Vietnam's e-commerce platforms poised for strong growth in 2024

Vietnam's largest e-commerce platforms are expected to continue their strong growth in 2024, with revenue and sales volume exceeding VND310 trillion (US$12.5 billion), a 35% increase from 2023.

The latest report on the online retail market in 2023, conducted by the market data platform Metric, has identified Vietnam as the fastest-growing country for online shopping in Southeast Asia.

Metric analyzed data from five e-commerce platforms: Shopee, Lazada, Tiki, Sendo, and TikTok Shop.

Impressive revenue growth

Consumers still prefer to shop on online retail platforms for low- to mid-priced products ranging from VND10,000 (US$0.40) to VND350,000 (US$15). Photo: VNA

Last year, the five platforms achieved a remarkable e-commerce growth of 52.3%, successfully delivering approximately 2.2 billion products.

Sales experienced a significant surge in the last two quarters, with the highest growth of nearly 90% observed in September. This month also recorded the highest sales across all five platforms, amounting to VND21.1 trillion ($853.8 million).

In 2023, the total revenue from business-to-consumer (B2C) transactions on registered e-commerce platforms in Vietnam reached VND498.9 quadrillion ($20.1 billion).

Among these, the revenue of the top five e-commerce platforms in Vietnam—Shopee, Lazada, Tiki, Sendo, and TikTok Shop—reached VND233.2 trillion ($9.4 billion), reflecting a 53.4% increase compared to 2022.

The market share of the top five platforms increased from 31.4% in 2021 to 46.5% in 2023 in terms of total market revenue, according to the report.

Metrics pointed out that shopping demand is evenly spread throughout the year. Consumers still prefer shopping on online retail platforms for low- to mid-priced products, ranging from VND10,000 ($0.4) to VND350,000 ($14.5). Sales volume in these price segments accounted for the highest market share last year.

The report highlighted that the beauty, home and lifestyle, and women's fashion sectors continue to lead in revenue and sales volume. However, the sports and travel sector boasted the highest sales growth rate at 92.1%.

This commercial channel is also witnessing a significant shift of home appliances, phones, and tablets from physical stores to online platforms. In 2023, emerging shopping methods such as livestreaming and omnichannel selling experienced substantial growth, generating significant revenue for sellers.

Despite the impressive growth, the market has witnessed intense competition. Last year, more than 100,000 vendors exited platforms like Shopee, Lazada, Tiki, and Sendo. However, TikTok Shop welcomed over 95,000 new sellers.

Currently, e-commerce platforms are in a race to launch promotions and capitalize on year-end consumer spending to boost sales and expand their market share.

Local insiders have predicted that e-commerce will continue to experience robust growth in 2024, driven by digitization trends. The top-selling sectors predicted on the platforms include health and beauty products, apparel, home appliances, and household utilities.

The Ministry of Finance recently forecasted that the e-commerce sector will reach a scale of $39 billion by 2025, underlining that Vietnam is recognized as one of the top 10 countries with the highest growth rates in e-commerce worldwide, leading in Southeast Asia.

The size of Vietnam's retail e-commerce market in 2023 was expected to reach $20.5 billion, maintaining growth of about $4 billion, equivalent to 25% compared to 2022.

Hanoi leads in e-commerce market share

A Hanoian makes a transaction in online shopping. Photo: PVcombank

Based on data from five e-commerce platforms, the report highlighted Hanoi's top position in revenue and sales volume in 2023. The city's revenue reached VND76 trillion ($3.1 billion), accounting for a 33% market share and a 44% increase year-on-year.

Hanoi actively promotes online consumer activities, aiming for 53% of its population to shop online. In 2024, the city aims for B2C e-commerce sales to account for 13% of its total retail sales of goods and consumer services.

The percentage of e-commerce sites with online ordering functionality reaches 79%. The share of small and medium-sized enterprises engaged in e-commerce activities through e-commerce platforms, including social media, will reach 49%, while the share of enterprises engaged in e-commerce activities through mobile applications will hit 39%.

The city also aims for 48% of e-commerce payments to be cashless and 69% of online transactions to be e-invoiced. Hanoi authorities aim to maintain a ranking of 2nd or higher nationwide in the annual e-Business Index (EBI).