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Vietnam to have Fastest-Growing E-commerce Market in SEA by 2026

The Vietnamese e-commerce market is forecast to become the fastest-growing one in Southeast Asia by 2026, according to a recent report. Industry experts have said that because of the pandemic, global economies are recovering erratically, however, cross-border e-commerce in the world, including Vietnam, has still witnessed breakthrough growth.

Global e-commerce is estimated to grow by 28.4% annually between 2020 and 2027. Meanwhile, revenue from business-to-consumer (B2C) e-commerce in Vietnam is expected to increase by over 20% each year. Lai Viet Anh, the Deputy Director of the Vietnam E-Commerce and Digital Economy Agency (iDEA), under the Ministry of Industry and Trade, said over the last ten years, e-commerce in the country has continually grown by 25-30% while its size increased to US $13.7 billion in 2021. It has made up over 7% of the total flows of consumer goods and services and become an important distribution channel, in addition to traditional ones.

Despite the pandemic’s impacts in 2020 and 2021, e-commerce has still been flourishing in Vietnam. It is forecast to post double-digit growth this year to rank third in Southeast Asia, according to Anh. In fact, the pandemic fueled a significant uptick in e-commerce, which recorded a 16% growth last year. In 2021, it reached US $13.7 billion in retail revenue, according to the White Book on Vietnamese E-business 2022.

Although the pandemic drove the e-commerce market, it slowed down economic growth, which was the lowest in 30 years last year (2.58%), with key services sub-sectors experiencing a downturn. Data from the General Statistics Office showed that retailing and wholesaling declined 0.21% year-on-year, causing the economy to decrease by 0.02 percentage points. Warehouse and logistics dropped by 5.02% and lodging and catering services by 20.81%, leading to a drop in contribution by 0.3% and 0.51%, respectively, to the GDP growth.

Meanwhile, the share of turnover from e-retailing to last year’s total retail sales of goods and services was 7%, a year-on-year rise of 27% from 2020. E-retailing is forecast to surge 20% this year to US$ 16.4 billion, compared to US$ 5 billion in 2015. A 2022 study by a big data analysis company indicated that Vietnam is emerging as the second largest e-commerce market in Southeast Asia, second only after Indonesia.

The White Book on Vietnamese E-business 2022 also reported that with online marketplaces now a vital distribution channel in the era of digitalisation, Vietnamese enterprises are investing more in expanding their presence on these platforms. Those doing business on social networks, spurred 41% in 2021 and 57% in 2022, according to the book.

In September, OpenGov Asia reported that Vietnam’s e-commerce value will reach US$ 39 billion by 2025. The total revenue of Vietnam’s Internet economy is forecast to reach US$ 57 billion by 2025. Vietnam has the second highest percentage of consumers shopping online in the region, after Singapore. The country’s B2C retail e-commerce revenue this year is estimated at US $16.4 billion.

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