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1
Online shopping boom
in Vietnam
Ho Chi Minh city, 19th April 2019
2
Internet economy
US$9 billion in 2018
3.8% of GDP
US$3 billon in 2015 and 1.7% of GDP
Internet economy is triple in 3 years
Source: GSO, Temasek, Google, Cimigo
10%11% 12%
23%24%
26%
2016 2017 2018
Growth rate of total retail sales Growth rate of e-commerce sales
The numbers got bigger…
3Source: GSO, Temasek, Google, Cimigo
Men and women HCMC and Hanoi
18-55 Class ABCD
4
300 respondents
in Q1
2019
5
1. Demand now spans a diverse product range
2. Price competition has bought transaction growth
3. The app battle for screen real estate
4. The next battle will be for the hearts
5. Price knowledge and comparison is constant
6. Trust is built, we expect transaction values to explode
7. COD reduces risk, an enabler for trust
Online shopping boom in Vietnam
6
7
1. Demand now spans a diverse
product range
Food and beverage are common in Vietnam
8
Penetration of
food and beverage
32%
5 times a month
6 times a month
33%
32%
23%
21%
19%
14%
14%
13%
9
12%
12%
9%
7%
6%
5%
5%
Fashion
Food and beverage
Electronic accessories
Cosmetics and personal
care
Books and stationery
Household items and
furniture
Personal electronic
devices
Ticketing
Products for babies
Sport equipments
Supplements/ functional foods
SPA/beauty services
Kitchen/ home appliances
Vehicles and accessories
Learning courses
Penetration of items bought online
Trust has been built…
10
11
2. Price competition has bought
transaction growth
12
13
977
77
1019
164219
619
282
Lazada Shopee Tiki
2015 2016 2017
The competition got fiercer…
14
Lost (billion VND)
15
28%
79%
17%
74%
25%
88%
16
81%
25%
Awareness
Usage in past 12
weeks
The battle is of big guys…
(Social commerce)
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▪ Better in Hanoi, among females and age
18-34
▪ Strengths: cheap price and free/ low cost
delivery
▪ Weaknesses: not good client service and
not friendly platform
▪ Main items sold: fashion and cosmetics
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▪ Better among males and age 35-55
▪ Strength: wide range of products
▪ Main items sold: fashion and electronic
accessories
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▪ Better among age 18-34
▪ Strength: Fast and reliable delivery
▪ Main items sold: books and stationery
20
▪ Better among females and age 35-55
▪ High app installment
▪ Low chosen as first choice
▪ Strength: friendly platform
▪ Main items sold: fashion
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Wide range of products/
specialized product
Price and promotion
Free/ fast/ reliable delivery
Trust of product quality
???
22
3. The app battle for
screen real estate
App is now a focus
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App is now a focus
24
25
26
87%
79%
44%
43%
29%
Application installment rate
How long can the apps
stay?
27
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4. The next battle will be for the hearts
The higher net promoter scores (NPS), the more the satisfaction
▪ Net promoter score is used to
identify the satisfaction of customers
toward the online provider.
▪ Question to be asked:
“How likely is it that you would
recommend [brand] to a friend or
colleague?”
29
30
11% 15% 9% 4%15%
58% 52% 64% 66%59%
30% 32% 26% 29% 26%
Positive (Top 2 box)
Neutrals (Medium 3 box)
Negative (Bottom 5 box)
Likely to recommend shopping channel in 10 point scale
19% 17% 18% 25% 10%
Total
NPS
NPS of online shopping channels are weak
The average NPS score in the US for online shopping is 45% according to the Satmetrix NICE 2018 average NPS by industry report.
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5. Price knowledge and
comparison is constant
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… among different
sites appear on
search engine
…among different
sellers in the same
shopping site
…using price
comparing
sites
57% 50% 32%
74%
26% Yes
No
Total
Did you compare price before purchasing?
Shoppers compare price in 74% of online purchases
Male vs. female shoppers
33
70% of women
compare price
before purchase
79% of men
compare price
before purchase
More in price comparison
▪ among different sites
▪ different dealers
▪ using comparing sites
Wide range
of products
Improve
customer
experience
Strong
search and
comparison
functionality
What could help shoppers stay with one platform?
LOYALTY
Booking.com (travelling site) has delivered well
35
Strong
search and
comparison
functionality
They guarantee to offer the lowest price. Will pay back the price gap if customers
can find the cheaper price for the same service from other providers
36
6. Trust is built, we expect
transaction values to explode
Transaction value is not yet prioritised
37
USERS
SITE VISITS
PAGE VIEWS
TRANSACTION
VALUE
Spending on small value products
38
46%
Under 300,000VND
(approx. USD13)
23%
VND300,000 – VND500,000
(approx. USD13 – USD 21)
21%
VND500,000 – VND2,000,000
(approx. USD21 – USD87)
10%
Above VND2,000,000
(approx. USD87)
Trust has been build
so the next is…
… increasing basket size
39
40
7. COD reduces risk,
an enabler for trust
Online shopping is still cash based
41
Cash on delivery
88%
Bank card
6%
Bank transfer
3%
E-wallet
2%
COD reduces the
risk for shoppers
Early-adopters
of fintech
Electronic payment is more common among young professionals
42
Age 35-44Age 25-34
Bank card
6%
Bank transfer
3%
E-wallet
2%
43
What is next?
% %
Online platforms improve the customer experience
44
Online platforms will continue competing for customers’ heart.
Improving customers’ experience is the key for success.
Customers would expect to enjoy a process of online shopping
from searching for various products, looking for best price, good
delivery service, good product quality and other after sale
services.
Shoppers can fully control the price
45
With the support of technology, the online platforms in Vietnam are
expected to provide the strong search and comparison functionality.
It definitely helps the consumers aware of and control the price
easier. It also enables trust to stay with one online platform and
consumers are not necessary to hop around for better prices.
The transaction value is expected to explode
46
Consumers now have confidence and trust in wider shopping
services and products, so what we can expect is the online
platforms will continue building trust to maximize the basket
size and compete with each other on the transaction value.
1. Demand now spans a diverse product range
2. Price competition had bought transaction growth
3. The app battle for screen real estate
4. The next battle will be for the hearts
5. Price knowledge and comparison is constant
6. Trust is built, we expect transaction values to explode
7. COD reduces risk, an enabler for trust
Online shopping in Vietnam
47
48
ask@cimigo.com
Cimigo
217 Dien Bien Phu Street, Ward 15, Binh Thanh District
HCMC, Vietnam
T: +84 28 3822 7727
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