Strategic partnerships with traditional retailers are expected to drive growth for e-commerce marketplaces in Vietnam

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The Vietnamese e-commerce industry recorded strong growth during the two years of the global pandemic outbreak, as more and more consumers turned to online channels for their purchases. Over the next three to four years, the industry is expected to continue its growth momentum, with the B2C retail e-commerce GMV projected to exceed US$16.4 billion in 2022, according to PayNXT360 estimates. By 2026, the e-commerce value in the country is projected to reach US$30.5 billion, which means that Vietnam will rank second when it comes to e-commerce growth across the Southeast Asian markets.

This growth in the Vietnamese e-commerce market has been specifically driven by the e-commerce players that have adopted innovative growth strategies to increase their market share. Of course, consumers have turned to online channels in increasing numbers. However, adopting specific growth strategies has assisted e-commerce marketplaces to boost their order volumes and revenue over the last two years. For instance,

• Lazada, one of the leading e-commerce players in the Southeast Asian region, has consistently focused on creating more value for its customers as well as business partners. This strategy has assisted the firm in driving its market share in the growing e-commerce industry in Vietnam.

During the pandemic period, Lazada shortened the product listing product and offered integrated management solutions to support sellers on its platform. The firm also shortened the sales registration process for fresh food suppliers during the peak of the pandemic outbreak. Furthermore, the firm also implemented marketing campaigns and focused on timely, non-contact deliveries for its customers. Having a robust supply chain infrastructure allowed Lazada to meet the urgent consumption needs of the consumers. All of these factors combined assisted the firm to record strong sales volume and growth in revenue in 2021.

While the firm enjoyed high growth in 2021, amid the growing interest in online shopping among consumers due to the pandemic outbreak, Lazada faced a number of different challenges over the last two years. For instance,

• Grocery order volume increased significantly for the firm during the pandemic outbreak. Consumers wanted their orders delivered fresh and on time. This created challenges for the firm on the supply and infrastructure side. Ramping up infrastructure, that too during the global pandemic outbreak, was a difficult task for the firm.
• Notably, to ease these challenges in the supply chain side of its business area, the firm started to forge strategic alliances with traditional retailers in Vietnam as well as in other Southeast Asian markets. In Vietnam, Lazada entered into a strategic partnership with Masan Group, which operates many offline stores, including for groceries. Notably, this collaboration with Masan Group allowed Lazada to deliver groceries and other products from their stores to consumers in an efficient manner.

PayNXT360 expects the trend of such strategic partnerships between e-commerce marketplaces and traditional retailers to further continue over the next three to four years, as online platforms seek to manage supply chain challenges. Rather than competing with each other, a collaboration between the online and the offline world can drive further value for both customers as well as the businesses themselves, as seen in the case of Lazada, which has achieved strong growth across different Southeast Asian markets.

Over the next three to four years, PayNXT360 expects Lazada to further strengthen its network of traditional retailers across different product categories in Vietnam and other neighboring countries. This will subsequently assist the firm to provide more value to its shoppers while driving its gross merchandise value. Furthermore, as the Vietnamese e-commerce industry continues to grow over the next three to four years, PayNXT360 expects more players to adopt similar growth strategies, which will further drive competition in the space from the short to medium-term perspective.

To know more and gain a deeper understanding of the B2C E-Commerce market in Vietnam, click here.