E-commerce in Vietnam is growing rapidly due to increasing internet penetration and smartphone usage. While online shopping is becoming more popular, e-commerce currently makes up a small portion of Vietnam's retail market. The payment infrastructure is also still developing, with many consumers preferring cash transactions. Mobile applications and social media are emerging areas for digital gifting, but security and credibility issues present challenges to further growth of e-commerce and digital gifts in Vietnam.

2. SNA Vietnam Ltd.,
E-commerce in Vietnam
About E-commerce
in Vietnam
Technical
Infrastructure
E-commerce
Applications
Supporting Activities
Mobile Shopping
Digital
Gifting
SNA Vietnam Ltd.,
Status of
E-commerce in
Vietnam
2

3. SNA Vietnam Ltd.,
E-commerce in Vietnam
About
E-commerce
in Vietnam
• Huge opportunity has not been exploited
Booming in group
buying sites (2010)
- nhommua.com
- hotdeal.vn
- Muachung.vn
- ……………..
• Rapid increase in internet penetration in population from 30
• Forecast annual growth rate: 75%
million users (2011) to 37 million users (2016) (forecast)
• People spend more time on the internet: from 43 minutes to
130 minutes (2008 to 2011)
• The chart shows the forecast
gross merchandise value (2011
to 2015)
• Total value expected to reach 2.8
billion dollars in 2015
( chart figures derived from PWC Feb 2013)
SNA Vietnam Ltd,
3

4. SNA Vietnam Ltd.,
About
E-commerce
in Vietnam
E-commerce in Vietnam
• The market is fragment with no clear trend and leader
• Three main types of e-commerce business:
 Market places
No distinguish
 E-tailers
market leader in
 Online channel of those leading specialist retails
C2C and B2C
• None of those firms could reach 5% of the market share
Remarkable players in each sector
Market Places
E-tailers
SNA Vietnam Ltd,
Market specialist retails
4

5. SNA Vietnam Ltd.,
Technical
Infrastructure
E-commerce in Vietnam
Payment Infrastructure
•
Cash payment declined
•
Non cash payment increase but total value is still low
•
More banks implement Internet Banking
•
Bank cards have became popular means of payment in Vietnam
•
Credit card utilization rate is still low
Payment cards structure
2007 and 2012
Source: The State Bank of
Vietnam
Top 10 bank cards issuers up to 30-11-2011
SNA Vietnam Ltd,
5

6. SNA Vietnam Ltd.,
Technical
Infrastructure
E-commerce in Vietnam
Logistics Infrastructure
•
Postal services have been growth rapidly since 2007
•
Narrowing public postal network gradually, less convenience for
people to access postal services
•
Top three leading companies occupy 53% of the market revenue (78%
in 2009)
•
Market share in Revenue
Smaller firms have their chances to sneak in the market
Number of postal offices
SNA Vietnam Ltd,
6

7. SNA Vietnam Ltd.,
Technical
Infrastructure
E-commerce in Vietnam
IT & Communication Infrastructure
•
Strong growth in number of internet users
•
Increase in internet usage frequency and length
•
84% access internet on desktop computer, 27% access via phone
Growth of Internet users
SNA Vietnam Ltd,
7

8. SNA Vietnam Ltd.,
E-commerce
Applications in
Communities
E-commerce in Vietnam
•
Most frequent activity: information gathering
•
Most popular activity: recreation activities
•
E-commerce is not well-developed, online banking is still weak
•
Online activities different from age group, 15-24 years spend more
time on almost all activities.
SNA Vietnam Ltd,
8

9. SNA Vietnam Ltd.,
E-commerce
Applications in
Communities
E-commerce in Vietnam
•
About 40% of internet users in Vietnam tried online shopping/ auction
•
Less than 10% use online banking
•
People in the North, age group 25-34 shop online more frequent
•
Low trust in online business
SNA Vietnam Ltd,
9

10. SNA Vietnam Ltd.,
Status of
E-commerce in
Vietnam
E-commerce in Vietnam
•
Most popular model of e-commerce in Vietnam is e-shopping site
•
54% of e-market place website has integrated online payment
•
There have been a significant increase in number of people participate
in online transaction.
SNA Vietnam Ltd,
10

11. SNA Vietnam Ltd.,
Status of
E-commerce in
Vietnam
E-commerce in Vietnam
•
E-marketplaces is occupied with the majority of online stores,
classified ads and buying group
•
HR costs take the highest proportion in e-marketplaces operation
SNA Vietnam Ltd,
11

12. SNA Vietnam Ltd.,
Supporting
Activities
E-commerce in Vietnam
•
Changing in law and regulations to foster the secure of e-commerce
•
There are more tertiary institutions provide formal training course for
e-commerce. VCU and HUI are the pioneer in training for e-commerce
•
Increase in demand from companies for well-trained e-commerce staff
•
There have been a strong growth in demand for e-commerce lecturers
SNA Vietnam Ltd,
12

13. SNA Vietnam Ltd.,
Mobile
Shopping
E-commerce in Vietnam
•
Significant increase in accessing internet via hand phones
•
Smartphone market grows 156% in the first 3 quarters of 2013 ( GfK –
2013)
•
Tablet market also reach 233% compare to the same period in 2012
(GfK -2013)
•
Strong growth in mobile internet access devices foster the growth of
e-commerce ( mobile shopping)
•
Lack of apps develop to support online
shopping via mobile phone.
•
SNA Vietnam Ltd,
Lack of security in transaction
13

14. SNA Vietnam Ltd.,
Mobile
Shopping
E-commerce in Vietnam
•
Vietnamese firms are still hesitate to involve in e-commerce
•
The group thinking still affect firm in making decision to involve online
business.
•
E-commerce in Vietnam is picking up the trend to grow, but it is still
remain infant industry.
•
Local government has put effort in developing e-commerce, minimize
fraud cases and nurturing the trust from business and communities.
•
It has been said that Vietnam is the promise land for foreign investor
in e-commerce.
Key to success
- Proper arrangement for payment method and delivery means must
adapt to local conditions, plus relevant planning and investment for
online structure.
SNA Vietnam Ltd,
14

15. SNA Vietnam Ltd.,
Digital Gifting
-
E-commerce in Vietnam
Business and Customer’s problem with traditional gift card
Card storage
Difficult redemption
Difficult in gifting
ideas
Accessibility to gift
Low personalization
Timely problem in
purchasing gift
Mobile
SMS
Social
Network
websites
Email
Digital
Gifting
Mediums
Others
-
Production cost
Storage security
Wide coverage
High operating costs
Difficult in tracking
customer’s behaviors
Apps
Business’s problem
Customer’s problem
SNA Vietnam Ltd,
15

16. SNA Vietnam Ltd.,
E-commerce in Vietnam
Digital Gifting
Information – Digital Gifting Mediums in Vietnam
80
Social Web Users in Vietnam – Top 3 ranking
[VALUE] %
70
[VALUE] %
60
50
40
30
20
[VALUE] %
10
0
Facebook
Zingme
Twitter
Users
Main Applications
-
Social connections
Entertainment
Gifting focus around songs, items in apps, and games integrated on the website
Digital gift items sent through social network website is very limited
(* Note: Application in gift giving term)
SNA Vietnam Ltd,
16

17. SNA Vietnam Ltd.,
Digital Gifting
E-commerce in Vietnam
Information – Digital Gifting Mediums in Vietnam
Main Applications
-
Common items sent through SMS: discount voucher codes, top-up card codes
Other items: songs, movie code, flight tickets
Other usage: gift can be sent through hand-phones applications (OTT, email, websites…etc.)
(* Note: Application in gift giving term)
SNA Vietnam Ltd,
17

18. SNA Vietnam Ltd.,
Digital Gifting
E-commerce in Vietnam
Information – Digital Gifting Mediums in Vietnam
OTT User in Vietnam
Others
Line
Kakaotalk
Zalo
Viber
1.5 million users
4 million users
Over 4 million
users
5 million users
8 million users
0
Main Applications
-
1
2
3
4
5
6
7
8
9
Source: Newspapers (Tienphong, Techinasia, ICTnews,…)
Most of OTT apps are used for messaging, sending picture, call, personal page
Only KakaoTalk and Line have been developed beyond the normal OTT apps
KakaoTalk and Line have are quite similar, can be used to send discounted vouchers by
companies.
(* Note: Application in gift giving term)
SNA Vietnam Ltd,
18

19. SNA Vietnam Ltd.,
Digital Gifting
E-commerce in Vietnam
Developing E-commerce and Digital Gift
Opportunities
 Fast develop internet infrastructure
 Laptops and smartphones are more
affordable than ever.
 Growing awareness of online shopping
 Supporting Laws and Regulations to
foster e-commerce
 Increase in number of business aware
the important of E-commerce
 The market is still not well-developed
SNA Vietnam Ltd,
19

20. SNA Vietnam Ltd.,
Digital Gifting
E-commerce in Vietnam
Developing E-commerce and Digital Gift
Threats
 Security concern for online transactions
 Product/service quality is the main concern of customers
 Vietnam is still a cash economy
 Credibility of online business is still low
 Sellers discrimination to customers who use gift /
discount vouchers is currently the big problem
SNA Vietnam Ltd,
20