The Vietnamese e-commerce market is projected to grow to almost VND400 trillion (US$17.3 billion) in 2023, propelled by rising Internet and smartphone penetration coupled with a large young population, according to a new forecast from GlobalData.
The data and analytics company in a new report, “Vietnam Cards & Payments: Opportunities and Risks to 2023,” projects the Vietnamese e-commerce market to grow at a compound annual growth rate of 16.3% from VND218.3 trillion in 2019 to VND399.5 trillion in 2023.
The company in a release March 6 said the country’s e-commerce market has doubled during the past five years with total online spending increasing from VND90.1 trillion in 2015 to VND218.3 trillion in 2019.
“While the traditional payment instruments such as cash, cards and bank transfers are widely used for e-commerce purchases, consumer preference for alternative payments is on the rise. There is a growing demand for faster and convenient payment means, especially among tech-savvy millennials,” said Nikhil Reddy, banking and payments analyst at GlobalData.
According to the analytics firm’s 2019 banking and payments survey, cash is still the most preferred payment mode for e-commerce purchases in Vietnam, accounting for 35.6% in 2019. Alternative payment solutions are gradually gaining ground and accounted for 15.5% share. MoMo is the most preferred alternative payment solution in Vietnam, followed by PayPal.
Strong growth has prompted global companies to invest in Vietnamese e-commerce companies, it added. In 2018, e-commerce company Tiki received $5.3 million and $44.0 million funding from VNG Corporation and Chinese investor JD.com, respectively.
In the same year, another company, Sendo, secured $51 million from SBI Group (a Japan-based financial services company) and other investors. Furthermore, Chinese e-commerce giant Alibaba invested an additional $2 billion in Lazada, one of the leading e-commerce companies in the country.
Improving payments infrastructure, coupled with rising consumer confidence in online shopping and the availability of convenient payment solutions, is expected to further drive e-commerce growth in Vietnam, the release said.
Image courtesy of GlobalData
