Vietnam’s export sector has experienced significant growth through e-commerce channels in recent years. With exports via online platforms reaching $3.5 billion last year, representing a 7% increase from 2021, this upward trend is projected to continue. According to a recent report by Access Partnership, a UK-based consulting firm, retail exports through e-commerce accounted for approximately 1% of Vietnam’s total export revenue in 2022. This blog will explore the potential of Vietnam’s e-commerce sector for export growth and the opportunities it presents for businesses.
E-commerce Export Potential
Based on current growth rates and recent export trends, Access Partnership predicts that Vietnam’s e-commerce export revenue could reach $5.5 billion by 2027, reflecting an annual growth rate of 9%. This projection, referred to as the “BAU -Business as Usual” scenario, suggests a substantial potential for businesses to capitalize on the country’s rapid e-commerce development.
Furthermore, in the more optimistic “MSME-driven” scenario, Access Partnership forecasts that Vietnam’s e-commerce export revenue could soar to $13 billion by 2027. However, this scenario relies on small and medium-sized enterprises (MSMEs) embracing e-commerce at an accelerated pace to export their products and services.
Advantages for Vietnam’s E-commerce Export
Vietnam is positioned advantageously to reap substantial benefits from the rapid growth of its e-commerce sector. The COVID-19 pandemic has led to shifts in consumer behavior, creating an environment conducive to increased online shopping. Vietnam’s favorable policy environment for e-commerce export further enhances its potential. These advantages, coupled with the constraints imposed by the pandemic, have positioned Vietnam as a promising destination for e-commerce exports.
Overcoming Challenges for E-commerce Export Growth
While the potential for Vietnam’s e-commerce export market is promising, businesses must overcome several key barriers. These include import market regulations, competitiveness, costs (such as marketing and logistics), and market information. The government has implemented various policies to facilitate the growth of e-commerce exports. For instance, it supports businesses establishing and maintaining online stores through Decree 80, offers initiatives to boost cross-border e-commerce, and aims to train 5,000 businesses in cross-border e-commerce knowledge and skills.
Although the government has taken measures to support businesses, Access Partnership’s research indicates that additional support is desired. The report suggests that Vietnam should adopt successful support programs from other countries, such as China’s Comprehensive Pilot Zones (CPZ), for cross-border e-commerce. These CPZs in Hangzhou have developed online integrated service platforms and offline industrial park platforms that facilitate information exchange between government agencies involved in the value chain, including customs, funding, and taxation. Such platforms have streamlined customs procedures and simplified export declaration processes for MSMEs.
The Outlook for Vietnam’s E-commerce Export
Vietnamese sellers on Amazon have experienced positive growth in cross-border e-commerce exports for Vietnamese sellers on platforms since 2019. In return, the country’s continuous momentum on Amazon is attracting significant attention from the company. Vietnam’s ability to build successful cross-border export models is attributed to its generous capacity and an increasing number of agile and responsive sellers.
In 2022, the number of Vietnamese sellers on Amazon increased by 80% compared to the previous year, totaling thousands of sellers. This seller surge led to a 45% increase in export value, with over 10 million “Made in Vietnam” products sold internationally.
Despite global economic challenges in 2023, cross-border e-commerce presents significant opportunities. To seize these opportunities, businesses are advised to focus on three key aspects: leveraging digital tools to understand customer preferences, innovating products to meet market demands, and building strong brands to enhance product value. (Check out the world’s most popular e-commerce platforms: Shopify and Magento.)
Vietnam’s e-commerce export sector has immense growth potential, as evidenced by its steady increase in revenue. The government’s supportive policies and the changing consumer landscape have created a favorable environment for businesses to thrive in e-commerce exports. By capitalizing on this opportunity, MSMEs and other enterprises can tap into the expanding global market and contribute to Vietnam’s economic growth. With continued government support and a focus on addressing challenges, Vietnam has the potential to become a prominent player in cross-border e-commerce exports.