Shopee continued to dominate Vietnam’s e-commerce market with a 67.9% share in the first quarter, followed by TikTok Shop with a 23.2% market share.
Lazada and Tiki are in third and fourth places at 7.6% and 1.3%, according to a new report by e-commerce intelligence firm YouNet ECI.
Around 766.7 million products were sold, an increase of 83.2%.
The figures far exceed experts’ forecasts of around 35% growth in the e-commerce market.
The surge in online shopping aligned with the overall recovery of the retail sector, which grew by 8.2% during the quarter, according to the General Statistics Office.
At a recent TikTok Shop event, the platform revealed that some 2.8 million small, medium and micro-sized businesses are currently selling on it.
The number of merchants with steady sales tripled last year, while livestream sessions and short videos got 12 times more views, it said.
Purchases made through the search feature on TikTok Shop increased 32-fold, indicating that people are actively looking for products on the site rather than buying randomly after seeing their videos while scrolling.
Nguyen Phuong Lam, head of market intelligence at YouNet ECI, expected the e-commerce market’s annual sales to grow 25% this year to $16.8 billion in 2025.
Shopping combined with entertainment, or “shoppertainment,” would be worth $8.1 billion then, he said.
This is because Gen Z-ers, the group that accounts for over 73% of online shoppers, highly favor this form of shopping and have a habit of following new trends started by online content creators, he explained.
TikTok Shop, a video-based platform, is ideally suited to capitalize on the shoppertainment trend, he added.
But competition is imminent with Shopee recently launching Shopee Video, a feature that allows sellers to interact with buyers just like on TikTok Shop.
It is also offering promotions to incentivize its users to watch videos.
According to Amanda Murphy, head of commercial banking, the e-commerce development is helping speed up the growth of Vietnam’s digital economy, South & Southeast Asia at lender HSBC, and Ahmed Yeganeh, HSBC Vietnam’s head of wholesale banking.
Vietnam’s digital economy growth has been topping Southeast Asia for the last two years, and it would continue to do so until 2025, they said.
The country is forecast to have 67.3 million smartphone users, or 96.9% of its Internet user population, by 2026.
A survey by the lender showed that 60% of businesses operating in Vietnam plan to invest in technology and digitization, especially digital payments, e-commerce and artificial intelligence, to improve efficiency and meet customer expectations.
For enterprises embarking on digitization, experts recommend a focus on cost control and capital management.