Innovative startups are easing the challenges of the social commerce sector in Vietnam

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In Southeast Asia, Vietnam is leading the social commerce industry growth. Due to the high usage of social media platforms, social commerce - as a sub-channel to e-commerce - is making significant contribution to the total sales volume of e-commerce market. According to PayNXT360 estimates, the Vietnamese social commerce market is expected to account for over 15% of the total online retail economy in 2022.

Despite the rapid growth achieved by the social commerce industry in Vietnam, the sector is plagued by several challenges. For instance,

• Many social commerce sellers in the country cannot source products directly from brands in bulk. As a result of this, they are forced to rely on wholesale aggregators, which means that the sellers are not quite able to trace the provenance of their sourced products, neither get a better deal which affects their profit margins.

To overcome the supply chain issues, startups with innovative business models have entered the space. Notably, these social commerce startups are working directly with sellers, which not only allows them to buy products directly from the brands but also negotiate a better price due to their purchasing power, which in turn is passed onto the sellers. For instance,

• Aemi, the Vietnam-based social commerce startup, launched operations to solve social commerce sellers' supply chain issues. The firm works directly with hundreds of social sellers in the country to buy products directly from the brands. In addition to guaranteeing the provenance of the products, the firm also delivers products at better prices because of its higher purchasing power.
• The firm has partnered with several micro-influencers, having follower counts of 10,000 to 30,000 in Vietnam. As of now, the firm is focused on the beauty and wellness category. However, it plans to expand services into more business verticals from the short to medium-term perspective. In May 2022, the firm also raised US$2 million in its pre-Seed funding round, which was led by January Capital and Alpha JWC Ventures. Notably, it is planning to use the capital for building software for micro-merchants.
• In addition to providing a digital marketplace to social sellers for procuring a broad range of products, the firm is also offering sellers targeted digital tools which assist them in driving increased revenue and engagement. Since its launch in April 2022, the firm has partnered with 1,000 social sellers and onboarded over 20 brands, including Paula's Choice, La Roche-Posay, and Skin1004. As Aemi expands into more business verticals, PayNXT360 expects the firm to onboard more brands in Vietnam.
• From the short to medium-term perspective, the firm is also aiming to offer sellers features like drag-and-drop storefronts, thereby allowing them to better manage sales and inventory across different social media platforms.

As the social commerce segment continues to lead the growth of the e-commerce industry in Vietnam, PayNXT360 expects more innovative startups to emerge in the country from the short to medium-term perspective. Moreover, the high growth potential of the sector also indicates that more and more private equity and venture capital fund will enter the Vietnamese market over the next three to four years.

In H1 2022, several social commerce startups in Vietnam have attracted funding from venture capital and private equity firms. For instance,

• In January 2022, Mio, the smaller cities-focused social commerce startup, announced that it had raised US$8 million in investment from Jungle Ventures, Patamar Capital, Hustle Fund, and many more.
• In January 2022, On, another Vietnamese social commerce platform, announced that it had raised US$1.1 million in a seed funding round from investors, including Touchstone Partners and ThinkZone Ventures.
• In February 2022, Selly, the social commerce startup which recorded a growth of 300X since starting operation in April 2021, announced that it had raised US$2.6 million in its pre-series A round from CyberAgent Capital, Do Ventures, and others.

PayNXT360 expects the trend to continue further in H2 2022, as competition in the space continues to grow from the short to medium-term perspective. Notably, these investment rounds are expected to further drive innovation in the sector, thereby supporting the growth of the overall social commerce industry over the next three to four years.

To know more and gain a deeper understanding of the social commerce market in Vietnam, click here.