1. In the pre-COVID era, we projected the nascent Vietnam etailing market to grow to 8X it current size, by 2025

Vietnam eTailing market has been one of the fastest growing markets over the last 3 years and we predicted it to be on track to retain this momentum.

Basis supply and demand side interactions, our pre COVID forecasts indicated a 2-3x growth in both online shoppers and the no. of transactions per user over 2019-2025, ultimately enabling 8X growth in size over this period leading to 18% online retail penetration.

However, we believe the COVID pandemic has throttled the growth of online channel with potential to take it to 10X is current size by 2025.

Key Questions – what are the enablers and categories driving this upsurge in growth?

2. The COVID story of Vietnam has been that of Macroeconomic resilience leading to relatively positive future outlook

Vietnam has been a case study on effective government response to COVID pandemic with aggressive contact tracing, testing, mass quarantining, timeliness, and the efficient mobilization of state agencies. This has led to 0 reported deaths due to COVID.

The overall macroeconomic fundamentals remain robust at the wake of COVID and they are expected to benefit from the shift of Manufacturing hubs from China.

Key Questions: Who are the direct and indirect beneficiaries of this macro-economic Shift?

3. There has been marked shift towards digital transformation as the consumers embrace online

Our previous estimates on the expanding digital funnel will be achieved earlier as VN sees an acceleration in the digital move of commerce.

• Vietnam has seen a surge of demand from online channels in the past month at the wake of the lockdown.
• Banks have cut online transaction costs to encourage cashless transactions.
• Retailers have reported a tenfold increase in orders through phones and apps.

Key Questions: Which are the sectors/categories poised for aggressive expansion?

4. Within E-tailing, significant increase in Grocery and Electronics sales over the last month, while Fashion has dampened slightly

While COVID has created a surge in online Etail sales at an aggregate level as we observed in some other markets as well, Electronics has turned out to be a key beneficiary of this change (followed by FMCG) which is starkly different to other markets. This is partly due to the relatively positive consumer sentiment owing to strong Macro fundamentals.

Key Questions: What are the underlying macro drivers behind these category growth numbers and how are they expected to evolve post COVID?