1. eCommerce sector has delivered a robust ( >37%+) CAGR growth during the last three years

As highlighted earlier (Structurally Different) Social commerce has witnessed strong growth (in tier-2 and below regions) alongside formal eCommerce (dominates tier-1 locations). Social commerce buyers prefer to interact with the sellers (mostly locals) prior to the transaction. However, our 2021 estimates indicate that the formal eCommerce platforms are gaining GMV share from Social commerce for the first time in the last three years. This possibly indicates an early stage of buyers upgrading from Social to formal eCommerce platforms.

Vietnam eCommerce, Overall Market, Annual GMV Trends, USD Bn

Note: 2021 GMV number includes forecasted number for December

2. Electronics and fashion categories under-performed, while FMCG emerged as a bigger winner of the lockdowns in 2021

• FMCG: FMCG witnessed spike in demand as lockdowns were announced in Vietnam towards the end of Q1. Despite the progressive easing of restrictions, FMCG share continues to remain above pre-covid levels as consumers are appreciating the convenience, discounts and fast delivery offered by various platforms
• Electronics: There was a demand spike in mobiles and laptops in the run-up to work from home and online classes in 1Q. However, the sector saw muted demand in the rest of the quarters
• Mobility restrictions also led to a moderate demand for the fashion category.

3. Vietnam’s eCommerce logistics infrastructure is in transition; in-house logistics share is growing slowly as the category mix and user maturity evolves over time

• Massive investments are done in 2018 towards ramping up in-house logistics capabilities and reducing dependence on 3PL
• However, the share of captive logistics did not grow rapidly in 2020. Most players relied on 3PLs due to challenges of operating outside top cities during the onset of pandemic
• Players like Lazada and Tiki have their own in-house capabilities to provide end-to-end logistic services, while Sendo and Shopee rely on 3PL partners

Total E-commerce Parcel Volume by logistics type, In Mn

4. …and funding helps local players to be better prepared to compete with regional competitors

Even in the initial phase of COVID back in 2020, funding in Vietnam eCommerce players slightly increased while in 2021, investors are keen to put their funds, reaching an all-time high deals value.

Fresh funds have helped local players to expand their service and strengthen their capabilities.

Major eCommerce Funding Rounds in Vietnam, 2019-2021, US$ Mn