Vietnam’s e-commerce sector continued to grow during COVID-19. But there was significant variation in consumer behaviour, with notable differences in spending across platforms and categories. Meanwhile, social distancing is accelerating the trend toward cashless transactions. And this opens up huge opportunities for companies in the e-wallet space.
Now, with Vietnam in the midst of a fourth wave, brands need to understand how the pandemic has changed consumer behaviour in order to best respond to new customer demands.
How has the pandemic changed consumer spending?
First, e-commerce outperforms traditional brick-and-mortar retail in a pandemic. Customers prefer to have goods delivered to their doorstep, rather than going outside and risking infection. Our data shows that almost half of consumers (43%) spent less in stores during previous waves of the outbreak, compared to around a third (36%) who spent less online.
Second, brands who want to connect with consumers in Vietnam need to optimize their offer for mobile. Smartphones are the most popular device for going online, with two-thirds of people (66%) accessing the internet on their handset. That makes mobile consumers an attractive audience for online retailers.
Third, our data shows that e-commerce spending spikes during a pandemic. In previous outbreaks, as lockdowns forced shops to close and people to spend more time at home, around a third (32%) of consumers spent more online. But this trend is not the same across the board.
The fastest-growing segment was groceries, with other items such as appliances and electrical goods seeing a fall in sales. In uncertain times, food never goes out of fashion. So a new wave would be a good time for brands to launch fresh-food promotions and pause campaigns promoting other, non-essential goods.
Last, but not least, COVID-19 has made cashless transactions more popular with consumers. In doing so, it has opened up huge opportunities for e-wallet platforms. Before the pandemic hit, cash was still king. Close to 90% of Vietnamese customers preferred cash-on-delivery when ordering online.
However, more than half of people (51%) reported using cash less often since the outbreak. And almost two-thirds (60%) now feel more positive about going cashless. This could accelerate growth in the number of customers using e-wallets even after the pandemic is back under control.
Go where the customers are
Brands need to target their marketing campaigns with an in-depth knowledge of consumers and their online preferences. In Vietnam, that means recognising the urban nature of online retail.
Three-quarters (74%) of new customers come from towns and cities. And the most popular e-commerce platforms are ‘marketplaces’ like Shopee, Lazada, and Tiki. These companies take up a huge slice of total market share: Close to half of all consumers use Shopee (48%), with almost one-third (28%) using Lazada and around one-fifth (19%) using Tiki.
However, brands looking to target rural consumers need to readjust their marketing budget and invest more in social commerce. Using social networking sites to search for and sell products is more popular outside major cities, with the proportion of people using Facebook for e-commerce rising from 13% in urban areas to 18% in rural regions. Likewise, ‘marketplace’ platforms are less popular for rural consumers, while still dominating the e-commerce space overall.
E-commerce: new opportunities or business as usual?
Vietnam’s e-commerce sector was growing before the pandemic hit. Now, with lockdowns and social distancing making online retail even more popular, it is predicted to record double-digit growth even after COVID-19. So, now is the time for brands to invest in their e-commerce strategies and online campaigns. Look out for our upcoming blog where we will talk about this in more detail.
This post has just scratched the surface of the impact of COVID-19 on e-commerce. To learn more about online trends and consumer spending in Vietnam during the pandemic, download YouGov’s latest report where we dig deeper into the latest e-commerce trends and show where the opportunities lie for brands. For those who missed it, we also looked at the attitudes of Vietnamese to the pandemic in our recent blog.