Vietnam is expected to be the fastest-growing e-commerce market in Southeast Asia by 2026, with e-commerce gross merchandise value (GMV) reaching US$56 billion by 2026, 4.5 times the estimated value of 2021, according to a recent survey. Vietnam is at the forefront of driving change and seizing opportunities to thrive based on digital transformation in a post-pandemic future.
A study surveyed about 16,700 digital consumers and more than 20 C-level employees in six Southeast Asian countries, including 3,579 survey participants from Vietnam. The report described Southeast Asia as a leader of digital transformation in the Asia-Pacific region and Vietnam as one of the best performers. In Vietnam, seven out of ten consumers have digital access, and the country will have 53 million digital consumers by the end of 2021.
The number of goods categories purchased by Vietnamese online shoppers this year went up 50% compared to 2020, while that of online stores in Vietnam also rose by 40% year-on-year, resulting in a 1.5-fold increase in total online retail sales nationwide. Some 49% of Vietnamese consumers switched to a new online marketplace within the last 3 months, based on considerations of price incentives (45%), product quality (34%), and availability of goods (33%).
For the first time, the payment using cash is at risk of being dethroned with a significant decrease from 60% in 2020 to only 42% in 2021. Safety, privacy, and service fees are the three main concerns of Vietnamese consumers when considering these types of payments.
This year, Vietnamese people spent most of their time using social networks, texting, watching videos, shopping online, and emailing, the report showed. The rapid growth of the market is forecast to continue increasing. It will not only bring about major opportunities but also challenges for the development of online platforms to meet the increasing demand of customers and the market.
OpenGov Asia reported recently that online transactions in Vietnam for the first four months of this year jumped 66% compared with the same period last year, which has been accelerated enormously by the pandemic. There has also been an increase in the use of e-wallets, payments via smartphones and QR codes, and high demand for ‘instant credit’ solutions such as buy-now-pay-later, particularly among those segments of the population that remain unbanked or underbanked. Fintech and e-wallet penetration reached 56% in 2021 for Vietnam, a hike of 40 percentage points from 2017. This penetration level is higher than the average of Asia-Pacific (APAC) emerging markets (at 54%) and developed markets (43%).
The large majority (73%) of Vietnamese consumers are multi-channel banking users. This means they use a combination of digital banks and physical branches. In light of this, banks need to strengthen branches’ omnichannel delivery – measuring both financial goals and customer satisfaction. They should play the role of a digital attacker (digital-only banks using a cloud-native, low-cost platform) or an omnichannel incumbent to stay competitive. In doing so, they must differentiate their digital value proposition from existing offerings, focus on gaining access to a large customer ecosystem to scale fast, and capture transactions and balances as primary banks. Banks in emerging markets are already leading digital innovation but the market is getting crowded and competitive. To stay relevant, banks should think about building (or acquiring) AI/ML capabilities in sales and service, operations, and information technology (IT).
