Premia TNC Vietnam Team
Author
Vietnam’s E-Commerce Growth and Gen Z’s Role
Vietnam’s e-commerce market is growing rapidly, driven by a younger generation aged 18 to 35. This generation actively uses the internet and smartphones, preferring online shopping and digital payments.
This growing backdrop has made establishing an e-commerce entity an essential element for running a successful business in Vietnam.
a. Vietnam E-Commerce Market Statistics
Key Factors | Data from 2024 | Key Considerations | References |
E-Commerce Market Size | Estimated at 23 billion USD | Vietnam’s e-commerce market size. | |
Compound Annual Growth Rate (CAGR) | 20% or more | Average annual growth rate from 2023 to 2027. | |
Percentage of Population Aged 18 to 35 | Estimated around 35% | The younger population in Vietnam. | |
Rate of Mobile Shopping | Estimated around 72% | Percentage of e-commerce transactions via mobile. | |
Usage of Digital Payment | About 50% or more | Percentage of digital payment preferences such as e-wallets and bank cards. | |
Major E-Commerce Platforms | Shopee, Lazada, Tiki, Sendo | The most popular e-commerce platform in Vietnam. | |
Usage of Social Media | Estimated around 73% | Use of social media plays a role. | |
Frequency of Online Shopping | 88% shop more than once a month | Percentage of users who shop online at least once a month. |
b. Vietnam E-Commerce Market Expansion (USD Billions)
2018 | 8.5 billion |
2019 | 11 billion |
2020 | 14 billion |
2021 | 17 billion |
2022 | 20 billion |
2023 | 23 billion (estimated) |
c. Preferred Payment Methods
Method of Payment | Percentage |
E-Wallet | 37% |
Bank Card | 31% |
Cash on Delivery (COD) | 25% |
Others | 7% |
d. Overview of Key Figures and Statistics
Key Factors | As of 2023 | Key Considerations |
E-Commerce Market Size | Estimated at 23 billion USD | Vietnam’s e-commerce market size. |
Compound Annual Growth Rate (CAGR) | 20% or more | Growth from 2023 to 2027. |
Percentage of Population Aged 18 to 35 | About 35% of the total population | The younger people in Vietnam are digital consumers. |
Rate of Mobile Shopping | About 72% of all e-commerce transactions | E-commerce transactions via mobile. |
Usage of Digital Payment | About 50% or more | Preference for e-wallets and digital payments among 18-35 year olds. |
Frequency of Online Shopping | 88% shop more than once a month | Users who have made online shopping a part of their routine. |
Major E-Commerce Platforms | Shopee, Lazada, Tiki, Sendo | Major e-commerce platforms in Vietnam. |
Usage of Social Media | About 73% of the total population | The rate of social media use influences purchasing decisions. |
Demand for Eco-Friendly Products | Growth of 25% | Growing interest and demand for eco-friendly products. |
Preferred Payment Methods | E-wallet at 37%, bank card at 31%, and COD at 25%. | Major payment methods used by the younger generation. |
Mandatory Procedures for Company Incorporation in Vietnam
Foreign investors must complete the following procedures to establish a legal entity in Vietnam for e-commerce business:
- Investment Registration Certificate (IRC): Foreign investment requires application for an Investment Registration Certificate and submission of a business plan.
- Enterprise Registration Certificate (ERC): After issuing the IRC, you will receive an Enterprise Registration Certificate to complete the incorporation process.
- E-Commerce License: This is a license required to operate an e-commerce platform. This allows for an online platform, website, or mobile application.
Key Considerations for Company Incorporation in Vietnam
When establishing an e-commerce corporation, foreign investors must consider the following:
- Equity Structure: Some business models may require equity structures with local partners, and regulations for 100% foreign-owned companies should also be reviewed.
- Tax and Accounting Regulations: Vietnam has a basic corporate income tax rate (CIT) of 20% and has specific tax requirements related to e-commerce.
- Intellectual Property Protection: Securing intellectual property (IP) protection is essential for online businesses.
- Local Regulations: You must strictly comply with regulations related to e-commerce operations, including privacy and consumer protection.
Vietnam E-Commerce Market Outlook and Insights
The rapid growth of Vietnam’s e-commerce market is expected to continue, driven by increased mobile and internet usage. Key trends include:
- Mobile Shopping Rises Rapidly: The growing number of mobile internet users in Vietnam is fueling a mobile-centric shopping trend.
- Digital Payment Systems: The younger generation’s preference for convenience is driving the expansion of digital payment methods such as e-wallets.
- Eco-Friendly Products: With growing demand among Vietnamese consumers for eco-friendly products, there are opportunities for e-commerce platforms offering sustainable products.
- Social Media Marketing: As younger generations increasingly prefer to research products through social media, social media marketing is becoming an essential trend.
Managing Compliance and Legal Procedures in Vietnam
Issuance of Investment Registration Certificates (IRC) and Enterprise Registration Certificates (ERC)
Foreign investors establishing a business in Vietnam must obtain an Investment Registration Certificate and an Enterprise Registration Certificate. This process involves complex procedures and numerous documents, and failure to meet the requirements for each document can result in rejection. A consulting firm can assist in preparing the necessary documentation in accordance with legal requirements.
E-Commerce License
A Vietnamese e-commerce license is required to operate an online platform, website, or mobile application. A consulting firm can guide you through the process of obtaining this license and assist you with preparations.
Essential Overview of Local Regulations and Policies in Vietnam
Equity Restrictions and Local Partners
Some industries in Vietnam may have foreign ownership restrictions. In certain e-commerce sectors, collaboration with local partners may be essential. A professional consulting firm can help you understand these regulations and design an appropriate partnership structure
E-Commerce Regulations
When operating an e-commerce platform, you must comply with regulations regarding personal information protection, consumer protection, and the prevention of unfair trade practices. Violations may result in fines and business restrictions. Consulting firms accurately understand these laws and support compliance with the regulations necessary for business operations.
Streamlined Tax and Accounting Solutions in Vietnam
Vietnam Corporate Tax and Indirect Tax Requirements
Vietnam’s corporate tax rate is set at 20% by default, and additional tax requirements may apply depending on e-commerce platform operations. A professional consulting firm can help you design an efficient tax structure to minimize your tax burden.
FTA Utilization and Tariff Optimization
The Korea-Vietnam Free Trade Agreement (FTA) may provide tariff benefits. Consulting firms can leverage this to offer cost-saving strategies that can enhance competitiveness.
Understanding Local Markets for Smarter Strategies in Vietnam
Vietnamese Consumer Trends
The Vietnamese e-commerce market is experiencing a surge in demand for mobile shopping, social media marketing, and eco-friendly products. A professional consulting firm can provide strategies tailored to local consumer trends and market conditions, enabling effective marketing efforts from the outset.
Competitor Analysis and Branding
Competitor analysis and a differentiated branding strategy are essential for securing a competitive position in the local market. Consulting firms analyze local competitors and provide advice on branding that suits your target customer base.
To Conclude
Vietnam’s e-commerce market is expected to expand further with the rise of the younger generation. Foreign investors need to understand the incorporation process and key regulations and develop strategies to capitalize on mobile and social media-centric trends. Investors considering establishing an e-commerce company in Vietnam can fully capitalize on Vietnam’s potential by leveraging the market’s outlook and growth potential.
Foreign investors seeking to enter the Vietnamese e-commerce market must comply with complex legal requirements and detailed local regulations. With the assistance of a professional consulting firm like Premia TNC, incorporation procedures can be streamlined, customized strategies can be tailored to the local market, and regulatory compliance can help reduce risk and increase the likelihood of early success.
Premia TNC Vietnam Team
Author
Premia TNC Vietnam is a dynamic team of experts dedicated to supporting businesses and entrepreneurs as they establish, manage, and grow their presence in Vietnam and across the region. Premia TNC Vietnam specializes in providing tailored corporate services, from company incorporation and compliance to tax planning and accounting. With our extensive experience and deep understanding of the local regulatory environment, we are here to make business operations smoother and more efficient.
