Vietnam's e-commerce market is projected to hit VND 399.5 trillion (US$17.3 billion) in 2023, from VND 218.3 trillion (US$9.4 billion) in 2019, according to a forecast from data and analytics company GlobalData.
This represents a compound annual growth rate of 16.3 per cent.
GlobalData further found that Vietnam's e-commerce market has doubled during the past five years, with total online spending increasing from VND90.1 trillion (US$3.9bn) in 2015 to VND218.3 trillion (US$9.4bn) in 2019.
Nikhil Reddy, Banking and Payments Analyst at GlobalData, said: “While the traditional payment instruments such as cash, cards and bank transfers are widely used for e-commerce purchases, consumer preference for alternative payments is on the rise. There is a growing demand for faster and convenient payment means, especially among tech-savvy millennials.”
According to GlobalData’s 2019 Banking and Payments Survey, cash is still the most preferred payment mode (35.6 per cent) for e-commerce purchases in Vietnam in 2019. Alternative payment solutions are gradually gaining ground and accounted for 15.5 per cent. MoMo is the most preferred alternative payment solution in Vietnam, followed by PayPal.
Meanwhile, global companies are investing in Vietnamese e-commerce companies, looking to ride on the strong growth.
In 2018, Tiki received US$5.3m and US$44.0m funding from VNG Corporation and Chinese investor JD.com, respectively. In the same year, Sendo secured US$51m from SBI Group (a Japan-based financial services company) and other investors. Furthermore, Chinese e-commerce giant Alibaba invested an additional US$2bn in Lazada, one of the leading e-commerce companies in the country.