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| Cross-border e-commerce will be an inevitable trend of the market. (Source: Economy & Urban) |
Cross-border trade trends
Economic experts all affirm that cross-border e-commerce will be an inevitable trend of the market. With the continuous development of the internet, geographical barriers in buying and selling and trading between countries around the world are gradually being eliminated. According to the Department of E-commerce and Digital Economy (Ministry of Industry and Trade), Vietnam's e-commerce grew by 25% and is among the top in the world. With such a rapid growth rate, cross-border e-commerce promises to explode in the coming years.
According to Metric, genuine stores from China and Korea are increasingly attracting attention on online retail platforms in Vietnam. The biggest problem for Vietnam's e-commerce to develop is having strong solutions to limit counterfeit, fake, and poor quality goods. In fact, e-commerce trading platforms organize markets to buy and sell but refuse to take responsibility for ensuring the quality of goods and services, so the situation of counterfeit, fake, and poor quality goods is rampant, directly affecting the reputation of genuine business brands in particular and the entire e-commerce economy in general. If e-commerce platforms still do not require sellers to publicly disclose information, delivery companies are not responsible for the origin of goods... then the development of e-commerce will still face many difficulties.
In addition, the mentality of going to e-commerce platforms just to buy cheap products is still deeply rooted in Vietnamese consumers. KTS Technology Group, a company that has just been licensed by the Ministry of Industry and Trade to operate an e-commerce website, has integrated the first VR virtual reality technology application in Vietnam. This is a good solution for buyers to intuitively distinguish between real and fake goods, but it will be difficult to replicate for e-commerce platforms because the cost is quite high, up to 20 million USD.
Metric's analysis shows that e-commerce products are growing rapidly in low-value product categories, mostly under 500,000 VND. On the 5 largest e-commerce platforms in Vietnam today, Shopee, Lazada, Tiki, TikTok Shop and Sendo, products with a value between 200,000 - 350,000 VND account for 14% of total revenue, the highest market share. Right behind are products with a value between 50,000 - 100,000 VND, accounting for 12% of total revenue.
Opportunity for growth
Social commerce is expected to skyrocket by 2024, offering businesses new opportunities to reach and engage customers. Platforms like Facebook, Instagram, and TikTok already offer seamless shopping experiences, allowing users to make purchases without leaving the app.
Recently, at the 2024 Street Tet Fair organized by the People's Committee of Hoan Kiem District, TikTok Vietnam generously donated an advertising package worth 500 million VND to large local enterprises, but it was still difficult to "explode orders". Deputy Chief of Office of the People's Committee of Hoan Kiem District Trinh Tat Thang, Deputy Head of the Organizing Committee of the 2024 Street Tet Fair, shared that on the first day alone, 9 TikTok livestream sales accounts used more than 12,000 USD for advertising costs, but sales were still modest. There was an account that reached 20,000 views, but converting to purchases was not simple even with the support of professional TikToker sales.
According to business forecasts, e-commerce in Vietnam will continue to increase in the coming time and Hanoi and Ho Chi Minh City are still areas with fierce competition. According to warehouse locations, statistics of 5 platforms Shopee, Lazada, Tiki, TikTok and Sendo, Hanoi e-commerce ranks first with revenue of 76,600 billion VND, accounting for 48% of the market share, Ho Chi Minh City ranks second with 32% of the market share; market share by sales volume, Hanoi is still first with 44% of the market share, Ho Chi Minh City ranks second with 30% of the market share.
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