Shopee, TikTok Shop account for 93% of online retail

Vietnamese consumers spent a total of VND87.37 trillion (US$3.48 billion) on the top four platforms in the second quarter, up 10.4% from the first, according to a new report by e-commerce intelligence firm YouNet ECI.

Lazada and Tiki, the other sites that make up the top four, account for just 5.9% and 0.7% of the market.

Shopee was the only platform to see growth — of 3.5 points — in market share while the rest saw their shares shrink.

According to YouNet ECI, the online retail market is now essentially a race between Shopee and TikTok Shop.

TikTok Shop has yet to catch up with Shopee largely due to its heavy reliance on the fashion and accessories sector, which accounts for 37.5% of its total transactions, the firm said.

Meanwhile, Shopee has been learning from it, incorporating short-form videos and livestreams into its platform and organizing shoppertainment activities.

While TikTok Shop was hosting livestream sessions that sold hundreds of billions of dong worth of products in June, Shopee raked in VND33.8 trillion in sales in the same month by offering live events and music festivals.

Shopee has also been catering more to buyers to win business despite facing a backlash from sellers on the platform.

It extended the return period for buyers from three to seven days to 15 in March and trialed a new longer cancellation window in June.

Shippers waiting to deliver goods to online shoppers at the Me Linh Square in HCMC’s District 1, June 2023. Photo by VnExpress/Dy Tung

Spending on online shopping usually increases in the second half of the year when platforms roll out promotions to stimulate demand.

During the 2024 Vietnam Mega Sales event at the end of last month TikTok Shop quoted a survey conducted by international market research firm Kantar that showed 69% of its users planned to shop more during the second half.

It also revealed that sales through livestreaming have been increasing, with a recent event in June selling 153% more products than similar programs earlier in the year.

Vo Anh Tu, co-founder and creative director of marketing agency TCC & Partners, said livestreaming would remain widespread in the second half.

“It is a channel that allows quick interaction between sellers and buyers. Livestreams are places where many discounts are directly offered and transactions are made instantly, saving time.”

But the YouNet ECI report said revenues decreased in the second quarter for 26,000 sellers.

Nguyen Phuong Lam, director of market analysis at YouNet ECI, said sellers could no longer expect to perform well merely by maintaining their usual online operations.

“Gathering data, knowing how to analyze it, and continuously finding new directions for development are now mandatory.”

He forecast that in the next three to five years, the primary drivers of growth for Vietnam’s e-commerce market would be consumers’ habit of shopping online daily, high-value products and shoppertainment.