Vietnam expects to have nearly 100% of its households connected to the internet in the next five years. Currently, 94% of urban households and 69% of rural households in the country have access to the web.
A recent whitepaper from Kantar Worldpanel recorded a surge of 177% of people in Vietnam browsing the internet in their spare time – making the country an attractive for retail companies, especially the top 10% money makers.
Last year, 6% of urban households in Vietnam had shopped online for FMCG products and spent 3-4X more than when buying offline.
This year, 23% of high income families in Vietnam are planning to shop online more often — makes sense as they are able to afford the convenience of ecommerce.
The Vietnam Ecommerce and Information Technology Agency (VECOM) expects 30% of the population will shop online in 2020 and that revenue from online will account for 5% of total retail sales, up from 2.8% in 2015.
Win over Vietnamese shoppers with social proof
Through an internet connection, customers will have easy access to a wealth of information that allows them to research before buying and making them more sceptical towards conventional advertising, especially in rural areas.
With 8 out of 10 people online everyday in Vietnam (Google, 2015), it’s natural for them to be exposed to targeted campaigns, a larger selection of products – especially on social media – and influenced by reviews from reliable community members and trusted Key Opinion Leaders (KOLs).
Social media has replaced search engines to become the more favoured ad channel for businesses in Vietnam.
Data from eMarketer shows ads in social networks to be more effective among digital channels such as news sites and mobile apps.
Babi.vn is a good example of how a brand can utilise Facebook to promote welfare, gain the trust of customers and increase conversions. The company created a Facebook page to build a community of mothers with young children to share their favourite products and reviews and driving traffic to the ecommerce site.
The Vietnamese also have a tendency to choose international and imported brands over local counterparts, stemming from the belief that they offer higher quality services and products. This makes the country an open battlefield for global companies.
This way of thinking has carried over to online shopping as well. E-retailing giants like Amazon and eBay carry better reputations over local ecommerce sites for their wide product assortment and easy return policy.
Vietnam is a market largely overlooked by companies for its slow digital payments adoption and bureaucratic barriers to opening foreign-owned entities, but for the ones that have already set up shop within the country, the ecommerce horizon looks friendly.