Mid term report research on e commerce industry in vietnam period 2020 – 2024 and future prospect

Buy Now, Pay Later Compound Annual Growth Rate Consumer to Business Consumer to Consumer Comprehensive and Progressive Agreement for Trans- Pacific Partnership EU-Vietnam Free Trade Agre

2020 — 2024 and future prospect

Course: Essentials of Data Analysis Course code: QTRE311

Hanoi, 3/2025

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TABLE OF CONTENTS

CHAPTER 2 ANALYSIS ON E-COMMERCE INDUSTRY IN VIETNAM

2.1.1 Historical CONUGX na 4

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CHAPTER 3 FUTURE PROSPECT AND RECOMMENDA TIONS 36

3.1 Future Outlook and Projections

3.1.1 Market ha cố nố ốcố

SA Cua số

3.2 Strategic Opportunities for Growth, Innovation, and Differentiation

3.2.1 Leverage Regulatory Reform to Build Consumer TTHSI

3.2.2 Expanding Access through Inclusive Market DevelODIeHH

3.2.3 Driving Personalization through Predictive Technologies

3.2.4 Advancmeg Cross-border E-cornmunerce CapdbiÌifi@s -«-«««ec+ 3.3 Recommendation

3.3.1 Key RECOMMeNAATIONS oe

CONCLUSION

REFERENCE

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Buy Now, Pay Later

Compound Annual Growth Rate

Consumer to Business

Consumer to Consumer

Comprehensive and Progressive Agreement for Trans- Pacific Partnership

EU-Vietnam Free Trade Agreement

Foreign Direct Investment

Fast Moving Consumer Goods

Free Trade Agreement

Gross Merchandise Value

General Statistics Office

Vietnam E-commerce and Digital Economy Agency Mergers and Acquisitions

Micro, Small and Medium Enterprises

Ordinary Least Square

Research and Development

Regional Comprehensive Economic Partnership Small and Midsize Business

Small and Medium-size Enterprises User Interface

Eigure 2.1 Annual GMV of the Internet economy in Vietnam (2015-2025) 5 Figure 2.2 Revenue e-commerce B2C in Vietnam 2018 - 2023 - -s-cs-<s++ 6 Figure 2.3 Annual GMV of the internet economy in Vietnam in 2023 - 7 Figure 2.4 E-commerce YoY Growth (%) by Revenue, Volume & Price 8 Figure 2.5 Consumer goods e-commerce spending in Vietnam 2024, by category 8 Figure 2.6 Growth of e-commerce expenditure on consumer goods among internet users

lÀ 412i ì80)0020700101057 9 Figure 2.7 Market share of e-commerce platforms based on gross merchandise value in

Eigure 2.8 Vietnam's online sales 2022 - 2244 .-. 5+ + ekxekserserseesrrsrre 14 Figure 2.9 Penetration rate of livestreaming platforms in Vietnam by quarters 15 Figure 2.10 2023 Vietnam Consumer’s Payment Atfitudes -c c++c+scsses 22 Figure 2.11 Sales volume and Market turnover of 5 e-commerce platforms 2022 - 2024

— 25 Figure 2.12 E-commerce shopping behavior by income level and age group 35 Eigure 3.1 Summary oufput oŸregression model for markef S1z€ . - - 37 Figure 3.2 Growth Rate Pr€CICfIOTN - 5 + 2 x11 *91 5 15 15 19 19 19x re 40

LIST OF TABLES 'Table 2.1 Market size e-commerce In Vietnam 2018 - 2023 - -+cc+-c+scssxss 6

Table 3.2 Exponential Smoothing Testing ReSuÌL( - - + <++<+s.+s.>seresrrerrersrs 39 Table 3.3 Exponential Smoothing and Moving Average Testing Result 39

CHAPTER 1 INTRODUCTION

1.1 Rationale of the research

E-commerce has become a popular and growing shopping method in the world in recent years, especially in Vietnam, as an emerging e-commerce market in Southeast Asia

(Choi & Mai, 2018) E-commerce in Vietnam, with an annual rate exceeding 25%, reaching

a market size of over 16 billion USD in 2022 (VECOM, 2023) With a tech-savvy population and rapidly growing internet usage, Vietnam is a fertile ground for e-commerce businesses to thrive As a result, the country’s online shopping market 1s booming, with e- commerce sales outpacing even some of the most modern retail stores (Statista, 2023c)

With the strike of the pandemic, amidst the inevitable lockdowns and restrictions,

even the traditional brick and mortar consumers increasingly went online, leading to the e- commerce boom This became evident by the fact that the top e-commerce players in Vietnam not only remained unaffected but also grew exponentially compared to their traditional counterparts The demand was driven by the pandemic, and it provided opportunities for several other e-commerce retailers and helped them to emerge to a whole new level Vietnam, Southeast Asia’s fastest-growing e-commerce economy, has seen a sharp increase in the number of consumers turning to online platforms for their shopping needs According to a survey conducted in 2022, over 60% of internet users in Vietnam reported having purchased a product or service online, with the number of online shoppers reaching 57.6 million people (Statista, 2023b) This surge in demand has led many businesses to establish an online presence, either by launching their own e-shops or selling products on popular marketplaces and platforms (Statista, 2023a)

Given the sector's importance and strong growth potential, examining its trajectory from 2020 to 2024 will contribute to a deeper understanding of Vietnam’s digital economy and future opportunities Insights from this study can help businesses, policymakers, and investors navigate the evolving e-commerce landscape and make strategic decisions accordingly

1.2 Purpose and scope

This report aims to analyze the growth and transformation of Vietnam’s e-commerce industry from 2020 to 2024 It examines how digital transformation, evolving consumer behavior, and technological advancements have shaped the online retail sector By assessing historical trends, current market structures, and future projections, the report provides actionable insights for policymakers, investors, and industry leaders to support strategic decision-making

The scope of this report centers on Vietnam’s business-to-consumer (B2C)

e-by platform type, product category, and geographic distribution It explores consumer profiles, preferences, and purchasing behavior to identify demand patterns, while also analyzing the competitive landscape by evaluating the strategies, market share, and performance of leading and emerging players The report further examines the key driving forces behind the industry’s transformation, including technological advancements, regulatory developments, and shifts in supply and demand dynamics

Beyond identifying challenges and risks, the report highlights growth opportunities and provides projections for the next 3 - 5 years, outlining potential pathways for Vietnam’s e-commerce industry to strengthen its position as a regional leader The analysis is conducted at a national level, with particular emphasis on online marketplaces and digital transformation trends influencing the sector

1.3 Industry definition

E-commerce, or electronic commerce, refers to the buying and selling of goods and services or the transmission of funds and data over an electronic network, primarily the internet E-commerce transactions typically fall within four categories: business-to-

consumer-to-business (C2B) In Vietnam, the industry is characterized by high mobile commerce penetration, a shift toward cashless transactions, and the integration of advanced logistics solutions to enhance delivery efficiency Vietnam’s e-commerce ecosystem consists of different business models, including online marketplaces like Shopee and

Lazada, retail e-commerce platforms such as Tiki and Sendo, social commerce via

platforms like Facebook and TikTok

E-commerce stands out from traditional commerce due to its global reach, 24/7 accessibility, cost efficiency, and AI-driven personalization It allows businesses to expand beyond geographical boundaries, automate operations, and optimize customer engagement through data-driven recommendations Additionally, it offers a wide range of payment options (credit cards, e-wallets, cryptocurrencies), increasing transaction flexibility E-commerce encompasses a diverse range of products and services, broadly classified into three primary categories: physical goods, digital goods, and e-commerce services Physical goods include tangible products that require shipping and delivery, such as electronics, apparel, food, and household items These can be further categorized into

durable goods, including automobiles, televisions, and furniture, and non-durable goods,

such as food and beverages In contrast, digital goods refer to intangible products that exist exclusively in digital form, including e-books, software, digital media, and online subscriptions Finally, e-commerce services involve transactions where monetary value is

exchanged for specific customer outcomes These services span various industries, including online education, digital marketing, healthcare, and transportation, reflecting the expanding role of e-commerce in facilitating both product-based and service-oriented transactions The industry continues to evolve as a key driver of Vietnam’s economic growth trajectory, positioning the country as an increasingly prominent player in the global e-commerce ecosystem

1.4 Methodology

This report is based on a combination of secondary research and quantitative forecasting techniques to analyze the current state and future outlook of Vietnam's e- commerce industry To ensure a reliable and comprehensive analysis, the report relies on secondary data collected from a variety of trusted sources

The analysis utilizes data from reputable industry reports, government publications such as the Vietnam E-commerce White Paper published by the E-commerce and Digital Economy Agency (iDEA) of the Ministry of Industry and Trade Additionally, publicly

available data from the General Statistics Office, Statista and e-commerce market research

platforms including YouNet ECT, Metric provides critical insights into the market trends and industry metrics such as market size, growth rates, transaction volumes

To assess the industry's growth path, this study utilizes Ordinary Least Squares (OLS) regression and Exponential Smoothing as the forecasting methods, each chosen for their specific advantages in predicting distinct aspects of market trends The OLS regression is employed to predict the market size for the next 3-5 years Ordinary Least Squares (OLS) regression is well-suited for predicting market size over the next 3-5 years due to its ability

to identify long-term trends and quantify the impact of key factors influencing market expansion By leveraging historical data, OLS establishes a structured relationship between time and market size, allowing for reliable trend projection Additionally, OLS enables the inclusion of explanatory variables, such as policy changes, to assess their significance in shaping future market growth The statistical rigor of OLS, particularly with hypothesis testing at a 95% confidence level, ensures the robustness and validity of the forecasted estimates, making it an effective tool for long-term market size predictions Besides, the Exponential Smoothing method is used to forecast the growth rate of the market Exponential Smoothing is particularly useful for short-term forecasting as it assigns greater weight to recent observations, making it effective for capturing recent market fluctuations Additionally, Exponential Smoothing helps smooth out the impact of random variables, reducing noise in the data and improving the accuracy of growth rate projections

The period from 2015 onwards marked a significant acceleration in Vietnam's e- commerce sector (as shown in Figure 2.1), characterized by the entry and rapid expansion

of major platforms such as Shopee, Lazada, and Tiki These platforms introduced competitive dynamics and innovative business models, including mobile commerce and flash sales, which resonated with the tech-savvy Vietnamese population Their presence not only diversified the market but also heightened consumer trust in online transactions, contributing to the sector's robust growth (Hong Vinh, 2022)

The COVID-19 pandemic served as a strong catalyst for Vietnam’s e-commerce industry, significantly reshaping consumer behavior Social distancing measures and health concerns prompted a substantial shift from traditional retail to online shopping According

to the Vietnam E-commerce Association (VECOM), the e-commerce market experienced

a growth rate exceeding 20% in 2021, reaching a scale of over $16 billion This surge is attributed to the pandemic-induced necessity for online shopping, which has led to lasting changes in consumer habits and a more entrenched e-commerce culture in the country (The Anh, 2022) As Vietnam continues its digital transformation, its e-commerce industry remains one of the fastest-growing in Southeast Asia The combination of strong government support, increasing internet accessibility, and evolving consumer preferences positions the sector for sustained expansion

Annual gross merchandise value (GMV) of the internet economy in

Vietnam from 2015 to 2023, with a forecast for 2025 (in billion U.S dollars)

Source: Statista (2024a)

Figure 2.1 Annual GMV of the Internet economy in Vietnam (2015-2025) 2.1.2 Current Market Size and Structure

2.1.2.1 Market Size

Vietnam's e-commerce sector has experienced rapid expansion, driven by increased internet penetration, digital adoption, and a competitive marketplace As of 2024, Vietnam's e-commerce market is valued at approximately $22 billion, positioning it as the third-largest in Southeast Asia This represents an 18% increase from the previous year, with projections indicating a compound annual growth rate (CAGR) of 19%, potentially reaching $63 billion by 2030 (Vien Thong, 2024)

Figure 2.2 illustrates the annual revenue growth of Vietnam's B2C e-commerce market from 2018 to 2023 GDEA, 2023) The data indicates a consistent increase in revenue over the years, reaching $20.5 billion in 2023 Although the growth rate fluctuated,

it remained positive, reflecting the sector's expansion The Vietnam E-commerce and Digital Economy Agency (iDEA) highlights this trend in the Vietnam E-commerce White Paper 2023, emphasizing the steady development of the market

Table 2.1 provides key indicators of Vietnam’s e-commerce market size from 2018

to 2023 (DEA, 2023) It highlights the increasing number of online shoppers, rising average spending per consumer, and the growing contribution of B2C e-commerce to total retail sales Additionally, the data reflects the steady rise in internet penetration, which has played a crucial role in driving the market's expansion

Mmm Doanh thuB2C 4+ Tỷ lệ tăng trưởng

Doanh thu TMĐT B2C Việt Nam năm 2018 ~ 2023 (tỷ USD)°

Source: IDEA (2023)

Figure 2.2 Revenue e-commerce B2C in Vietnam 2018 - 2023

Table 2.1 Market size e-commerce in Vietnam 2018 - 2023

Ước tính giá trị mua sắm trực tuyến

Tỷ trọng doanh thu TMĐT B2C so với

thu dịch vụ tiêu dùng cả nước

Source: iDEA (2023)

The annual gross merchandise value (GMV) of the internet economy in Vietnam reached nearly $30 billion in 2023 and is projected to reach $43 billion by 2025 (Statista,

2024c) Within this, the e-commerce sector accounted for $16 billion in GMV in 2023,

making it the dominant segment of Vietnam’s digital economy (as shown in Figure 2.3)

Annual gross merchandise volume (GMV) of the internet economy in Vietnam in 2023, by sector (in billion U.S dollars)

2.1.2.2 Market Structure

Vietnam’s e-commerce market is highly concentrated, with Shopee maintaining its leadership position with over 60% GMYV market share throughout four quarters of 2024, followed by Lazada and Tiki (YouNet ECI, 2024) The market structure is characterized

by intense competition among major platforms, which leverage price promotions, fast logistics, and technological innovations to capture consumer attention

Price competition is a defining characteristic of the market, as leading platforms frequently launch flash sales and exclusive discounts to attract customers In addition to major players, the market is becoming increasingly fragmented, with small retailers and even local cooperatives entering the e-commerce space (Acclime Vietnam, 2022)

Source: YouNet ECI (2024)

Figure 2.4 E-commerce YoY Growth (%) by Revenue, Volume & Price According to the data demonstrated in Figure 2.5., in 2024, the most valued e- commerce category was Electronics, valued in 3,170 million US dollars, followed by

Fashion and Food, with 2,820 and 2,280 million US dollars respectively

Value in million U.S dollars

2023, the food category recorded an 18.6% increase in online spending (as depited in

Figure 2.6), reflecting the growing importance of essential goods in e-commerce (Statista, 2024a)

Growth of e-commerce expenditure on consumer goods among internet users in Vietnam in 2023, by category

ce spending grow categol

commerce sector being launched at the local level, reaching out a large, untapped customer base (Acclime Vietnam, 2022)

Vietnam’s e-commerce sector is powered by a young, tech-savvy population As of

2024, approximately 57 million Vietnamese shop online, with 43 percent of these consumers belonging to Gen Z These digital natives are pushing the boundaries of online shopping, with platforms like Shopee, Lazada, Tiki, and TikTok Shop leading the way (Hanh, 2024)

2.1.3 Key Players

The competition within Vietnam’s e-commerce market is intense, with several key players shaping the industry In 2024, Shopee secured its top position, followed by TikTok Shop, and Lazada Tiktok Shop has a unique approach, combining entertainment and shopping, which quickly attracted a large consumer base and reshaped consumer behavior Other platforms like Lazada and Tiki are facing stiffer competition, with their market shares shrinking in the face of TikTok’s rapid rise Figure 2.7 shows the market share of e- commerce platforms based on GMV in Vietnam in 2024 (YouNet ECT, 2024)

Source: YouNet ECI (2024)

Figure 2.7 Market share of e-commerce platforms based on gross merchandise

value in Vietnam in 2024

approximately 66.7% of the market share by gross merchandise value (GMV) in 2024 (YouNet ECI, 2024) Shopee’s success can be attributed to aggressive discounting and promotional campaigns, including frequent flash sales, discount vouchers, and free shipping policies, which reinforce customer loyalty Additionally, Shopee has capitalized

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on Vietnam’s high smartphone penetration by adopting a strong mobile-first strategy, ensuring a seamless app experience for its users

TikTok Shop, despite being a relatively new player, has rapidly expanded its footprint

in Vietnam, securing a 26.9% market share in 2024 Unlike traditional e-commerce platforms, TikTok integrates short-form videos with online shopping, allowing influencers and brands to drive sales through engaging content The platform’s Al-powered recommendation system personalizes the shopping experience, increasing conversion rates and enhancing customer engagement Another key driver of TikTok Shop’s success is the rise of live-streaming shopping, where sellers interact with potential buyers in real-time, fostering impulse purchases and brand loyalty

Lazada, owned by Alibaba, holds a 5.5% market share in 2024, positioning itself as

a strong competitor despite lagging behind Shopee and TikTok Shop Lazada’s key competitive advantages include its robust logistics infrastructure, which enables faster deliveries and reduces reliance on third-party couriers Moreover, Lazada attracts a more premium user base, offering a curated selection of high-end and imported products to cater

to middle-to-upper-class consumers

2.1.4 M&A activities

2.1.4.1 M&A deals in the industry

Tiki - Sendo merger

The merger between Tiki and Sendo in 2020 was an all-stock deal, combining Tiki’s urban-focused B2C platform with Sendo’s rural-oriented C2C marketplace This strategic move aimed to leverage both companies’ strengths while creating a stronger local competitor in Vietnam’s fast-growing e-commerce sector (Nhat Minh, 2020a)

The primary goal of the merger was to counter foreign dominance from Shopee and Lazada by forming Vietnam’s largest local e-commerce entity (Hanoitimes, 2020) By consolidating resources, expanding customer reach, and enhancing operational efficiency, Tiki and Sendo aimed to strengthen their competitive position and provide a viable alternative to international giants

The merger promised significant synergy opportunities, combining Tiki’s strengths

in electronics and logistics with Sendo’s extensive rural network and reach in lower-tier cities This complementary structure aimed to expand customer access, improve operational efficiency, and drive growth across urban and rural markets (Gutgutia, 2020) Despite its strategic advantages, the merger faced integration difficulties due to the companies’ differing business models and customer bases Tiki’s centralized B2C approach

contrasted with Sendo’s C2C marketplace model, leading to operational and branding complexities that made seamless unification challenging

Despite these efforts, the combined entity struggled to challenge Shopee’s market dominance and TikTok Shop’s rapid rise in social commerce, highlighting the difficulties local platforms face in competing with well-funded regional players

Alibaba - Lazada Acquisitions

In 2016, Alibaba Group acquired a controlling stake in Lazada by investing approximately $1 billion This investment comprised $500 million in newly issued equity and the purchase of shares from existing investors (Alibaba Group, 2016) In June 2017, Alibaba increased its ownership to 83% with an additional $1 billion investment By March

2018, Alibaba had invested a further $2 billion into Lazada, bringing its total investment

to $4 billion to date (Russell, 2018) These strategic investments have positioned Lazada

competitiveness against regional rivals such as Shopee

2.1.4.2 Impact of M&A on the market

Market consolidation and competitive balance

Although M&A efforts have reduced market fragmentation, they have also intensified capital wars, forcing smaller players like Leflair and Lotte.vn out of the market (Nhat Minh, 2020b) This shift has created an environment where only platforms with strong financial backing and technological investments can survive

Technological innovation & service upgrades

M&A activities in Vietnam’s e-commerce sector have accelerated technological advancements, driven by foreign capital and expertise Large international investments have reshaped the competitive landscape, compelling both global and local players to innovate continuously

Alibaba’s investment strengthened Lazada with AI, Big Data, and logistics upgrades, enabling personalized recommendations and faster delivery times Lazada integrated Alibaba’s cross-border logistics systems, significantly reducing delivery times for imported goods and improving the overall shopping experience This forced other competitors like Shopee to enhance their algorithms and logistics networks to retain market share

Platforms like Tiki faced intensified competition, stimulating investments in AI- driven customer support and warehouse automation However, Tiki struggled financially, leading to VNG’s exit in 2024 after losing $510 billion in investments (Markettimes, 2025)

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This emphasizes the growing pressure on smaller e-commerce platforms to keep up with rapid technological advancements Smaller players must prioritize tech upgrades or they can be left behind in an increasingly competitive market dominated by well-funded global giants

Increasing opportunities and challenges for local businesses

M&A presents both opportunities and challenges for Vietnamese startups and SMEs, providing capital access while intensifying competition Startups benefit from global funding, enabling market expansion and product diversification For instance, Tiki secured

$258 million in a funding round led by AIA Insurance (Vietnam News, 2022) Additionally,

niche markets offer growth potential, as seen in Cho Tốt and Sendo, which have attracted

acquisition interest due to their dominance in secondhand goods and rural commerce However, competition from global giants poses a significant challenge Shopee (SEA Group) and Lazada (Alibaba) hold a large market share, leveraging financial strength for deep discounts and technological advancements Financial sustainability is another concern,

as seen in Tiki’s $510 billion loss for VNG, prompting investors to prioritize profitability over aggressive expansion

2.2 Market Dynamics

2.2.1 Demand Drivers

2.2.1.1 Consumer behavior shifts

Strong growth in online spending:

Covid 19 has significantly transformed the shopping experience for consumers in Vietnam, with digital channels becoming the norm for accessing essential goods rather than the physical stores According to Kantar Worldpanel, in 2021 Vietnam experienced 65% more online shopping trips compared to the previous year They are spending more on e- commerce than ever before In 2024, they spent an average of VND874 billion (US$34.6 million) per day on five major platforms: Shopee, Lazada, TikTok Shop, Tiki, and Sendo E-commerce now accounts for 6.5% of Vietnam’s total retail sales, with actual online spending likely higher due to untracked transactions on social media and cross-border platforms (Vien Thong, 2025) Figure 2.8 shows the Vietnam’s online sales during the period from 2022 — 2024

Vietnam's online sales

data from Shopee, TikTok Shop, Lazada, Tiki, Sendo 400k

318 900 300k

232 100 200k

Source: (Vien Thong, 2024)

Figure 2.8 Vietnam’s online sales 2022 - 2024 Rising interest in livestream shopping and social commerce

Livestream shopping, which blends entertainment and e-commerce, has become a dominant trend 38% of Vietnamese consumers spend 1-3 hours per week watching livestreams, and 62% of them do so with the intention of making a purchase (Minh Anh, 2024) As demonstrated in Figure 2.9, platforms like Facebook Live, Shopee Live, and TikTok Shop are capitalizing on this shift, with Facebook reaching 62% penetration and TikTok at 53% in the third quarter of 2024, marking a significant increase from the previous quarter (Bao Ha Tinh, 2024)

Integration of Artificial Intelligence (AI) in E-commerce:

Artificial Intelligence (AI) has become a pivotal technological advancement driving the evolution of the e-commerce industry in Vietnam The integration of AI enhances various aspects of online shopping, leading to more personalized and efficient consumer experiences A recent report by Lazada, in collaboration with Kantar, reveals that approximately 92% of Vietnamese consumers utilize AI features on e-commerce platforms

at least once a week, surpassing the ASEAN regional average (Dang, 2025) This high adoption rate indicates a strong consumer inclination towards embracing technological innovations that enhance the shopping experience

Al-generated content and product recommendations significantly impact consumer behavior Around 88% of Southeast Asian consumers, including Vietnamese shoppers, make purchasing decisions based on Al-generated content and product suggestions (Hoang, 2024) AI also analyzes user behavior and preferences to offer tailored product recommendations, increasing the relevance of suggestions and improving the likelihood of purchase

The benefits offered by AI have led to a notable consumer trend: 83% of consumers are willing to spend more for shopping experiences that incorporate AI, recognizing the value added by these technologies (Ha, 2024) As AI continues to evolve, its role in shaping Vietnam’s e-commerce landscape will only expand, further optimizing customer experiences and driving industry growth

Growth of digital transaction solutions:

The rapid advancement of digital payment systems has significantly contributed to the expansion of e-commerce in Vietnam, making cashless transactions the norm and enhancing both convenience and security for online shoppers By the end of 2023, cashless payments in Vietnam reached approximately 11 billion transactions, representing a 50% increase compared to 2022, with the total transaction value exceeding VND 200 million billion The surge in internet and mobile banking transactions has played a major role in this growth, with nearly 2 billion internet-based transactions (VND 52 million billion, increase 56% in volume and 5.8% in value YoY) and 7 billion mobile banking transactions (VND 49 million billion, increase 61% in volume and increase 12% in value) (VECOM, 2024) Additionally, QR code payments alone accounted for 183 million transactions, reflecting their increasing role in seamless and instant transactions

The Buy Now, Pay Later (BNPL) market in Vietnam is experiencing rapid growth, emerging as a key driver of e-commerce adoption by offering consumers greater financial flexibility In 2024, the BNPL market in Vietnam is projected to grow 44%, reaching $1.91 billion, and is expected to expand to $2.61 billion by 2025, with a compound annual growth rate (CAGR) of 29.2% from 2024 to 2029 (Research And Markets, 2024)

As digital payments become the standard, businesses are optimizing checkout experiences to cater to a growing base of tech-savvy consumers, reinforcing Vietnam’s e- commerce growth The widespread adoption of digital transactions is a key technological advancement that continues to drive consumer demand in the e-commerce industry, making online shopping more efficient, secure, and accessible

2.2.1.3 Economic conditions

Post-COVID-19 economic recovery:

Vietnam’s economy has demonstrated remarkable resilience and recovery following the COVID-19 pandemic, positioning itself as one of the fastest-recovering markets globally In 2022, Vietnam’s GDP growth reached approximately 8.1%, exceeding expectations and marking a strong rebound after the pandemic-induced slowdown (World Bank, 2025) The Vietnamese government also reported that in 2022, the country met or exceeded 14 out of 15 key economic targets, marking the most successful year since the

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onset of the pandemic (Minh Phong, 2023) Looking ahead, Vietnam is expected to become the world’s 10th largest consumer market by 2030, surpassing Germany and the UK This projection underscores the increasing purchasing power of Vietnamese consumers, further driving demand in the e-commerce sector

Rising disposable income:

According to the General Statistics Office (GSO), the average monthly income per capita in Vietnam reached approximately 4.6 million VND in 2022, marking an 11.1% increase compared to 2021 Furthermore, forecasts suggest that Vietnam's per capita disposable income will continue to rise rapidly, projected to be around 4,500 USD per person per year by 2028 This upward trend in disposable income is expected to significantly boost consumer spending, particularly in the e-commerce sector (Khanh An, 2024)

Foreign Direct Investment (FDI):

Foreign Direct Investment (FDI) has been a pivotal factor in Vietnam's economic development According to GSO, Vietnam attracted approximately $38.23 billion USD in FDI in 2024, positioning itself among the top 15 developing countries for FDI inflows (Vietnam Law & Legal Forum, 2025) The influx of FDI into Vietnam is expected to accelerate the expansion of the e-commerce industry by enhancing digital infrastructure, fostering technological innovation, and increasing market competitiveness As global investors continue to recognize Vietnam’s potential as a digital economy hub, their investments will likely drive advancements in logistics, fintech, and Al-powered retail solutions, ultimately creating a more efficient and consumer-centric online marketplace 2.2.1.4 Demographic trends

Widespread mobile access:

Vietnam is experiencing significant growth in Internet and social media usage As of January 2024, 78.44 million people in Vietnam are Internet users, accounting for 79.1% of the population, driven by smart device adoption and improved network infrastructure Social media plays a crucial role, with 72.70 million users (73.3% of the population), shaping digital engagement and consumer behavior Additionally, there are 168.5 million mobile connections, exceeding 169.8% of the population, reflecting the widespread use of multiple mobile devices (We Are Social, 2024) Smartphones are the primary tool for e- commerce, accounting for nearly 57% of online purchases (Interesse, 2024) With the increasing accessibility of the internet and mobile devices, more and more people will have the opportunity to connect with and use e-commerce services on a daily basis

Rising middle class and urbanization:

Over the past three decades since the Doi Moi reforms, Vietnam has made remarkable progress, elevating the country’s economic development and transitioning it into a middle- income nation The middle-class population is expanding rapidly and is projected to reach

21 million by 2030, according to World Data Lab The majority of this demographic is concentrated in Hanoi and Ho Chi Minh City, with growing middle-class communities also emerging in Danang, Can Tho, and Hai Phong (Delteil et al., 2021)

A McKinsey study highlights that Vietnamese consumers spend at least $11 per day, and Vietnam is expected to be one of the fastest-growing middle-income population (Phien

An, 2021) The rapid rise of the middle class, along with an increasingly dynamic consumer base, serves as a crucial driver of shifting consumption patterns in e-commerce and retail Rising young and tech-savvy consumers:

Vietnam’s young digital-native consumers, including Millennials and Generation Z (bom between 1980 and 2012), are expected to drive 40% of the country’s total consumption by 2030 (Interesse, 2024) These generations are highly engaged with mobile and online shopping, making them a core consumer base for e-commerce platforms Vietnam’s youthful demographic structure plays a crucial role in digital adoption According to GSO, as of 2019, the country had approximately 20.4 million individuals aged 10-24, accounting for 21% of the total population, a figure that continues to sustain Vietnam’s "golden population structure” until at least 2039

2.2.2 Supply Drivers

2.2.2.1 Availability of raw materials

The availability of raw materials for Vietnam’s e-commerce industry is influenced

by both domestic production and international trade The country benefits from a diverse supply chain covering key product categories such as fashion, cosmetics, fast-moving consumer goods (FMCG), home appliances, and agricultural products Major corporations

such as Unilever, P&G, and Masan have expanded their e-commerce distribution channels,

strengthening the availability of FMCG products

Vietnam’s participation in free trade agreements (FTAs), such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), has further facilitated the import of raw materials and finished goods Lower trade barriers and reduced tariffs have enabled businesses to source raw materials more efficiently, supporting the growth of the e- commerce sector (VOV World, 2025)

2.2.2.2 Labor market conditions

The e-commerce industry in Vietnam is growing rapidly, driving a high demand for skilled labor However, the labor market is currently facing significant challenges in meeting this demand (Dinh Truong, 2022) VECOM (2024) emphasised that the role of human resources is increasingly being recognized as a key factor in the sustainable development of e-commerce Although many universities have started offering e- commerce programs, the supply of human resources still falls short of the market's practical demands According to a survey by the E-commerce and Digital Economy Agency (Ministry of Industry and Trade), only 30% of the workforce in e-commerce solution providers have received formal training in this field, while the remaining 70% are recruited

from other sectors such as commerce, business administration, information technology,

and related fields

2.2.3 Pricing Trends

2.2.3.1 Logistics and Fulfillment Cost Volatility

The volatility of logistics and fulfillment costs remains a crucial factor influencing pricing strategies in the e-commerce industry In particular, last-mile delivery costs continue to rise due to increasing order volumes and growing consumer expectations for faster and higher-quality delivery services

According to VECOM (2024), Vietnamese e-commerce businesses are facing mounting operational cost pressures, particularly in optimizing delivery processes and supply chain management In response, platforms are adopting strategies such as partnering with third-party logistics (3PL) providers or investing in automated warehousing solutions These measures aim to mitigate cost fluctuations while ensuring efficient order fulfillment 2.2.3.2 Competitive Pricing Strategies and the Rise of BNPL

Price competition among leading e-commerce platforms—Shopee, TikTok Shop, Lazada, and Tiki—has intensified, driving aggressive discounting strategies, especially during major sales events like 9.9, 11.11, and 12.12 While these tactics attract a high volume of consumers, they also exert significant pressure on sellers’ profit margins (YouNet ECI, 2025) To counteract these challenges, e-commerce platforms are

increasingly leveraging artificial intelligence (AI) to implement dynamic pricing models

By adjusting prices in real time based on consumer behavior, purchase history, demand fluctuations, and geographical factors, these platforms aim to optimize revenue while maintaining customer engagement Consequently, consumers often encounter price variations depending on their browsing history, location, and personalized promotional offers

At the same time, the growing adoption of Buy Now, Pay Later (BNPL) services has further shaped pricing strategies By allowing consumers to purchase high-value products with installment-based payments, BNPL reduces immediate financial constraints and makes premium goods more accessible As a result, sellers may integrate financing costs into pricing structures, subtly shifting their pricing models to accommodate this payment trend (YouNet ECI, 2025)

2.2.3.3 Rising Costs of Digital Advertising

Rising digital advertising costs on platforms such as Facebook, Google, and TikTok have placed additional financial burdens on sellers, prompting them to reassess their pricing strategies to maintain profitability (YouNet ECI, 2025) To maximize return on investment (ROT), businesses are reallocating marketing budgets and focusing on data- driven advertising strategies that optimize ad placements and conversion rates

2.2.3.4 Personalized and Dynamic Pricing

In the e-commerce industry, AI-powered dynamic pricing has become a pivotal trend, enabling retailers to adjust product prices in real-time based on factors such as market demand, competitor pricing, and individual consumer behavior This approach enhances competitiveness and maximizes profitability For instance, AI algorithms analyze vast datasets to determine optimal pricing strategies, allowing businesses to respond swiftly to market fluctuations and consumer preferences This results in personalized pricing, where consumers might encounter different prices based on their browsing history, purchase patterns, or engagement with promotional campaigns

2.2.4 Regulatory Environment

Vietnam’s e-commerce sector operates within a progressively structured legal framework that aims to ensure transaction security, consumer protection, digital integrity, and international integration The regulatory environment is shaped by a combination of national development strategies, revised legal instruments, and emerging policy directions The National E-commerce Development Strategy for 2021-2025, approved by the Vietnamese government, outlines key priorities for the digital economy, including expanding e-commerce in both public and private sectors, narrowing the digital divide,

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encouraging cross-border trade, and building a resilient digital marketplace (Acclime, 2022)

Several core legal instruments form the backbone of the regulatory framework:

- The Law on Electronic Transactions and the Law on Consumer Protection, along with Decree No 52/2013/ND-CP, govern digital contracts, payment systems, and consumer rights enforcement (VECOM, 2024)

- The Revised Law on Protection of Consumer Rights 2023 of Vietnam, effective as

of 2024, enforces stricter obligations on digital platforms and online sellers It mandates transparency in product listings, content moderation, and clear disclosure of platform policies to enhance consumer trust ((DEA, 2023)

- The Revised Law on Electronic Transactions (2023) defines requirements for trusted services such as digital signature authentication and timestamping, and mandates minimum cybersecurity standards for service providers (DEA, 2023)

- Decree No 91/2022/ND-CP and Directive No 18/CT-TTg obligate e-commerce platforms to report seller data to tax authorities and enhance inter-agency data sharing to support taxation and national digital identity systems (iDEA, 2023)

- Decree No 13/2023/ND-CP on Personal Data Protection introduces detailed classifications of personal and sensitive data, reinforces user consent rights, and defines the responsibilities of data controllers and processors, especially in cross-border data flows (iDEA, 2023)

In addition to legal compliance, Vietnam’s regulatory direction increasingly emphasizes sustainability and ethical standards While not yet governed by a dedicated environmental e-commerce law, authorities have begun encouraging green logistics, responsible consumption models, and transparency in digital advertising These policy shifts reflect an alignment with broader goals under the Law on Environmental Protection (2020) and are reinforced through strategic guidance in national white papers (iDEA, 2023; VECOM, 2024)

Finally, Vietnam’s participation in global trade agreements such as the EU—Vietnam Free Trade Agreement (EVFTA) and the Regional Comprehensive Economic Partnership (RCEP) further harmonizes its digital trade practices with international norms, creating a conducive environment for cross-border e-commerce expansion

2.3 Industry Trends and Challenges

2.3.1 Current Trends

2.3.1.1 The rise of cashless payments

Digital payment systems have become an integral part of Vietnam’s e-commerce landscape, evolving from a convenience to an industry standard The COVID-19 pandemic significantly accelerated this shift, as lockdowns and social distancing measures pushed consumers toward online shopping (JDI Group, n.d.) Even as restrictions eased, the adoption of cashless payments continued to surge, solidifying its role in e-commerce transactions

In January 2024, non-cash transactions increased by 63.3% in volume compared to the previous year, while internet-based transactions grew by 32.43% in value QR code payments, in particular, witnessed a remarkable expansion, with transaction volumes surging by 892.95% and values increasing by over 1,062% (JDI Group, n.d.) The rapid adoption of these payment methods reflects a broader shift in consumer behavior, as digital wallets, QR codes, and Buy Now, Pay Later (BNPL) services become preferred payment options

As Vietnam’s digital economy matures, businesses are continuously optimizing their checkout experiences to align with evolving payment trends The widespread acceptance

of digital transactions is not only enhancing convenience and security for consumers but also reinforcing Vietnam’s position as one of the fastest-growing e-commerce markets in Southeast Asia

Top 5 SEA Countries in Cashless Momentum

88%

= 81%

Stein 64%

Vietnam Philippines Thailand Singapore indonesia

: 58% #1 popular RoigDAM NGEECS GUƠ Tame tia

Figure 2.10 2023 Vietnam Consumer’s Payment Attitudes

2.3.1.2 Cross-border e-commerce

Cross-border e-commerce in Vietnam, especially online exports, has gained significant popularity, although B2B transactions faced challenges after the COVID-19 pandemic In contrast, B2C online export transactions have seen strong growth According

to Access Partnership's 2022 report, online exports from Vietnam to consumers reached

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$3.5 billion in 2022, with projections suggesting it could reach $5.5 billion by 2027 (Huy, 2024) However, if businesses and stakeholders fully implement export strategies, the figure could soar to $13 billion by 2027 Vietnamese businesses selling on Amazon have seen substantial success, with sales increasing by 50% and the number of sellers growing

by 40% To support this growth, the E-Commerce Association has organized initiatives like workshops and established the Online Export Support Alliance (VESA) to help small and medium-sized enterprises engage in cross-border trade Additionally, in 2023, USAID and the Ministry of Industry and Trade launched the Vietnam Digital Trade Project, aiming

to foster digital trade, support SMEs, and enhance cross-border e-commerce with a focus

on new business models and traceability (WECOM, 2024)

2.3.1.3 Al and personalization

According to Vietnam News (2024), several emerging technologies are shaping the future of e-commerce in Vietnam, including the integration of augmented reality (AR) and virtual reality (VR), increased personalization and customer engagement, improved customer service through AI assistants, and the growing reliance on data analytics and insights

Among these, voice commerce is becoming a leading trend, driven by the widespread adoption of smart speakers and voice assistants More consumers are turning to voice commands to shop, order groceries, and search for products online, making voice commerce a critical area of innovation for e-commerce platforms

Additionally, AR and VR are transforming the online shopping experience by enabling immersive product visualization These technologies allow consumers to interact with products in a more realistic way before purchasing, particularly in industries like

fashion, furniture, and cosmetics As digital infrastructure continues to improve, AR/VR

adoption is expected to increase, further revolutionizing e-commerce engagement 2.3.2 Challenges and Risks

2.3.2.1 Competitive Threat

The growing competition in Vietnam's e-commerce industry is being fueled by the rise of new platforms and businesses like TikTok Shop, Lotte Mart intensifying the battle for market share and leading to what has been described as a “money-buming” race

Chinese e-commerce giants such as Alibaba, JD.com, and Pinduoduo dominate

global markets with vast product selections, efficient logistics, and competitive pricing, making them tough rivals for Vietnamese platforms Despite rapid growth, Vietnamese e- commerce sector is still developing, thus struggling to match China's scale, pricing power,