Vietnam’s e-commerce expected to grow further

Despite the global recession that has hit e-commerce markets in the world’s biggest economies, Vietnam appears well positioned, in contrast, and is expected to grow through this phase, according to an article published on the foreign investment consulting firm Dezan Shira & Associates’ Vietnam Briefing website.

The article cited Nirgunan Tiruchelvam, an analyst at Aletheia Capital, as saying that e-commerce markets in developed economies are struggling, but the same may not be experienced in fast growing emerging markets like Vietnam.

The global e-commerce sector was valued at over 3 trillion USD in 2022, according to Statista’s E-commerce Report 2022. The three biggest e-commerce markets – China, the US, and Europe – account for the lion’s share of this total e-commerce trade with a collective 2,723 billion USD in revenue.

However, despite this big number, global e-commerce revenue fell, for the first time ever, in 2022.

A broad range of factors have contributed to contraction in the e-commerce market, with inflation and the pandemic considered two factors that have played a pivotal role in the market’s contraction. Moreover, the Russia-Ukraine conflict provoked energy price shocks impacting fuel prices, according to the article.

For international e-commerce businesses, the global economic turmoil has translated to falling stock prices, and most prominently, layoffs.

This layoff trend, however, has not hit Vietnam quite as badly, the article continued.

Vietnam’s e-commerce market hit 14 billion USD in 2022 and may reach as high as 32 billion USD by 2025. Google’s e-Conomy SEA 2022 report predicts that Vietnam will be in the top three countries attracting the most investors in the e-commerce sector.

AIA Insurance Inc, SBI Holdings, and Alibaba are just a handful of the big names pouring money into Vietnam’s Tiki, Lazada, and Sendo e-commerce marketplaces.

Furthermore, the Ministry of Industry and Trade (MoIT)’s Vietnam E-commerce in 2022 report estimates that the online shopping value per user will also continue to increase.

The article pointed out that in Vietnam, the development of e-commerce has leapfrogged traditional retail like supermarkets and convenience stores.

It makes sense then that McKinsey and Company has forecast that Vietnam’s e-commerce market could be as big as traditional retail as soon as 2025. A trend that is not being seen in other parts of the world.