Vietnam is a land of opportunity for foreign E-commerce companies because of its young population, high Internet penetration rate (ranked 17th in the world) and climbing smartphone penetration rates. Millennials, considered the target population of E-commerce RMS, account for 30% of Vietnam’s population (approximately 30 million people). The penetration of the Internet is projected to increase steadily, with the percentage of Internet users set to reach 65% in 2022.

Internet services made their first appearance in Vietnam in 1997. Three years later, however, the Internet usage rate was still insignificant with a 0.2% local penetration. However, the situation changed drastically over the years. In 2017, approximately 50 million Vietnamese, or half of the population, were connected to the Internet. Despite its late start, Vietnam’s penetration rate (54%) in 2017 is now higher than the world average (46.5%).

Following its accession to the WTO in 2007, Vietnam has allowed foreign investors to establish 100% foreign-owned companies. This has attracted many foreign investors, including E-commerce retailers. As E-commerce is expected to soon become an important part of Vietnam’s trade sector, currently, big names such as Lazada, Shopee (Sea Limited) and more recently, Amazon, market have seized the opportunity and entered Vietnam. In 2017, the Southeast Asian E-commerce market was growing at 35% per year, 2.5 times faster than in Japan. Vietnam ranks 4th in online shopping in the Asia Paci c region and is expected to continue booming in the coming years, with sales estimated to reach EUR8.1 billion in 2020.

This report will discuss the opportunities and challenges of E-commerce in Vietnam in the next 5 years, with a focus on the B2B and B2C sectors. The report will also discuss the impact of the EU-Vietnam Free Trade Agreement (EVFTA) on this market.