90 pct of stores in Vietnam use an online outlet to reach customers: survey

Local stores in Vietnam are increasingly turning to online sales to reach the two-thirds of the population that is online, a new survey has found.

Data collected by Vietnam’s sales management software firm Sapo shows that as many as 90 percent of stores across the country are going online to connect with customers.

Of the 1,000 stores surveyed, 35 percent said online sales accounted for more than half of their total revenue in 2017.

Cosmetics and jewelry vendors earned the most from online sales, which made up 48 percent of their total revenue last year, while pharmacies earned the least with just 12 percent.

Direct sales are still the most most effective means of trade, followed by Facebook, company websites, Instagram, homegrown messaging app Zalo, and authorized dealers, the survey found, after talking to firms with at least three outlets with a minimum of seven employees working at each.

E-commerce in Vietnam is expected to expand from a 0.5 percent share in the fast-moving consumer goods (FMCG) market to 2.2 percent in 2025, coupled with the rise of digitization, according to a report released in November last year by market research firm Kantar Worldpanel.

The gap between online and offline sales is gradually falling because they are supporting each other to make businesses more effective, a representative from Sapo was quoted as saying in a Sunday report by the Vietnam News Agency.

This idea was shared by Kantar Worldpanel last year. “We know that e-commerce is still cannibalizing offline purchases. However, there is growing evidence that online formats, in isolation, are no longer the best option for winning market share.”

"It´s about how online and offline work together to create a better shopper experience,” it said.

Vietnam’s e-commerce market climbed to about $4 billion in 2016 as one of the fastest-growing markets in the world.

Revenue from online retail in Vietnam is forecast to hit $10 billion by 2020, accounting for 5 percent of the country’s retail market, according to Kantar Worldpanel.

Around 60 percent of the country’s population of nearly 92 million is online.