The technology revolution is changing how consumers shop forever with the switch from traditional physical stores to E-commerce. As one of the fastest-growing countries, Vietnam is quick to catch on the E-commerce trends, expanding at an unprecedented rate.
By observing the growth rate & B2C Revenue over the last 5 years, people can easily get an overview about the market:
2020 is marked with the Covid pandemic and economic slowdown, however it’s also a pivotal year for the entire e-commerce industry in Vietnam when there are specific signs that the market is gradually becoming more mature in many aspects. A lot of businesses have decided to move their stores online, and require the help of Software Development companies.
While a Software consultant can guide on how to build an ecommerce site, the business owner must define the requirements, the style and site map. In order to do that, they must do their homework to gain insight and to understand market needs.
During the last decade, many E-commerce marketplaces were born and became familiar to users, such as: Tiki, Shopee, Lazada, Sendo...etc. On the one hand, business owners must research existing players to get to know the competitors and study the customers' behaviors on the other hand.
Many questions need to be answered such as:
- How do my customers shop?
- What are their budgets?
- What goods and services are they looking for?
- What factors will influence their shopping behavior?
To give investors, businesses and Software development experts a general view, a survey was realized in 2020 by the Ministry of Industry & Trade based on the results collected from 1,002 individuals nationwide. The questionnaire was multiple choices & each participant has the right to tick more than one option. The following graphs will show some general characteristics of Vietnamese behaviors.
a. Common Goods/services purchased online
Vietnam is a very young country with most of its population under the age of 30. The Internet connection is also very good and cheap, which leads to a total of approximately 50 million Internet users. Young people have become familiar with online shopping. The most common goods/ services purchased online are Spa & beauty services and other entertainment products.
b. Common Online shopping channels
In 2019, online shoppers prefer to shop via Social networks and mobile applications than via Ecommerce platforms. According to the report, the number of E-commerce users has decreased by 22%. This observation is quite understandable due to the development of Social commerce - which makes the experience of shopping much more interactive. Users can easily check the profile of the shop, chat with shop owners and consult with their friends on the purchase. In recent years, Facebook business retail store pages have become very trendy. Twitter and Pinterest have also added the buy buttons in order to allow users to shop without leaving their sites.
Last year, many Software development companies also observed an increase in requests for building social commerce platforms.
c. Common Payment method
The most common payment method is still Cash on delivery - which means users shall pay by cash to the shipper when receiving the goods. Even though, e-wallet market is rather crowded with over 30 providers, the number of transactions via this means of payment is relatively low (only 18%). According to experts' opinion, the biggest problem is that providers fail to show clear advantages over traditional banks. In fact, most services offered by e-wallet are now included in the mobile app offered by banks.
d. Factors influencing online shopping
There are many factors that may influence the shopping decision of any user, which can be listed in the graph below. According to the report, Vietnamese consumers care the most about web design & information security. That’s why many Software development companies spend a lot of time working on these crucial points. How to give the best user experience and assure a secured transaction are 2 questions that always haunt the IT expert.
e. Reasons for choosing an Ecommerce platform
Knowing the reason why a user chooses an ecommerce platform is a good way to adjust the marketing plan of a business owner. Obviously, word of mouth is still very effective, even in today's society. Another report from Hubspot also states that: “ 90% of people trust suggestions from family and friends while 70% trust consumer reviews online”.
f. Top concerns of online shoppers
The graph below shows the top concerns of users while shopping online.
In summary, rising Internet and smartphone penetration coupled with a large young population has made Vietnam a very potential market for e-commerce. Although it is now dominated by several big players, there is still room for other competitors. Why not consider Vietnam as your next target? If you need consultation from a leading Software development company, feel free to contact us!
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