Sadie Keljikian, Stern Corporate Services Group
Ecommerce is on the rise in Vietnam. Several countries across Southeast Asia (including Malaysia and Thailand) are demonstrating significant ecommerce activity. In Vietnam specifically, several large-scale factors are contributing to the dramatic uptick in online purchasing:
Large and increasing youth population.
World Bank reports that Vietnam’s population, 92.7 million people, includes 57%, or over 52 million people under the age of 35. This means more than half the population is both remarkably tech savvy and reaching prime spending years.
Growing economy, rising middle class.
The Vietnamese economy is on the rise in general, with a consistent annual increase in its overall GDP. Projections suggest that middle class-earners will more than quintuple in number between 2012 and 2020 and consume more than six times recorded amounts in the same period.
Strong and growing online market.
Vietnam has a thriving ecommerce audience already, with over 53% of the population, about 50 million people, already purchasing goods online. That number has been consistently and rapidly growing since 2005, when only 10.7 million people used the internet at all in Vietnam. Nielson has also reported that internet users in Vietnam spend approximately 24.7 hours a week online, which is remarkably high for the region. The same report also revealed that online shoppers spent $160 each in 2015, which was a 22% increase from 2014.
Abundant free trade, growing logistics industry.
As of last year, Vietnam was involved in 16 free trade agreements, although several were not finalized. Vietnamese consumers prefer foreign-made products because they have a reputation of better quality than those made in Vietnam. The domestic logistics industry in Vietnam is growing dramatically, particularly since Vietnamese people generally prefer to pay on delivery. This means that Vietnamese logistics companies are preparing to deliver goods and accept payment in one trip. While coordination can be complex, logistics providers are building strong technological and organizational foundations in Vietnam.
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