Online shops see robust business amid a global pandemic
According to Vietnam’s e-Commerce and Digital Economy Agency under the Ministry of Industry and Trade, the growth rate of the local e-commerce sector in 2020 was 18% and valued at USD11.8bn. It accounted for 5.5% of the country’s retail goods and consumer service revenue.
Nguyen Chanh Trung, a shop owner on Lazada, said he started his online business after working for five years in the construction sector. His shop was opened on the first days of the Covid-19 outbreak in Vietnam and gained unexpected profits.
“I learned everything from scratch and tested out new ideas. I also attended training classes offered by Lazada to optimise the business and take care of the customers,” he said. “Online trading minimise staff and rental costs. After a year, staff numbers fell from 20 to 10 and revenue increased by 10%.”
Even though Trung had a website to introduce his products before, his business was mostly offline and badly affected by Covid-19.
Another online seller also saw great profits from selling face masks and handwash.
The number of sellers on Lazada doubled in 2020. LazMall, a trade site based on Lazada saw both customers and orders double on normal days and triple during festivals. Another e-commerce platform Tiki said in March and April 2020, the number of orders on the platform increased by 15% compared to the two busiest months in 2019. Sometimes, there were 4,000 orders placed per minute.
Vietnamese sellers also went to international e-commerce platform to sell their products overseas like Amazon or Alibaba. Over USD1m worth of products were sold via Amazon in 2020, triple the total amount sold in 2019.
Dang Hoang Hai, head of Vietnam’s e-Commerce and Digital Economy Agency said Covid-19 actually gave a strong boost to online businesses, forcing many firms and individual sellers to go online. Decision 645 issued by the government about the e-commerce development plan for 2021-2025 also helped speed up the transition.
Estimations from Google, Temasek and Bain and Company showed that Vietnam’s e-commerce market would be worth USD52bn and stand among the three biggest markets in ASEAN in 2025 if the growth rate stays at 29% a year.
Tran Toan Thang from the National Centre for Socio-Economic Information and Forecast said the e-commerce market would have developed strongly with or without the pandemic. However, Covid-19 has been a strong boost to the local market.
“Some product sales increased by 300% online. Because of the pandemic, shopping online has become a habit now,” he said.