Vietnam’s revenue and sales volume on online retail platforms continue to rise sharply, potentially reaching more than VND 310,000 trillion, an increase of 35 per cent. This is according to the E-commerce Data Platform (Metric), which projects that by 2024, global e-commerce sales will reach US$6,300 billion, an increase of 9.4 per cent.
What prospects does the e-commerce sector have in 2024?
Important milestones speak of great potential
25 per cent annual growth rate, emerging as a significant distribution channel. Data from Vietnam’s Ministry of Industry and Trade indicate that, despite numerous challenges and indications of a slowing global economy, the country’s consumer market will continue to grow positively. Some of the world’s largest economies, like those in Europe, are seeing modest growth in retail sales.
As a result, it is predicted that the entire import-export turnover in 2023 will be US$683 billion, of which 354.5 billion will come from exports and 328.5 billion from imports. For the eighth year running, the trade balance has shown a surplus; by 2022, the surplus is expected to have nearly tripled to approximately US$30 billion. The exchange rate, macroeconomic indices, and foreign exchange reserves have all stabilised as a result of this outcome.
Notably, e-commerce activities are developing into a significant avenue for distribution, supporting the growth of supply chains and domestic and international circulation, thereby facilitating the efficient consumption of large quantities of agricultural and food products by farmers and businesses, particularly during harvest season.
E-commerce applications have led to breakthrough growth for many organisations, particularly small and medium-sized enterprises, and an increase in cross-border retail sales of items. E-commerce has proven to be one of the digital economy’s trailblazing industries, driving corporate digital transformation and providing inspiration for economic growth.
The rate at which e-commerce has grown over time appears to be a reflection of shifting consumer preferences, as well as an increase in customers’ access to and use of information technology.
Simultaneously, the composition of Vietnam’s export commodities is improving and becoming less composed of raw materials and more composed of industrial and processed items. Hence, the framework for Vietnamese commodities is established to engage more fully in the global supply chain and manufacturing.
Cross-border shopping: Fulfill the purchasing fever of 2024
All economists agree that cross-border e-commerce will inevitably become a market trend. With the internet’s ongoing expansion, geographical obstacles to international trade, commerce, and purchasing are increasingly disappearing.
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Vietnam’s e-commerce rose by 25 per cent and is now among the best in the world, according to the Department of E-Commerce and Digital Economy (Ministry of Industry and Trade). Cross-border e-commerce is expected to grow at such a quick rate that it will take off in the upcoming years.
Metric reports that authentic Chinese and Korean stores are drawing more and more attention on Vietnamese e-commerce platforms. The largest obstacle to the growth of Vietnam’s e-commerce is the lack of effective measures to combat the issues of phoney, counterfeit, and subpar products.
Since e-commerce trading platforms set up marketplaces for buying and selling but decline to guarantee the calibre of products and services, the pervasive problem of phoney, counterfeit, and subpar items has a direct impact on the economy.
Reputation of legitimate business brands specifically and the e-commerce sector as a whole in general. The expansion of e-commerce will still face numerous challenges if platforms still do not require sellers to reveal information and delivery businesses are not held accountable for the origin of items.
Powerful assistant calls name of AI
Through the creation of increasingly complex, precise, and safe experiences, artificial intelligence (AI), machine learning, and big data analysis have drastically altered how sales operations and user shopping are conducted.
Big data is being quickly implemented on a larger scale, even if online shopping platforms and e-commerce websites with substantial financial resources are now the primary users of AI and machine learning. Businesses that sell on e-commerce platforms have the opportunity to utilise this technology through independent third-party software providers, in addition to e-commerce platforms with accessible internal data sources.
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This technology, which is particularly useful during challenging market times, assists brands in growing their revenue and market share by using real analytics. Big data also aids in the optimisation of floor business operations, supply chain management, R&D, and logistics related to transportation.
Sustainable consumption continues into 2024
Electronic commerce is not excluded from the trend of responsible consumption. Customers who value using items from firms that exhibit social and environmental responsibility over those with low pricing or substantial discounts are empathetic and conscientious.
Customers are even prepared to pay extra for companies that fulfil this obligation well. Conversely, consumers will typically decline to utilise the product if the company engages in unethical management practices or engages in detrimental environmental actions.
Businesses can concentrate on several criteria in 2024, such as producing more ecologically friendly goods, utilising sustainable packaging materials, and obtaining goods from reliable vendors.
2024: A year filled with many explosions
Forecasts indicate that Vietnam’s e-commerce industry will only grow in the future, and Hanoi and Ho Chi Minh City will likely remain highly competitive markets.
Based on data gathered from five floors of warehouses, including Shopee, Lazada, Tiki, TikTok, and Sendo, Hanoi’s e-commerce revenue of VND 76,600 billion accounted for 48 per cent of the market share, while Ho Chi Minh City came in second with 32 per cent; when it comes to market share based on sales volume, Hanoi continues to lead with 44 per cent, while Ho Chi Minh City comes in second with 30 per cent.
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This article was first published on March 20, 2024
The post Multifaceted effects on Vietnam’s e-commerce: A near-term potential to break through in the Asian market appeared first on e27.