Revenue at top 5 e-commerce platforms in Vietnam up 53.4% in 2023

A comprehensive report on Vietnam’s online retail market in 2023 and forecasts for 2024 from Metric indicates that revenue in the top 5 e-commerce platforms in the country - Shopee, Lazada, Tiki, TikTok Shop, and Sendo - reached VND232.13 trillion ($9.52 billion), marking a 53.4 per cent increase compared to 2022.

The report also forecasts a continuation of revenue and sales volume growth in the top 5 platforms, potentially reaching over VND310 trillion ($12.72 billion) in 2024, up 35 per cent compared to 2023.

According to the report, Vietnam posts the highest growth in online shopping in Southeast Asia. Cross-border trade will be an inevitable trend in the market, especially with increasing attention given to genuine products from China and South Korea on online retail platforms. Platforms are also implementing many demand-stimulating policies, such as “Buy now, Pay later” schemes.

Livestreaming and multi-channel selling will continue to be focal points for driving up revenue in 2024. Product bundles are becoming a preferred trend among consumers due to affordable prices, helping them save money.

2024 is forecast to be another explosive year for the e-commerce market. However, this does not necessarily mean growth opportunities for all businesses. While any business transitioning to online platforms could easily generate a profit in the 2016-2018 period, in recent years, as online shopping platforms adjust their rules and consumers become more sophisticated, only those with clear, strategic plans survive.

The Metric report also highlights several prominent trends for Vietnam in 2024 to enhance competitiveness and attract target customers in the digital environment.

Direct-to-consumer (DTC) will continue to become more prevalent. Instead of using distributors, businesses now sell directly to consumers on e-commerce platforms. This allows them to control the entire process, from production and marketing to sales. Moreover, intermediary costs are greatly reduced, leading to higher profit margins.

For instance, if adopting the B2B2C (Business to Business to Customer) model, businesses would have to allocate 35-40 per cent of the product price to distributors. When selling directly on e-commerce platforms, they would incur much lower fees, of less than 10 per cent, and the amount left over can be directly deducted from the sales price or invested in product features.

However, businesses applying this model need to understand the platform’s operations, thoroughly research the market approach, and develop reasonable sales policies to balance relationships with distributors.

Expanding business markets to e-commerce platforms will see a continued fierce price war in 2024. AI, machine learning, and big data analysis will continue to rise. These technologies are fundamentally changing how sales operate and how users shop by creating more refined, accurate, and secure experiences.

Users nowadays can see product advertisements, receive promotional updates, and get personalized product recommendations in an instant based on search history, interaction history, browsing, and purchasing history. While AI and machine learning are mainly applied by online shopping platforms or e-commerce websites with large investments, big data is being rapidly deployed more widely.

Not only do e-commerce platforms with available internal data benefit, but businesses selling on platforms can also apply this technology through neutral third-party software providers. This excellent tool helps brands increase revenue and market share based on authentic analytical data, especially in challenging market periods.

Business managers will gain a better understanding of consumer desires and market trends, thereby creating opportunities for secure business steps, minimizing risks, and making faster decisions than competitors. Big data also helps optimize transportation - logistics, supply chain management, R&D, and business operations on platforms.