Vietnam’s E-commerce has huge room for growth in rural areas
While e-commerce is vital to Vietnam’s development, 80 per cent of the population has not accessed online trading yet, leaving huge room for growth.
At a forum on market strategies for Vietnamese businesses held by the Institute for Brand and Competitiveness Strategy (BCSI) in Hanoi City yesterday, Hoang Quoc Quyen, representative of Tiki in the north, said: “85 per cent of the e-commerce serves the urban market mostly in Hanoi and HCM City, which accounts for 20 per cent of the population, the rest of the 80 million rural people are not yet included in the system.”
Urban people have more and better choices of goods from online trading platforms, said Quyen, adding that poorer people often had no choice but to consume counterfeit products.
Nguyen Thi Minh Huyen, deputy director of the Department of E-Commerce and Digital Economy, Ministry of Industry and Trade (MoIT), said: “Vietnam has great potential for digital economic development.”
“The scale of Vietnam’s digital economy ranks second in Southeast Asia after Indonesia. E-commerce is an important component of the digital economy with the growth rate of more than 25 per cent per year and will keep growing in the next five years,” he added.
Huyen said there was an opportunity for digital economic development, especially in the context of COVID-19.
Vietnam is aiming to have the digital economy account for 20 per cent of total GDP by 2025 and be one of the 50 leading countries in the information industry.
Also at the forum, Vu Xuan Truong, from BCSI said: “Vietnam currently has about 500,000 small and medium enterprises, of which 90 per cent are small businesses. Previously, small businesses did not pay attention to their brands, but the situation has changed in the last 3–5 years.”
He said many SMEs have built their brands, thinking a brand as a weapon to compete in the market.
In this case, building a brand with a visual image was an effective way to enter the minds of customers who were spending a lot of time on social networks, he said.
“There is a huge market for local businesses to grow bigger serving 80 million people in rural areas with their products. By bringing good products to the low-income people in rural places, local enterprises could approach a huge market with less competition,” Quyen from Tiki told the forum.
As a leader of the Department of E-Commerce and Digital Economy, Huyen shared the recent goals of the Government to spread e-commerce development in businesses and communities, easing the gap of such development between big cities and localities, building healthy, competitive and sustainable consumption markets for Vietnamese goods at home and abroad through e-commerce and making Vietnam among the top three most developed e-commerce markets in Southeast Asia.
