E-commerce is predicted to boom.

According to the E-commerce Data Platform (Metric), it is projected that in 2024, e-commerce sales, revenue, and sales volume on online retail platforms in Vietnam will continue to grow strongly, potentially reaching over 310,000 trillion VND, a growth of 35%.

Cross-border e-commerce will be an inevitable market trend. (Source: Economy & Urban Affairs)

Trends in cross-border trade

Economic experts all agree that cross-border e-commerce will be an inevitable market trend. With the continuous development of the internet, geographical barriers to buying and selling between countries worldwide are gradually being eliminated. According to the Department of E-commerce and Digital Economy ( Ministry of Industry and Trade ), Vietnam's e-commerce is growing by 25% and is among the top in the world. With such rapid growth, cross-border e-commerce promises to boom in the coming years.

According to Metric, authentic products from China and South Korea are increasingly attracting attention on online retail platforms in Vietnam. The biggest challenge for the development of e-commerce in Vietnam is the lack of strong solutions to curb counterfeit, fake, and substandard goods. In reality, e-commerce platforms act as marketplaces for buying and selling but refuse to take responsibility for guaranteeing the quality of goods and services, leading to the proliferation of counterfeit, fake, and substandard goods that directly affect the reputation of legitimate businesses and the entire e-commerce economy . If e-commerce platforms continue to not require sellers to disclose information, and delivery companies are not held accountable for the origin of goods, then the development of e-commerce will remain difficult.

Furthermore, the mentality of buying only cheap products on e-commerce platforms remains deeply ingrained in Vietnamese consumers. KTS Technology Group, a company recently licensed by the Ministry of Industry and Trade to operate an e-commerce website, has integrated the first VR (virtual reality) application in Vietnam. This is a good solution to help buyers intuitively distinguish between genuine and counterfeit goods, but it will be difficult to scale up across e-commerce platforms due to the significant cost, reaching up to $20 million.

Metric's analysis shows that e-commerce is rapidly growing in low-value product categories, mostly under 500,000 VND. On the five largest e-commerce platforms in Vietnam – Shopee, Lazada, Tiki, TikTok Shop, and Sendo – items priced between 200,000 and 350,000 VND account for 14% of total revenue, representing the largest market share. Following closely behind are items priced between 50,000 and 100,000 VND, accounting for 12% of total revenue.

Opportunities for growth

In 2024, social commerce is expected to skyrocket, offering businesses new opportunities to reach and attract customers. Platforms like Facebook, Instagram, and TikTok already provide seamless shopping experiences, allowing users to purchase goods without leaving the app.

Recently, at the 2024 Tet Street Fair organized by the Hoan Kiem District People's Committee, TikTok Vietnam generously donated an advertising package worth 500 million VND to large local businesses, but securing sales remained difficult. Trinh Tat Thang, Deputy Chief of the Hoan Kiem District People's Committee Office and Deputy Head of the Organizing Committee of the 2024 Tet Street Fair, shared that on the first day alone, 9 TikTok accounts livestreaming sales spent over $12,000 on advertising costs, but sales were still modest. Some accounts reached 20,000 viewers, but converting them into purchases proved challenging, even with the support of professional TikTok sales staff.

According to business forecasts, e-commerce in Vietnam will continue to grow in the coming period, and Hanoi and Ho Chi Minh City will remain areas of fierce competition. Based on warehouse location, statistics from 5 e-commerce platforms (Shopee, Lazada, Tiki, TikTok, and Sendo) show that Hanoi leads with revenue of VND 76,600 billion, accounting for 48% of the market share, followed by Ho Chi Minh City with 32%. In terms of sales volume, Hanoi still leads with 44% market share, followed by Ho Chi Minh City with 30%.

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