Overview of e-commerce market in Vietnam

According to data from the Department of Electronic Commerce - Vietnam MOIT the market are a lot of units and individuals to participate - more than 200 units registered e-commerce activities. Individual business households and individuals selling online through social networks: Facebook, Zalo… or sales websites in the millions. This number is increasing with time.

Mr.Tran Vinh Nhung, Deputy Director of HCM City Department of Industry and Trade said that revenue from Vietnam E-commerce market in 2013 reached $ 2.2 billion. The size and growth forecast to 2017 this figure will reach USD ~ 10 billion.

Overall, the data shows that e-commerce market is increasingly more active. The emergence of Adayroi, brand protected from investments Vingroup crisis makes more vibrant market. The competition will help the market to go up, businesses and fumbling, navigating and exploring the market will create an attractive playground.

Lazada made a campaign swing fast, win fast with image, branding, video, advertising messages, pictures, banners... appeared everywhere from the media: newspapers, radio,TV ,Internet... to banners and slogans in the commercial center, shop, shop to dominate the market. Adayroi Vingroup launched with a portfolio covering almost all sectors, Lazada also act counter: Sale of group buying voucher and planned cooperation with convenience stores to sell consumer goods.

According to the US Commerce Department, sales through e-commerce channels and accounts for 8-10% of retail sales. There are many reasons that customers prefer to shop at stores, supermarkets offline! So, any chance, how does the e-commerce enterprises in Vietnam can be successful?

The digital strategy for e-commerce business

The retail industry has 3 basic factors affecting the attitude, the desire of buyers: price, number of products, and convenience in the purchase. Electronic commerce also needs to develop technology platforms, the core product to fully meet three factors. With all three elements of the retail industry that Amazon, Alibaba has instilled: the price, quantity, and convenience products contribute significantly to the success, growth of exchanges on.

Digital plays a role in three factors affecting the online purchase? Digital has not really played a prominent role in most of the e-commerce business in Vietnam by:

• The price determined by the supplier, pricing policies, business profitability operated by b2c websites, community marketplace on price.
• The number of products determined by the list of goods, the number of suppliers, the magnitude of the supplier.
• The level of convenience with the payment of the contribution, the speed of delivery, change delivery policy ...

With many e-commerce businesses in Vietnam, the digital channels of SEM, Facebook Ad, SEO, Display, Retargeting, remarketing .. only act as a channel of business communication to your potential customers, no more no less. Information usually promotions, are cleverly integrated in all frontal PR or banners, text ads on search (SEM), Facebook Ad, Adwords… Whenever a promotion, a series of banner will be designed, pushing up advertising channels.

Anyone who has ever worked themselves optimally to orders from the digital marketing channel will see an increase in activity of ecommerce orders both simple and complex. Promotions is also a substance with businesses, continuously created to maintain order quantities.

A source from the personnel working in the industry for many years, said Deca, Tiki, Cdiscount, Sendo with not too large marketing budget, streamlined team (about 10 people Sendo, Deca 5 people) still reach 600 orders - 2k orders per day. But to turn up, 10k to 15k from the line every day, pass Lazada is at orders 6k, 8k line Hotdeal level is another story. Increased from 1k to 10k line orders / day, the small improvements on key words, the design of a banner is not enough to help you grow.

When digital strategy and the convenient prices

To confirm the position at a certain stage, the battle on price is not a bad option. However, with most of the rivals to battle all use digital information channel for promotion push. Will we be able to do differently? With basic digital marketing mix, product in ecommerce will consist of 2 parts:

1. UX: Web, shopping experience, the features on the website

2. Product: products sold on the website

Also with the placement of the price competition, has elevated digital Jet.com become a part of their competitive strategy. Using technology, sophisticated algorithms, integrated delivery costs become a factor affecting prices in the product.

There are ways to reduce the retail price: purchase at the warehouse. Saves a lot of different costs, warehousing a limited number of products and bring all of the savings that the buyers have a membership card ... or apply technology to continuously calculate based on choice customer products as the cheapest copy also help enterprises optimize pricing.

The report, from the actual results also showed that 60% of consumers agree that they will get the best price when buying online, 54% thought that prices will better online than in-store purchases.

Innovative models - from cheap shipping cost

Develop business model based on profitable plan: Yearly member fee collection and ensure member - the buyer will have the lowest price is also an organized way to save costs.

Source goods sold + hybrid auto supplier that applies Lazada has brought diversified products, competitive prices. Lazada now has more than 2,000 customers in the marketplace partners. After moving from B2C to the marketplace model, the number of products increased rapidly and continuously Lazada.

With vendors, in addition to retail distributors such as (FPTShop, Pico, Dienmaycholon, Home center, ...), even cooperation Lazada manufacturers (Lenovo, Xiaomi, Samsung ...) and supply unit services (HSBC, the bank, Vietcombank, Vietinbank, Viettel, Home Credit, ...).

Find products

Jet says the product from them or from retail partners will give members at least 5% lower than the opponent. Commissions they get from the retailer will transfer to the customer. As the first product to the cart, Jet will select retailers with the ability to satisfy the most efficient order. When adding the next, with each product added, Jet will select suppliers / retailers have the best price. Cost savings will be passed on to customers. Icon "Smart" will appear next to the said reduction (savings). The more products, the more savings will accrue.

Image: BI

To save even more, buyers can opt reimbursed for products purchased. Or they can choose to pay with debit cards instead of credit cards.

Photos: techcrunch.com

In Vietnam, if you do not pay upfront with a slight advantage or reduced price compared to credit cards. Lazada, Tiki and other partners began cooperating with Visa Card, Master Card for additional discounts or refunds (cashback) for orders upfront payment by credit card. This is a tactic so widely applied to reduce the amount of COD orders.

Free shipping is strategic to calculate something you often hear from experts on supply chain: Free shipping is never really free. Retailers will spend millions of dollars to transport the goods to you, so they will be charged to your selling price. Lore says that Jet has brought better way to price: the buyers and retailers believe that prices are compared between the products, he believes that a deeper savings will come from reducing operating costs transfer of the entire cart. If you do not accept the delivery, prices will fall further. If you use a debit card instead of a credit card, the price continued to fall further.

As one of the world's fastest growing telecom operators, and the biggest telecom group in Vietnam, Viettel now has many strengths in conquering eCommerce market including extensive network / Store and Supermarket system distributed throughout the country. The delivery unit of Viettel - Viettel Post is also one of the most reputabel shipping agency in Vietnam. Moreover, the variety intelligent forms of payment such as Bank Plus, Viettel Payment Gateway, the incorporated between distribution channels and the convenient online inventory management - Limex Viettel are the things that have contributed a solid foundation for the company. With these above elements, Viettel is expected to become the next company successful in applying Digital Transformation to build models and operating procedures to create extremely robust competitive advantage.