One sure thing about Vietnam is that it is a very young country going through a golden population period with most of its people under 30 years of age. Vietnam is also a fast growing online shopping markets, as one of the world’s fastest growing e-commerce countries with approximately 50 million Internet users, and a forecast turnover of US$10 billion by 2020.
According to the E-commerce and Information Technology Agency of the Ministry of Industry and Trade in Vietnam, the country’s e-commerce market is growing every year at 35%, which is 2.5 times faster than its neighbouring developed country Japan. The agency also states that most small and medium enterprises (SMEs) in Vietnam that spend more than 30% of their budget on technology and internet grow almost nine times faster than companies spending no more than 10%.
As you can see, starting e-commerce business in Vietnam offers foreigners many opportunities. This article explains why you should and how you can set up e-commerce business in Vietnam.
Why You Should Start an E-Commerce Business in Vietnam
The reasons for starting e-commerce business in Vietnam are simple and can be supported by the following figures and data:
- With an impressive e-commerce turnover of US$10 billion in 2020, it is also estimated that 30% of the Vietnamese shopped online (approximately 30 million online shoppers) during this year. This number is expected to increase considerably the end of 2021. The opportunity for e-commerce expansion in Vietnam is ripe.
- Currently, Vietnam has a population of 96 million people with a rapidly increasing number of smartphone and Internet users, making Vietnam the most tempting country for ample online retail businesses.
- There was a significant 8% increase in online shopping in Vietnam in 2018 compared to 2017.You might
Types of E-Commerce Business in Vietnam
For those interested in running an e-commerce business in Vietnam, you should be aware of the common types of the business, as described in the following part:
Online retailers in Vietnam store their own goods and sell them. They do not rely on other vendors’ advertising capacity but sell their products from the stock they keep. Numerous online retailers are actually those regular retailers with brick-and-mortar stores. They make use of online presence to sell more of their products.
An online marketplace is a website where different vendors come together and sell their products on the same platform. Payments and advertisements will all go through the website platform.
This type of e-commerce business will be able to attract more customers because of a variety of products offered at the same place from many sellers. Popular online marketplaces in Southeast Asia include Shopee, Lazada, whereas renowned international giant marketplaces include Amazon and eBay.
Online classifieds in Vietnam are similar to online marketplaces. One major difference is that the website does not mediate payments as the payments will be directly transferred to sellers. Sellers are only able to control their own advertisements.
How to Start an E-Commerce Business in Vietnam
Foreigners who want to enter the Vietnam e-commerce market will need to meet the company formation requirements under the Law of Vietnam and go through certain procedures.
In general, you have to acquire certificates, such as investment registration certificate and business registration certificate, obtain approval from the Ministry of Industry and Trade and register your website in Vietnam. Additional licenses may also be required depending on your business activities.
For an in-depth guidance on penetrating the Vietnam ecommerce market and starting an e-commerce business, talk to us now. Professional consultants at Cekindo are ready to assist you with your company establishment in Vietnam. We will make sure that your business incorporation is in compliance with the Vietnamese Law.