E-commerce race heats up with new player entering arena

Experts said the Vietnamese e-commerce market has experienced robust growth with new shopping trends on the horizon.

Industry experts note that Vietnam's e-commerce market has been experiencing robust growth and anticipates new shopping trends on the horizon, anticipating a fierce competition in the sector with continuous launch of promotional campaigns.

According to a report from the Ministry of Industry and Trade, the business-to-consumer e-commerce growth reached 18-20%, meeting the Government’s target. The market will top US$25 billion in value in 2025 on the back of the increase in tax revenue from organisations and household businesses.

Currently, there are 116 foreign service providers having registered, declared and paid over VND19.7 trillion (US$773.6 million) in taxes through the e-portal designed for foreign suppliers. Recent data showed direct tax collections through the portal reached more than VND8.68 trillion in 2024, up 26% year-on-year, with major platforms like Google, Meta, Microsoft, TikTok, Netflix and Apple among the contributors.

Besides, organisations and inviduals with e-commerce activities contributed some VND108 trillion to the state budget in January - November, a year-on-year increase of 22%.

TikTok representative in Vietnam Nguyen Lam Thanh, who is also Vice Chairman of the Vietnam Digital Communications Association, analysed that e-commerce is part of the retail sales’ digital transformation, noting some traditional shopping streets and markets, especially those trading fashion items, are experiencing a reduction in customer footfall.

Even well-established fashion brands will face significant challenges if they fail to embrace technology and e-commerce, he said, the trend of combining shopping with entertainment has been prominent in 2024, requirement businesses to jump into the bandwagon or risk losing their market relevance.

Removing bottlenecks for e-commerce development

As a strong tool that could help enterprises develop and reach out to the world, the e-commerce sector has faced challenges, particularly micro, small and medium enterprises with limited digital knowledge and skills, competitive capabilities, market information, and legal barriers related to taxes, logistics and payment.

Deputy Director General of KIDO Group and CEO of E2E E-commerce Tran Quoc Bao pointed out three major challenges for Vietnamese firms when participating in the e-commerce market, namely technology adaptation, persistence in digital transformation, and stronger branding.

In the same vein, other insiders laid stress on the significance of investing in human resources to catch up with the e-commerce development trend.

Most recently, Prime Minister Pham Minh Chinh signed an official dispatch, ordering competent ministries and localities to step up state management over e-commerce activities.

Over the past time, the Ministry of Industry and Trade has worked to build e-commerce infrastructure, creating motives for digital economic development and shaping up new development space. Additionally, it has operated the Vietnam electronic contract development axis and the KeyPay online payment platform to back national e-commerce payment system.

Amidst deep international integration and fierce competition, the ministry is completing legal framework to protect consumers in the online marketplace while enhancing communications work to raise public awareness of trade fraud and counterfeit goods.