Vietnam E-commerce Market Chasing 35 Billion USD Valuation by 2025

On May 15, 2020, Vietnam Deputy Prime Minister signed the Decision No.645, approving Vietnam’s E-commerce Development Master Plan for the 2021 – 2025 period ^[1]. The Master Plan aims to support and promote the widespread use of e-commerce among enterprises and society.

1. Specific Goals (achieved by 2025)

• E-commerce market size

1) 55% of the population participates in online shopping, and the purchase value of goods and online services averaged 600 USD per person per year.

2) B2C e-commerce sales (online shopping for both goods and services) increase 25% annually, reaching 35 billion USD, accounting for 10% of the total retail sales of consumer goods and services nationwide.

• The infrastructure of ancillary services for e-commerce

1) Non-cash payment in e-commerce reaches 50%, in which payments are made through intermediary service provider’s payment account for 80%.

2) The average cost for delivery and final order completion accounting for 10% of the product cost in e-commerce.

• Correlation of e-commerce development among economic regions

For now, 70% of the e-commerce in Vietnam was happening in Hanoi and Ho Chi Minh City and 30% in other localities. Such wide gaps will not only hinder the healthy growth of e-commerce but also threaten the long-term sustainable development of the whole economy.

Vietnam's government is striving to balance the proportions. The goal is economic zones and localities aside from Hanoi, and Ho Chi Minh City accounting for 50% of the value of B2C e-commerce transactions.

• E-commerce applications in enterprises

80% of e-commerce websites equipped with online booking functions and 50% of small and medium enterprises operating e-commerce platforms, including those on social media sites.

2.  Measures

1) Improve mechanisms and policies to meet development needs

Reviewing, supplementing, amending, and issuing new policies and legal documents in the direction of facilitating, encouraging, and supporting e-commerce application activities and new business models based on digital technology.

2) Improve the management and organization of e-commerce activities, fight against commercial fraud, infringement of intellectual property rights and unfair competition in e-commerce.

3) Build markets and improve consumer confidence in e-commerce

Organize annual e-commerce events to stimulate market demand and expand CBEC activities, create an environment for organizations and enterprises to demonstrate new technologies and the most advanced e-commerce models for consumers to experience, build new e-commerce habits and skills.

4) Construction of infrastructure and support services for e-commerce

Develop mobile payment tools, electronic wallets, improve goods delivery and logistics infrastructure, apply new technologies and execute trials of new transportation tools, establish online management systems for transportation and goods delivery services.