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INTERNET RETAILING IN

VIETNAM
Euromonitor International
January 2016

INTERNET RETAILING IN VIETNAM

LIST OF CONTENTS AND TABLES


Headlines ..................................................................................................................................... 1
Trends .......................................................................................................................................... 1
Competitive Landscape ................................................................................................................ 2
Prospects ..................................................................................................................................... 2
Channel Data ............................................................................................................................... 3
Table 1
Table 2
Table 3
Table 4
Table 5
Table 6

Internet Retailing by Category: Value 2010-2015 ......................................... 3


Internet Retailing by Category: % Value Growth 2010-2015 ........................ 3
Internet Retailing GBO Company Shares: % Value 2011-2015 ................... 4
Internet Retailing GBN Brand Shares: % Value 2012-2015 ......................... 4
Internet Retailing Forecasts by Category: Value 2015-2020 ........................ 5
Internet Retailing Forecasts by Category: % Value Growth 2015-2020 ....... 5

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INTERNET RETAILING IN VIETNAM

INTERNET RETAILING IN VIETNAM


HEADLINES
Internet retailing grows by 42% in current value terms to reach VND15 trillion in 2015
Major retailers efforts to improve payment methods greatly contribute to boost sales
Mobile World JSC leads the competitive environment with a 10% value share
Over the forecast period, internet retailing is estimated to record a value CAGR of 25% at
constant 2015 prices

TRENDS
Realising consumers unwillingness to use financial cards due to high banking fees, all major
internet retailers offer Cash On Delivery as the default payment method. On the other hand,
the biggest players like Lazada and Mobile World JSC also offer online payments by
instalments. In addition, credit card owners can enjoy instant access to online payment by
instalments by using their credit cards from banks associated with the retailers. With so many
convenient and affordable payment methods offered by online stores, consumers are
increasingly shopping online, which is partially responsible for the channels impressive
performance in 2015.
Internet retailing grew by 42% in 2015 to achieve current value sales of VND15 trillion,
continuing the strong growth seen in the previous year. Key players are making great efforts
in boosting internet retailings growth by diversifying payment methods, offering special
discounts and investing in online marketing, which partially contribute to internet retailings
success. Additionally, the government is also playing an important role in fostering ecommerce sales by organising Online Black Friday and Online Autumn Shopping Day. The
events are gaining increasing popularity with more retailers and consumers joining since its
first launch in 2014.
Apparel and footwear is the ubiquitous product group found online in Vietnam. Apparel is an
important product for internet retailing as it is popular among young urban consumers, who
are also the main consumers of online shopping. These consumers constantly want to update
their wardrobes with the newest fashion trends and purchase new clothes to show off their
individual style. Thus, many online apparel retailers tap into this growing trend by importing
inexpensive fashionable clothes from countries such as Thailand and China to distribute in
Vietnam.
Home care, beauty and personal care, homewares and home furnishings are some of the
product types to witness negligible sales in 2015. The main reason is that the majority of
online shoppers are young tech-savvy consumers who do not pay much attention to home
care, homewares and home furnishing products. Even though consumers of beauty and
personal care tend to be willing to pay for this type of product, most of them prefer to visit
physical stores to test the products and get free consultations from beauty specialists.
Most online consumers do some research to look for the cheapest and most attractive
promotions before making the final purchasing decision, which results in strong competition
among the different internet retailers present. As a result, most stores try to provide the most
prominent discounts and promote their offer on popular social networking channels to attract
more customers to visit and purchase goods from their stores.
Cash On Delivery is the customary payment method because Vietnam remains a cash society
in 2015. However, card payments are widely accepted by all major internet retailers.

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INTERNET RETAILING IN VIETNAM

Following the furious growth of tablets and smart phones, m-commerce is playing an
increasingly important role in contributing to the whole of internet retailings performance. Key
players, namely Mobile World JSC and Recess Retail & Delivery Co Ltd, both offer special
discounts for in-app purchases to encourage more consumers to become familiar with this
novel shopping experience, which has the potential to become an essential selling channel
over the forecast period.

COMPETITIVE LANDSCAPE
Mobile World JSC led the competitive landscape of internet retailing with a 10% value share
in 2015, gaining one percentage point compared to 2014. Its leading position is due to its
flexible payment method, allowing consumers to be verified for instalment plans by just a
telephone call rather than having to go to the physical stores to submit various papers and
wait.
Others witnessed the most significant share loss of six percentage points, due to new small
players inability to compete against giant retailers.
Instead of targeting a defined group of consumers, most operators offer a variety of products
from different brands and price ranges to reach as many customers as possible. There is not
much differentiation in terms of online store design among leading players namely Mobile
World JSC, Nguyen Kim Trading JSC and Vien Thong A Import Export Trading Production
Corp.
With rampant growth during the review period, internet retailing is becoming the most
important non-store retailing channel, posing direct competition to homeshopping. In order to
survive the strong competition, most homeshopping operators decide to run online stores
alongside homeshopping.
Despite the aggressive penetration of hundreds of new marketplaces entering internet
retailing in 2015, pure internet retailers remain as the inferior players in comparison with
bricks-and-clicks. This is because the main source of online customers comes from techsavvy consumers who have a special interest in tech-related products. As a result, electronics
and appliances bricks-and-clicks receive substantial support from online consumers. In
addition, consumers also tend to place greater trust in online stores from bricks-and-clicks
players, because they already have a perennial prestige.
E-markets recorded strong growth, with 283 online marketplaces officially registered with the
government in 2014. Lazada and Zalora are among the most popular online marketplaces in
the country. Their popularity is thanks to their professional customer service and support as
well as their instant response and delivery service.
In response to Lazadas outstanding performance, Vingroup the most noticeable new
entrant in 2015, has established a subsidiary named VinEcom with a huge charter capital of
over VND1 trillion. On 15 August 2015, VinEcom launched its first online marketplace, called
Adayroi, offering various product types that are uncommon in online stores such as
automobiles, motorbikes and fresh produce.
There is no noticeable merger and acquisition activity in 2015.

PROSPECTS
Over the forecast period, internet retailing is estimated to record a value CAGR of 25% at
constant 2015 prices, a dramatic plunge against the review period value CAGR of 59% at
constant 2015 prices. The main reason is that internet retailing is expected to surpass its

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nascent stage to enter a more stable developing period. As such, its forecast growth is
expected to slow down significantly.
Apparel and footwear, and electronics and appliances will remain as the most popular
products sold online because they are the top products receiving the greatest attention from
young tech-savvy consumers.
Furniture, and beauty and personal care are expected to remain negligible in internet retailing
over the forecast period. Furnitures bulkiness makes it troublesome for both retailers and
consumers if the products do not meet customers expectation. Product exchanges or returns
can become an inconvenience and cause high shipping costs. Beauty and personal care on
the other hand will remain an unpopular product category online because most consumers
still prefer to go to physical stores to receive free consultations and test different products on
their skin before making a final purchasing decision.
Over the forecast period, m-commerce will play an increasingly important role in boosting
sales for overall internet retailing. With the app installed in consumers portable devices,
retailers have the best opportunities to send notifications to their phones and tablets to
introduce newest products and the best discount deals. This is not only a very cost-effective
marketing method but also a direct way to reach target customers.

CHANNEL DATA
Table 1

Internet Retailing by Category: Value 2010-2015

VND billion

Apparel and Footwear


Beauty and Personal Care
Consumer Appliances
Consumer Electronics
Consumer Health
Food and Drink
Home Care
Home Improvement and
Gardening
Homewares and Home
Furnishings
Media Products
Personal Accessories
and Eyewear
Pet Care
Traditional Toys and
Games
Video Games Hardware
Other Internet Retailing
Internet Retailing
Source:

Table 2

2010

2011

2012

2013

2014

2015

369.5
128.8
391.3
-

1,160.4
305.3
1,067.9
-

2,243.6
511.9
1,753.9
-

3,448.0
707.8
2,700.1
-

4,614.8
937.3
3,814.7
-

5,773.7
1,135.7
5,453.1
-

38.9
-

98.8
-

145.2
-

203.3
-

267.4
-

333.1
-

0.0
-

0.0
-

0.0
-

68.7
997.3

184.4
2,816.7

284.2
4,938.9

367.9
7,427.1

949.5
10,583.6

2,286.6
14,982.2

Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Internet Retailing by Category: % Value Growth 2010-2015

% current value growth, retail value rsp excl sales tax

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Apparel and Footwear


Beauty and Personal Care
Consumer Appliances
Consumer Electronics
Consumer Health
Food and Drink
Home Care
Home Improvement and Gardening
Homewares and Home Furnishings
Media Products
Personal Accessories and Eyewear
Pet Care
Traditional Toys and Games
Video Games Hardware
Other Internet Retailing
Internet Retailing
Source:

Table 3

2010/15 Total

25.1
21.2
43.0
24.6
14.2
140.8
41.6

73.3
54.5
69.4
53.6
101.6
71.9

1,462.4
781.4
1,293.7
756.2
3,227.4
1,402.3

Internet Retailing GBO Company Shares: % Value 2011-2015

Mobile World JSC


Rocket Internet GmbH
FPT Corp
Nguyen Kim Trading JSC
Vien Thong A Import
Export Trading
Production Corp
Pico JSC
Others
Total

Table 4

2010-15 CAGR

Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

% retail value rsp excl sales tax


Company

Source:

2014/15

2011

2012

2013

2014

2015

14.2
5.3
2.6

11.6
0.2
0.0
5.4
3.8

9.9
1.3
0.3
4.8
4.3

9.0
6.0
3.1
4.6
3.7

10.0
9.3
5.4
4.3
3.1

3.6
74.3
100.0

2.5
76.5
100.0

2.2
77.3
100.0

2.0
71.5
100.0

1.7
66.1
100.0

Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Internet Retailing GBN Brand Shares: % Value 2012-2015

% retail value rsp excl sales tax


Brand
Company (GBO)
Mobile world
3rd Party Merchants
FPT Shop
Nguyenkim - Saigon
Shopping Center
Vien Thong A

Pico
lazada
Zalora
Others
Total

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Mobile World JSC


Rocket Internet GmbH
FPT Corp
Nguyen Kim Trading JSC
Vien Thong A Import
Export Trading
Production Corp
Pico JSC
Rocket Internet GmbH
Rocket Internet GmbH

2012

2013

2014

2015

11.6
0.1
0.0
5.4

9.9
0.5
0.3
4.8

9.0
4.3
3.1
4.6

10.0
7.4
5.4
4.3

3.8

4.3

3.7

3.1

2.5
0.0
0.0
76.5
100.0

2.2
0.8
0.1
77.3
100.0

2.0
1.5
0.2
71.5
100.0

1.7
1.6
0.3
66.1
100.0

INTERNET RETAILING IN VIETNAM

Source:

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Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 5

Internet Retailing Forecasts by Category: Value 2015-2020

VND billion

Apparel and Footwear


Beauty and Personal Care
Consumer Appliances
Consumer Electronics
Consumer Health
Food and Drink
Home Care
Home Improvement and
Gardening
Homewares and Home
Furnishings
Media Products
Personal Accessories
and Eyewear
Pet Care
Traditional Toys and
Games
Video Games Hardware
Other Internet Retailing
Internet Retailing
Source:
Note:

Table 6

2015

2016

2017

2018

2019

2020

5,773.7
1,135.7
5,453.1
-

6,957.7
1,351.0
7,513.9
-

8,291.8
1,617.8
9,905.7
-

9,903.7
1,896.0
12,378.2
-

11,746.9
2,129.6
17,017.5
-

13,933.1
2,303.9
20,985.4
-

333.1
-

401.3
-

477.6
-

561.1
-

650.9
-

745.4
-

0.0
-

0.0
-

0.0
-

0.0
-

0.0
-

0.0
-

2,286.6
14,982.2

4,301.7
20,525.6

6,390.4
26,683.2

8,081.3
32,820.4

7,839.6
39,384.5

8,506.0
46,473.7

Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Forecast value data in constant terms.

Internet Retailing Forecasts by Category: % Value Growth 2015-2020

% constant value growth, retail value rsp excl sales tax

Apparel and Footwear


Beauty and Personal Care
Consumer Appliances
Consumer Electronics
Consumer Health
Food and Drink
Home Care
Home Improvement and Gardening
Homewares and Home Furnishings
Media Products
Personal Accessories and Eyewear
Pet Care
Traditional Toys and Games
Video Games Hardware
Other Internet Retailing
Internet Retailing
Source:
Note:

2015/2016

2015-20 CAGR

2015/20 TOTAL

20.5
19.0
37.8
20.5
6.2
88.1
37.0

19.3
15.2
30.9
17.5
-97.6
30.0
25.4

141.3
102.9
284.8
123.8
-100.0
272.0
210.2

Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Forecast value data in constant terms.

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