Vietnam’s e-commerce lags, but ready to take off Online retail is a recent phenomenon in Vietnam but more and more businesses are coming online the Vietnam E-commerce and Information Technology Agency (VECITA) reported in a recent survey. An ever increasing number of companies have been increasing their online presence, with 45% of 3,500 companies surveyed reporting they have a website, up from 43% in 2013. In addition, more companies are selling products through the use of social networks, with 24% of those surveyed saying they’re currently doing so and 8% expecting to start sometime in 2015. As well, the percentage of those selling products through online marketplaces is growing and is now 15%, up from 12% in 2013. Lazada.vn, the nation’s biggest electronic retailer with in excess of 270,000 products on its website boasting a market share of 21% of the market, reported a year-on-year increase of 150% in online sales in 2014. Lazada has raised an estimated US$584 million in capital from investors – Temasek, Tesco, JP Morgan, Kinnevik, and Rocket Internet – over the past few years to increase its online presence in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. FPT Corporation’s ecommerce arm, sendo.vn, currently ranks the second largest online retailer with an average of 120,000 sales transactions per month. Its online presence was fuelled with the acquisition of the customer base of 123mua.vn in July of last year.   Meanwhile in 2014 Sendo entered into a strategic business partnership with three Japanese internet service providers, namely SBI Holdings, Econtext Asia, and Beenos. “The potential of e-commerce in Vietnam is limitless,” said CEO Alexandre Dardy of Lazada.vn. Vietnam consumers have a high rate of Internet use and we believe this bodes extremely well for the future of e-commerce Dardy said, adding that as of March 2015, an estimated 45% of the population was hooked up to the internet. Yet according to VECITA statistics, Vietnam retail sales from e-commerce remains paltry at US$2.97 billion in 2014 and the nation still lags behind most other countries in the region and all developed nations. CECITA figures show that the average per capita online retail sales in 2014 were a modest US$145 per person, significantly less than the average of US$691 for India. According to Sendo Chair Nguyen Dac Viet Dung, the main reason e-commerce has not caught on more rapidly in Vietnam is that most consumers prefer to shop in person and either don’t have or don’t use plastic cards and prefer to pay in cash. In order to change Vietnamese consumers purchasing habits gradually to online shopping, both Lazada and Sendo have been trying to make the experience as convenient as possible. In addition, they have been offering huge discounts for online purchases as well as enticing customers with more attractive financing options for online purchases using finance companies such as Homecredit. “Ecommerce is expected to grow even more this year,” said Sendo Chairman Dung. "Vietnam is a late bloomer in terms of e-commerce” said Dung, but its ready to take off, and if retailers want to be successful in tomorrow’s marketplace they better get a hold of it.  VOV