Vietnam's E-commerce developed rapidly without sustainability

This information was provided by Mr. Nguyen Ngoc Dung, Chairman of the Vietnam E-commerce Association (VECOM), at the Vietnam E-commerce Overview Forum 2024 on April 25.

Despite facing numerous challenges in the global and Vietnamese economies, the e-commerce sector in Vietnam continues to grow strongly, with a growth rate of over 25% and reaching a scale of over $ 25 billion.

Specifically, the scale of online retail of goods reached $ 17.3 billion. This growth rate is much higher than the overall picture of the economy (GDP in 2023 increased by 5.05% - according to the announcement of the General Statistics Office).

The Chairman of VECOM acknowledges that the rapid development of e-commerce is closely linked to the growth of many related sectors. Especially in the service sector, where transportation and warehousing increased by 9.2%; financial activities, banking, and insurance increased by 6.2%; accommodation and food services increased by 12.2%.

However, contrasting with the rapid growth in scale is the unsustainable nature of the e-commerce sector in Vietnam. The main factors contributing to this lack of sustainability are the digital divide, digital talent, and environmental issues.

Specifically, e-commerce in Vietnam is currently concentrated in a few major cities. Although other localities are eager to catch up, they struggle to bridge this gap.

Furthermore, high-quality digital talent trained at universities still does not meet the practical needs of the industry.

Lastly, e-commerce is increasingly impacting the environment. The rapid growth of online retail and food delivery technology is negatively affecting the environment, particularly by generating large amounts of plastic waste.

Ho Chi Minh City and Hanoi are far ahead of other localities in e-commerce development

As part of the forum, VECOM continued its annual activity of releasing the Vietnam E-commerce Index (EBI) 2024 report.

This index is compiled by VECOM from three component indices, including human resources and information technology infrastructure; e-commerce transactions between businesses and consumers (B2C); and e-commerce transactions between businesses (B2B).

The average score of this index this year is 23.1 points, an increase of 3.86 points compared to the results in the 2023 report. However, the gap in e-commerce between the two economic powerhouses, Ho Chi Minh City and Hanoi, and other provinces and cities, even within the leading group, remains significant and has not seen much improvement.

Specifically, in the EBI 2024 ranking, Ho Chi Minh City leads with 87 points. Next is the capital city of Hanoi in second place with 84.3 points. The next three positions are Binh Duong, Da Nang, and Hai Phong with 51.3, 47, and 36 points respectively.

It can be seen that even within the top 5, the scores of the top 2 cities surpass the province ranked third, Binh Duong, by over 30 points. Meanwhile, the gap between Ho Chi Minh City and the bottom-ranked province, Bac Kan, reaches 76 points.

The results are quite similar to the figures from the Report on E-commerce Sales in Q1/2024, just released by Metric, as Hanoi and Ho Chi Minh City alone accounted for over 70% of the entire market, based on the absolute advantage of their warehouse locations.

According to the report, Hanoi recorded revenue of over 20,000 billion VND (an increase of nearly 77% compared to the same period in 2023), while Ho Chi Minh City reached over 14,000 billion VND (a 65% increase compared to Q1/2023).

Moreover, among the top 10 regions with the highest sales and growth rates recorded by Metric, provinces and cities such as Quang Ninh, Bac Ninh, Hai Duong, Binh Duong, Hung Yen, and Da Nang are all ranked high in the EIB 2024 rankings.

According to Mr. Nguyen Lam Thanh, representing TikTok Vietnam, in 2023, TikTok Shop collaborated with the Agricultural Trade Promotion Center (Ministry of Agriculture and Rural Development) and the Youth Union's Rural Youth Board (Central Committee) to implement the OCOP Fair program. As a result, they recorded revenue of 100 billion VND with 800 LIVE sessions, introducing and promoting many specialties and brands from local small, medium, and micro-sized enterprises.

With the success of the OCOP Fair campaign, TikTok continues to collaborate to expand the scale, introduce, promote, diversify, and digitize domestic products on the e-commerce platform.