Is It Worth Expanding The Vietnam Market?
Jul 19, 2023
01 Vietnam's economic development
Just this year, Vietnam's population exceeded 100 million, becoming the 15th most populous country in the world. Vietnam's large population and low labor force are also one of the keys to attracting overseas companies.
Vietnam's population is relatively young, with more than half of them under the age of 35, so the number of mobile Internet users accounts for more than 60% of the country's population. And most young people in Vietnam like new technology products, especially mobile phone products. The young people here earn less, but they don’t feel inferior. They dare to consume and consume ahead of time.
Vietnam's per capita GDP will reach US$4,110 in 2022, about the same level as China's around 2010. According to data released by the General Statistics Office of Vietnam, Vietnam's exports will reach US$371.85 billion in 2022, an increase of 10.6%. Vietnam's total import and export volume exceeded US$730 billion, the highest in history.
In addition, domestic demand is the main driving force of Vietnam's economic development, and the contribution of net exports to GDP is very small, accounting for only about 3%. This indicates that Vietnamese consumers' desire for imported goods is expanding, which will further drive the development of e-commerce.
02 Vietnam's Future Development Strategy
The Vietnamese government attaches great importance to the development of the technology industry and the e-commerce market.
Documents at the central government level, such as the draft national development strategy and the five-year plan, also clearly stated that five technology companies with a market value of US$1 billion should be established by 2025, and the number should increase to 10 by 2030.
According to data from the Economic and Commercial Office of the Consulate General of Ho Chi Minh City, the target for the next stage is to achieve an average annual GDP growth rate of 6.5%-7% during 2021-2025, and the per capita GDP will reach US$4,700-5,000 by 2025. Realize that the proportion of processing and manufacturing in GDP exceeds 25%, and the proportion of digital economy in GDP reaches 20%.
In such a general environment, Vietnam's e-commerce market has
03 Vietnam's e-commerce market potential
In 2021, Vietnam's e-commerce market will be worth US$13.7 billion. Among them, the sales of the three major categories of electronic equipment, fashion products, and furniture accounted for the top three in the Vietnamese market.
From the statistical statistics of website views, the most popular e-commerce platform in Vietnam is Shopee, followed by Lazada and SHEIN. Among the local e-commerce platforms, the top three platforms are Gioi Di Dong, Dien May Xanh and Tiki.
It is understood that Shopee is the largest e-commerce company in Vietnam, and TikTok’s MAU is three times that of Shopee, which means that most Internet users in Vietnam have not yet been exposed to e-commerce, and it is a relatively blank market that needs to be developed.
In the future, Vietnam's e-commerce market will continue to expand and make greater contributions to Vietnam's economic and social development.
04Vietnam Supply Chain Market Prospects
In addition, although Vietnam is undertaking the supply chain business overflowing from China, it is mainly concentrated in the field of manufacturing rather than consumer goods, and the overall level of the supply chain is still relatively backward. Therefore, there are great opportunities for more abundant and high-quality supply chains to go overseas .
05 Summary
With the in-depth development of the "Belt and Road", from the perspective of the overall market, there are many opportunities and areas for business in the Vietnamese market. Examples include e-commerce, fintech, social media, gaming, and education. In addition, there is relatively little competition in the Vietnamese market, so it can provide more opportunities for businesses.
In addition, Vietnam's consumer groups are generally young, have more disposable income, and have huge consumption potential. Therefore, it is a very good choice for enterprises to choose to deploy in the Vietnamese market.
In short, the Vietnamese market is a market worth considering for overseas companies, but at the same time, it is also necessary to pay attention to local culture and laws and regulations, and carry out localization adaptation.