Coming into 2020, the online retailers of Vietnam were confident of another great year. Even though they have been playing catch-up with their neighbours, including Thailand, Singapore and Malaysia, Vietnam is an extraordinarily dynamic marketplace, considered the fastest-growing digital economy in Southeast Asia. 

Over the past few years, eCommerce in Vietnam has been on a fast upward trajectory, with enormous multibillion-dollar investments in many startups and eCommerce platforms in the country. Vietnam was on track to be a star of the new economy. 

In the early months of the year, online sales witnessed somewhat of a slump as the initial impact of COVID-19 on eCommerce in Vietnam sent ripples through the country. But, not all sectors of the online retail market suffered, and some have indeed flourished. 

We take a closer look at the impact the global pandemic has had on the country’s eCommerce scene. 

The big hitters in Vietnam

As with many countries around the world, the dominant players on the eCommerce scene in Vietnam are clothing and technology retailers. One of Southeast Asia’s stars, Shopee is the leading online retail app in the country with over 43 million visits per month. Shopee sells a wide range of products from clothing to household goods, electronics and grocery. 

The next most popular eCommerce platform is a home-grown mobile phone retailer, This extension of the bricks and mortar store from the Mobile World Investment Corporation (MWG) declares itself the “No. 1 Retailer in Vietnam by revenue and net profit after tax”. It has expanded its offerings from just phones to all things electronic, watches and games. 

Another local company, TIKI, ranks third in popularity, providing consumers with a one-stop shop for their everyday needs — similar to Shoppee. TIKI garnered much attention and funding in recent years with Asian heavyweights and VC firm Northstar Group both investing around $44 million USD and $100 million USD respectively

These three giants are sure to be safe from too much damage during the economic turndown, but they are by no means immune to the effects. 

The COVID-19 factor

When the coronavirus crisis began, Vietnam was one of the first countries in its firing line. Close to China geographically, there are also strong commercial ties between the two countries, despite still having a troubled relationship politically. Factor in the movement of tourists between both states, and it was inevitable that the virus would arrive quite quickly in Vietnam. 

The government reacted swiftly, implementing their Emergency Epidemic Prevention plans within two days of detection of the first case. While being one of the best countries at controlling the virus, its citizens were not immune to the trend hitting many parts of the world – stockpiling. Soon shops and pharmacies were stripped of masks and hand sanitisers, forcing many to shop online for necessary supplies. 

According to the iPrice group, Vietnam’s online retailers saw a spike of 680% in demand for hand sanitiser, while face masks recorded an almost equally phenomenal increase of 610% in sales. While there was an increase in shopping for these products, other sectors took a hit with some eCommerce sites reporting an overall drop in online shopping by approximately 14% in the first two months of the year

The new normal

As the Vietnamese are settling into their new normal, online shopping is increasing steadily, but with less focus on clothing and electronics than before, with fashion retailers seeing an average of around 38% decrease in sales. Due to uncertainty surrounding employment, many shoppers are focussing on ensuring deliveries of only essential items, such as groceries and healthcare products. 

With a restriction on movement and the shutting down of gyms and sports facilities, there is a surge in sales for equipment to help people stay active and healthy at home. This sector saw an increase of approximately 116% in March. 

Other areas that are benefitting from people staying at home are the computer and gaming sectors. With more people working from home, computers and gaming equipment are in high demand. Webcam sales have increased by a massive estimate of 624% as people are trying to to improve online meeting quality. Gaming consoles are also gaining in popularity with Nintendo Switch sales rising by almost 60%.  

As people are becoming more and more concerned about their health and welfare, there is a recorded increase in the online sales of vitamins and condoms by around 42% and 67% respectively.
Despite the rocky start, eCommerce in Vietnam looks healthier than ever. Habits may have changed, and there may be some delays or lack of availability of some products due to supply chain issues. Still, people have become more reliant on online shopping, which can only be good news in the long term for the online retailers of Vietnam.