Cash is king for Vietnamese consumers, even when they shop online.
Internet-based commerce platforms should ensure they have cash among the payment options, as many Vietnamese shoppers believe that cash on delivery (COD) makes them feel more comfortable shopping online.
According to Vietnam eCommerce and Digital Economy Ageancy (iDEA), 82 percent of Vietnamese online shoppers chose COD in 2017.
The major reason for its popularity is that the buyers can make purchases online and only have to make the payment once the goods is delivered, said Charles Brewer, CEO of DHL eCommerce.
One of the biggest nuisances of online shopping is that the product delivered can be totally different from what consumers see on the web.
COD allows customers to check the goods upon delivery, “and they have the right to refuse to pay if the products do not meet their expectation,” Brewer said.
However, the DHL eCommerce CEO believed that customers will switch to online payment once the level of their confidence in online trade channel increases.
“Online retailers need to improve the quality of their sales, and offer users a variety of payment options,” he said.
Likewise, Tran Tuan Anh, CEO of the Vietnamese C2C (customers to customers) platform Shopee, attributed the dominance of COD in the country on local consumption habit, which indicate that cash is still the most common and credible way of payment, challenging the flourishing e-commerce industry.
According to Anh, other forms of payment such as credit card and debit card are limited as consumers need time to truly be convinced by the convenience, safety and benefits of cashless payments.
“It is e-commerce companies’ task to increase the number of forms of payment for the convenience of customers, and COD will correspondingly reduce,” Anh said.
The good news is that the non-cash payment ratio has recently showed signs of growing well in Vietnam.
The online payment value of Vietnamese shopper grew 22 percent to US$6.14 billion in 2017 and is forecast to double by 2022, according to Alban Villani, regional general manager in Southeast Asia, Hong Kong and Taiwan of the leading global performance marketing technology company Criteo.
An online survey conducted over the past 12 months by Criteo asked respondents “What method do you use for online purchases?”
According to the result, 37 percent of surveyed people said they had purchased online using cash on delivery method.
Eighteen percent of respondents said they would pay by bank transfer. And the same number of people made payment through the local ATM cards.
Eleven percent of respondents paid via credit card, and less than ten percent used other forms.