to enhance the experience is considered a sustainable path to help Lazada retain both sellers and buyers, establishing a balance in the e-commerce ecosystem, instead of just focusing on discounts and free-shipping.

2024 is expected to continue to be a boom year for the e-commerce market. Despite their different directions, e-commerce platforms are showing continuous efforts to innovate to overcome common market challenges and seize new growth opportunities.

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