Monday , April 22 2024

Amid pandemic, e-commerce reigns supreme

With Covid-19 forcing people to stay at home and spend time online, e-commerce has been thriving.

When Tet, the Lunar New Year, was a month and a half away e-commerce platforms had already achieved a strong increase in revenues during their December-12 promotion program.

Lazada said sales doubled from the same period in 2020, while the number of sellers was up by 2.5 times.

Shopee also reported a strong rise in sales during the event, with most of the orders being for skincare products and house decorative items.

But Dec. 12 was not the only occasion when e-commerce sites recorded such strong sales: In 2021 they also had major promotions for Oct. 10, Nov. 11, Black Friday, and Cyber Friday.

Tiki saw sales soar nine times from normal days on Nov. 11.

According to the ‘e-Conomy Southeast Asia’ report released last November by Google, Temasek and Bain & Co., Vietnam’s Internet economy is expected to grow by 31 percent to $21 billion in 2022.

Tran Tuan Anh, executive director of Shopee Vietnam, said, “the digital transformation process has been shortened thanks to the pandemic”.

The report said eight million new digital consumers had been added between the start of the pandemic and the first half of this year, 55 percent of them living in non-metropolitan areas.

“Stickiness of adoption remains high as digital consumption has become a way of life,” it said, pointing out that 97 percent of new consumers are still using online services and 99 percent said they intend to continue using them in future.

Some 30 percent of digital sellers believe they cannot make it through the pandemic without digital platforms.

Lazada Vietnam CEO James Dong said at an event held recently that the pandemic has stimulated millions of new customers to experience online shopping for the first time.

“E-commerce has really transformed from a side channel to a core part of the growth strategy of brands and sellers”.

Because of the pandemic, e-commerce sites started to sell food and groceries during the social distancing period.

According to a study by Malaysia’s iPrice Group last September, online groceries are the only category to achieve steady and consistent growth since the beginning of the pandemic.

Google searches related to online grocery stores increased by 223 percent in the second quarter of 2021 and 11 times in July compared to May, when stringent social distancing restrictions were in place in some provinces and cities.

What next?

iPrice points out three trends in its forecast for Vietnam’s e-commerce market this year.

The first is the personalization of the shopper experience, with consumers needing e-commerce businesses to help them find the products they need, offer coupons and streamline the supply chain to shorten delivery times and ensure product quality.

The ‘Personalization Pulse Check’ report in 2018 by Accenture Interactive, an Irish multinational professional services company, had found that 91 percent of consumers were more likely to shop with brands that recognize, remember and provide them with relevant offers and recommendations.

The second trend is the rise of cashless payments.

For the first time in 2021 cash payments saw the risk of being dethroned as the most common method of payment in Vietnam after decreasing to only 42 percent of payments from 60 percent in 2020, the ‘Southeast Asia, the Home for Digital Transformation’ report by Facebook and U.S. consulting firm Bain & Company said in November.

The final trend is that of environment-friendly consumption.

Consumers have become aware that the products they use not only need to be of good quality but also safe for health and do not leave negative impacts on the environment.

The report by Facebook and Bain said environmental, social and governance (ESG) factors now count as among the top reasons for consumers to switch brands in Southeast Asia.

“People are willing to pay more for a product that is sustainably and responsibly sourced, although some product categories are more sensitive to ESG factors than others,” it said.

According to iPrice, it is hard to predict if sustainability and eco-friendliness will become the main trend in 2022, but it certainly has importance in e-commerce in the future.

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