How payment, warehouse solutions define e-commerce battle

With the pandemic seemingly under control, a change in consumer behavior is evident. Shoppers relied exclusively on online retailers throughout quarantine, but even as restrictions were lifted, consumers continued to make purchases online, perpetuating the demand for e-commerce platforms.

Before the pandemic, e-commerce accounted for very little of Vietnam’s retail industry. Still, as restrictions grew, the need for and development of e-commerce accelerated. Many merchants recognized the shift and established a presence online.

With a further shift in supply, demand, and distribution routes, Vietnam's current e-commerce sector has several key players, including Shopee, Lazada, Tiki, and Sendo, with many new players also seeking to invest. This increased capital has positively advanced Vietnam's e-commerce ecosystem, benefiting suppliers, merchants, and consumers, especially as systems for expedited delivery improve.

However, according to Nelson Wu, general director of BEST Inc. Vietnam, "Vietnam has one of the highest cash on delivery (COD) ratios by 90 percent, a system far more complex and time-consuming than any other method."

The pandemic and subsequent social distancing amplified the need for cashless e-payments, increasing the popularity of e-wallet platforms as VNPAY and MoMo among consumers. E-wallets are the future of e-commerce, ultimately benefiting merchants and buyers alike.

Warehouse solution

Discussing his experience searching for a warehouse, Wu said, "Four years ago, when I first came to Vietnam, I realized there was a very limited supply of international-grade warehouses. I spent many months searching for suitable warehouses in both the country's north (Hanoi) and south (Ho Chi Minh City)."

Finding only traditional logistics warehouses, he spoke with several developers about his company’s demand for a built-to-suit space.

"To my surprise, all refused partnering for fear that, once they built to our need, we would no longer need the space and they would have a hard time releasing a non-typical design. Luckily, we met with BW Industrial, who agreed to partner with us and develop BEST Inc.’s first-known automated warehouse in the country," he recalled.

BEST Inc.’s first-known automated warehouse in Vietnam developed by BW. Photo by BEST Inc. Vietnam

A long-term vision has helped BEST Inc. Vietnam survive the lockdown period, even putting the company at an advantage. Recently, they were named "Most Inspirational Motivator" at Shopee Brands and Partners Conference 2022.

Wu’s story is one among many, with countless international players choosing Vietnam to optimize business efficiency through improved automation and storage design. "The ecosystem cannot grow on its own. I believe a lot more investment is on its way," shared Lance Li, CEO of BW Industrial Development JSC.

International players optimize business efficiency through storage design. Photo by J&T Express

For e-commerce platforms, investing in warehouse solutions is even more critical as it enhances user experience, especially at the height of the shopping season. Before, consumers were happy with two to five-day delivery times, but now, both B2C and B2B segments are demanding same-day delivery, especially where fresh agricultural products are concerned.

To succeed, this sector will continue to require modern warehouse options to better support its fulfillment and delivery requirements, including suitable infrastructure, ample storage systems, and a strong network of warehouses across the country.