Vietnam’s e-commerce sector has emerged as a formidable force in Southeast Asia, demonstrating remarkable growth and attracting significant attention from both domestic and international players.

Rapid Growth and Market Position

In the first half of 2024, Vietnamese consumers spent approximately 143.9 trillion Vietnamese dong (US$5.68 billion) on e-commerce platforms, marking a 54.91% increase in value and a 65.55% rise in the number of items purchased compared to the same period in the previous year. This surge propelled Vietnam to become the third-largest e-commerce market in Southeast Asia, surpassing the Philippines. The top eight e-commerce platforms in the region achieved a Gross Merchandise Value (GMV) of US$114.6 billion in 2023, with Vietnam’s GMV growing by 52.9%, the highest growth rate globally.

Dominant Platforms and Consumer Trends

Shopee continues to dominate the Vietnamese e-commerce market, accounting for 67.9% of the market share by GMV. TikTok Shop, despite being a relatively new entrant, has quickly gained ground, capturing a significant portion of the market. Other platforms like Lazada and Tiki are facing increased competition. The rise of social commerce, particularly on platforms like TikTok, is reshaping the e-commerce landscape, with TikTok Shop capturing 23.2% of Vietnam’s e-commerce market share in 2024.

Challenges and Regulatory Measures

Despite the impressive growth, the sector faces challenges, including intense competition and regulatory hurdles. The entry of new platforms and the intense competition among existing players have led to a “money-burning” race in the market. Vietnam’s government has expressed concerns over the impact of deep discounting by platforms like Shein and Temu, which could harm local businesses. Authorities have mandated that these platforms register with the government by the end of November 2024 or face potential blocking of their internet domains and apps

Future Outlook

Looking ahead, Vietnam’s e-commerce sector is poised for continued growth, driven by a young, tech-savvy population and increasing internet penetration. The government’s focus on developing domestic markets and implementing stringent regulations aims to create a more balanced and sustainable e-commerce environment. As the sector matures, it is expected to play a pivotal role in Vietnam’s economic development, offering significant opportunities for businesses and investors.