More than half of the online retail market share in the first quarter belongs to Shopee while TikTok Shop is increasingly consolidating its runner-up position.
A newly released report by e-commerce channel development consulting and analysis company YouNet ECI shows that consumers spent 53,740 billion VND shopping on Shopee in the first quarter of the year, helping this platform continue to maintain its leading position. Vietnam’s online retail market, with a market share of 67.9% calculated by total transactions (GMV).
The remaining rankings in the “fourth” largest multi-industry e-commerce market share in Vietnam remain unchanged. Of which, ranked 3rd and 4th are Lazada and Tiki, accounting for 7.6% and 1.3% of the market share, respectively.
Meanwhile, the notable factor is the runner-up position of TikTok Shop, accounting for 23.2% of the market share, an increase of 6.3 percentage points compared to the fourth quarter of 2023. In the first three months of the year, Vietnamese people spent 18,360 billion VND shopping here, an increase of 15.5% compared to the fourth quarter of 2023. The GMV of this platform is currently 3 times that of Lazada.
At the recent TikTok Shop Summit 2024, this platform revealed that it has attracted 2.8 million medium, small and micro enterprises to participate. In 2023, the number of sellers maintaining a stable GMV increases 3 times, and the number of views of livestream sessions and short videos increases 12 times.
Along with that, the GMV achieved through TikTok Shop’s shopping search feature increased 32 times. This shows that, in addition to the habit of going to Shopee to search for necessary products to buy online, Vietnamese people gradually have the behavior of searching for goods online on this video platform.
In the past quarter, Vietnamese people also “spent more” on online shopping, far exceeding the forecasts of the exchanges. In total, the 5 largest platforms including Shopee, Lazada, Tiki, Sendo, TikTok Shop, e-commerce data platform Metric said that the total retail revenue of the first quarter reached 71,200 billion VND, growing to 78.69 billion VND. % compared with the same period last year.
At the same time, 766.7 million units of products were successfully delivered to consumers, an increase of 83.21%. These data are independently collected by Metric after eliminating goods in the form of services, gifts with unusual sales volume, virtual orders and do not include revenue from livestream sessions.
According to the report, the results far exceeded expectations because according to many forecasts, e-commerce market sales in 2024 will only increase by about 35% compared to 2023.
The reason for the strong growth is said to be that many domestic consumption stimulation programs have been implemented, people tend to spend more freely and online shopping is increasingly becoming a daily consumption habit.
In addition, the growth of online retail is also consistent with the recovery momentum of the retail industry in general. According to the General Statistics Office, trade and service activities in the first quarter were vibrant and maintained a high increase compared to the same period last year, up 8.2%.
Mr. Nguyen Phuong Lam, Head of YouNet ECI market research department, forecasts that Vietnam’s e-commerce industry will still maintain its growth momentum with GMV in 2025 expected to peak at 16.8 billion USD. In particular, “shoppertainment” (shopping combined with entertainment) is the key link, accounting for nearly half of the total value of goods in the entire industry with 8.1 billion USD.
The reason is that Gen Z – the target group that accounts for more than 73% of the online shopping force, has paved the way for “shoppertainment” to grow. Accordingly, deciding intuitively, entertaining while shopping, and “closing orders” according to the content creation community are the three most prominent consumption habits of Gen Z. With this trend, it is expected that TikTok Shop will Continue to have opportunities to expand market share when there is an entertainment advantage of videos and livestreams to stimulate shopping demand.
In the “throne”, Shopee is not left out when it recently launched the Shopee Video feature, introducing an interactive interface similar to TikTok for shops to attach shopping carts to sell products. Shopee even encourages users to watch many videos by giving Coins (bonus points) when watching a video within a certain time.
E-commerce development is contributing to strengthening the growth rate of Vietnam’s digital economy. Analysis by Ms. Amanda Murphy, Head of Corporate Banking for South and Southeast Asia HSBC and Mr. Ahmed Yeganeh, National Head of Corporate Banking, HSBC shows that Vietnam will maintain a high growth rate. Southeast Asia until 2025.
This bank evaluates Vietnam as a leading market in the digital industry. It is also forecast to have 67.3 million smartphone users by 2026, accounting for 96.9% of Internet users.
HSBC’s survey shows that 60% of businesses operating in Vietnam plan to invest in technology and digitalization with a focus on digital payments, e-commerce and artificial intelligence. They believe that applying and enhancing digital services will meet customer expectations for convenience and improve operational efficiency.
During this journey, the expert group recommends that businesses focus on controlling costs and increasing revenue. In addition, it is necessary to review the capital approach to manage capital costs and ensure the business will survive in the long term.