In this second quarter of 2020, Vietnam’s e-commerce industry clearly showed new developments even outperforming other countries in the region thanks partly to Covid-19’s impacts.
E-commerce aggregator iPrice Group in collaboration with SimilarWeb and App Annie publishes Map of E-commerce Vietnam Report for Q2/2020. The report points out many major changes in the entire e-commerce industry in Vietnam due to the influence of Covid-19.
1. Steady growth for online grocery
In the first quarter of 2020, the report showed that demand for online grocery and online fresh produce in Vietnam increased sharply. Now in the second quarter, even though Vietnam soon ended the social distancing phase and had 99 days without any new Covid-19 cases, this trend was still well maintained.
Data from iPrice Group and SimilarWeb shows that: after the first 6 months of the year, traffic to online grocery websites on average increased by more than 41%. Similarly, visits to cosmetics & healthcare websites also increased by 21%.
This result proves that the demands for the online grocery and wellness products are not temporary. The impacts of Covid-19 have spawned new online shopping habits, providing long-term growth opportunities for those previously un-favored product categories.
Facing this trend, in Q2, e-commerce marketplaces seemed to have identified department stores and fresh produce as a long-term direction, leading to more concrete and assertive decisions.
Since then, e-commerce marketplaces have been introducing new developments to the online grocery market, especially in logistics and transportation. In mid-April, Lazada deployed a service to provide fresh food, fast delivery in 2 hours. In May, Tiki also introduced TikiNGON – a service to deliver fresh produce in 3 hours.
In the opposite direction, the fashion category continued to have a gloomy quarter when the total website traffic decreased by 29% quarter-over-quarter. The mobile device category also decreased by 13% compared to Q1. The drop in spending power has caused the loss in demands for non-essential products.
2. Outstanding increase in shopping app usage
During the peak time of social distancing, especially in April, e-commerce marketplaces unanimously reduced their usual promotional activities, and in return, promoted livestreaming and game activities on mobile applications.
As a result, in Q2, according to iPrice Group and App Annie, the total number of visits to online shopping applications in Vietnam reached 12.7 billion, the highest ever and up 43% compared to the 1st quarter.
This growth rate is higher than that of most countries in the region. According to iPrice Group and App Annie, the whole Southeast Asia region in Q2 increased by 39%. Singapore increased by 25%. Indonesia increased 34%. In terms of specific numbers, Vietnam also ranks third in Southeast Asia in terms of the total traffic on online shopping applications, accounting for 19.5% of market share in the region.
Notably, at the same time, the total number of visits to top 50 e-commerce websites in Vietnam decreased slightly by 1% compared to Q1.
E-commerce spreading to mobile applications has been predicted for a long time. By the end of 2019, e-commerce marketplaces have all started to apply many new features to develop shopping on mobile: Tiki has TikiLive, Shopee has Shopee Feed, Sendo has SenLive, etc.
The sudden arrival of Covid-19 in early 2020 became of a turning point for Vietnam’s e-commerce to accelerate this process. With more people staying at home, and with the increasing demand for online entertainment, Q2 became the ideal condition for e-commerce marketplaces to apply the features they have tested over time.
In that context, the competition unfortunately seems to be overwhelmed by foreign businesses. According to iPrice Group and App Annie, the top 10 most used online shopping apps in Vietnam in Q2 were Shopee, Lazada, Tiki and Sendo, followed by a series of foreign apps. Thegioididong is the only domestic app apart from Tiki and Sendo in the top 10.
Photos and Web Content by iPrice