Doing Business

Vietnamese e-commerce has changed during the Coronavirus pandemic

Linh Pham

May 26, 2020

In the event of the spread of the pandemic and social distancing in many countries, offline-to-online shopping is an inevitable tendency. Vietnamese people use e-commerce platforms to buy necessities, hence it can be said that online shopping in Vietnam has become “a habit” during the pandemic. The number of online shoppers increases, so the power of Vietnamese e-commerce changes during the Coronavirus pandemic. The article will help you answer this question. 

User behavior has changed: from offline to online shopping

Since the outbreak of the Coronavirus, half of the Vietnamese urban citizens have declined to go outside. Results from Statista have revealed the insight into customer’s perception about shopping and outdoor activities. The participants are those living in three major cities: Hanoi, Ho Chi Minh City, and Danang. The number of citizens visiting supermarkets, grocery, and wet markets reduced by 50% and 45% of participants in the survey stocked more food at home. Additionally, online shopping activities increased by 25% whereas out-of-home consumption occasions reduced by 25%

According to the research conducted by Nielsen across Southeast Asia on customer behavior, many products are preferred in online shopping. On 19 Feb 2020, online sales for hand sanitizer jumped from 6% to 60%. Other products are also bought more on online platforms including canned abalone, lip care, beauty eye care, base makeup, insect repellent, hot cereal, shampoo, adult diaper, and household cleaner. 

Because customer behavior has changed, the shopping tendency is certainly switched and is pointed out in three points: stocking, increase in e-commerce, and the matter of price. First, when the infected-Coronavirus cases rocketed, Southeast Asian markets witnessed “panic buying”. Many people flocked to supermarkets, convenience stores to stock essential items due to the fear of the virus. Second, the power of e-commerce has lifted up as more people turn to online platforms to buy what they need to avoid contacting in crowded places. Third, the price will not be a matter. It is easy to understand. Some items such as face masks and hand sanitizers were quickly sold out, then when sellers increased the price of these products two or three times, buyers were still willing to pay. 

So, people have turned online platforms to their favorite “shopping place”, whether the power of e-commerce has changed in Vietnam?

How have Vietnamese e-commerce platforms been changed by the pandemic?

It is predicted that Vietnamese e-commerce will boom during the pandemic because people have the tendency of shopping online to avoid going out to public places. Nevertheless, whether this prediction is true or not? Based on research and study from iPrice Group, Vietnamese e-commerce, in general, see little advantages during the pandemic. 

Among the top 5 giant e-commerce platforms in Vietnam, merely Shopee Vietnam witnessed a slight increase in the website traffic in the first quarter of 2020. Shopee increased web traffic by 5.2 million visits per month quarter-over-quarter, which is the third consecutive quarter that the company witnessed the traffic increase. However, other online platforms like Tiki, Sendo, and Lazada Vietnam recorded a slight decrease in the monthly website traffic in the first quarter. Tran Tuan Anh, CEO of Shopee Vietnam e-commerce site, expressed that there was no surging in online shopping. Statistics from Similiarweb, web visits of e-commerce sites consisting of Lazada, Sendo, and Tiki dropped by 14% year-on-year in the first quarter. 

Managers of e-commerce platforms have different viewpoints about if their e-commerce takes benefits or not. VinID saw positive signs because of the rising number of visitors on the website and in the app. Besides processed food,  VinID recorded a higher demand for shopping online on fresh food namely vegetables, fruits, and meat. Besides, the application in the ecosystem and discounts on payment have attracted a large number of new clients. Mrs. Mai Lan Van, Director of Marketing VinID, has shared her thought in the interview with VTV that “The number of users shopping and buying online on VinID has increased three times”. With the e-wallet VinID, customers can pay for many categories like buying food or paying water/ electric bills. 

The search for many products has decreased by 30-50% compared to the number in early January. Mr. Nguyen Ngoc Dung, deputy chair of the Vietnam E-commerce Association, explained that people do not buy all products, only focus on essential items such as hygiene and healthcare products. At Tiki, the order for face masks rocketed 600 times and hand sanitizers surged 100 times

Case study: A letter from Tiki’s CEO to commit not to surge price

In the letter distributed to Tiki’s customers, CEO of Tiki pinpointed two main factors: 24/7 operation and fair price; the priority of security for employees and customers. These two points would be ensured during the pandemic since February. 

Mr. Tran Ngoc Thai Son, founder and CEO of Tiki, confirmed that “Within the last 24 hours, we have received a lot of questions from our customers whether they can use our service or not. We ensure that all activities on our platform will be operated as usual”. As a result, customers are capable of shopping with qualified products, fair prices, and quick delivery nationwide”.

Tiki ensures two points during the pandemic

Since the mid of February, there has been no case that violates the price regulation on Tiki. Therefore, Tiki is a company that has good management on this issue. In order to successfully supervise online kiosks, Tiki has strictly investigated the quality and price of products as well as fined those who break the rule with the most serious fine of permanently eliminating the kiosk on Tiki.

One more important thing is the health of staff and customers. This is the top priority of Tiki during the pandemic. To operating employees, Tiki is the first e-commerce platform that checks the body temperature for each employee, require washing hands regularly. Shippers under Tiki company are provided face masks, dry hand sanitizers for free and are required to wear masks when they deliver goods and contact with customers. 

Besides the two aforementioned points, Tikin encourages clients to use online payment with a view to minimizing the possibility of infecting via money contact. 

Additionally, you can have a profound insight into businesses in Vietnam during the Coronavirus pandemic.

To sum up, Vietnamese e-commerce has witnessed a switch in customer behavior, from offline to online shopping. People have focused on hygiene and healthcare products such as face masks, wet tissues, and hand sanitizers. Although online platforms are believed to take little pandemic-drive surge, many Vietnamese people, at least, try and form a “new habit” of online shopping. Certainly, Vietnamese e-commerce will grow dramatically post-pandemic and in the upcoming years.

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