Vietnam is an attractive market for e-commerce, with a young, tech-savvy population and rapidly increasing internet and smartphone penetration. The Vietnamese e-commerce sector is expected to be worth over $15 billion by 2025. For businesses looking to tap into this high-potential market, understanding the unique aspects of selling online in Vietnam is key. In this comprehensive guide, we will cover everything you need to know, from registering your business to fulfilling orders, so you can successfully launch and grow an e-commerce venture in Vietnam.
1. Reason to start a business in Vietnam in 2024
Vietnam is one of Asia's fastest-growing economies, with GDP growth of over 7% in recent years. The country has a large population of 98 million people, over 70% of whom are under 35 years old.
Based on data collected from various reputable organizations worldwide and survey results from approximately 11,000 individual consumers and nearly 10,000 businesses, the 2023 Vietnam E-commerce Report, recently released by the Department of E-commerce and Digital Economy, reveals a significant growth in Vietnam's e-commerce sector in recent years.
It is estimated that with a revenue of 20.5 billion USD in 2023, the proportion of B2C e-commerce revenue accounts for about 7.8-8% of the total retail sales of goods and consumer service revenue nationwide.
With 74% of people using the Internet, Vietnam has about 59-62 million consumers shopping online and the shopping value per person is estimated at about 300-320 USD.
Given the data for 2023, it can be predicted that 2024 will be a booming year for e-commerce in Vietnam.
2. Key considerations for selling online in Vietnam
Foreign sellers should take consider these factors when entering the Vietnam market:
Language and localization
The primary language is Vietnamese. Product descriptions and customer service need to be available in the local language. Prices should be displayed in Vietnamese Dong (VND).
Cash on delivery is popular. Local payment systems like bank transfers and digital wallets need to be offered. International methods like PayPal have limited use.
Logistics and delivery
A local fulfillment center is ideal to reduce shipping times and costs within Vietnam. Reliable delivery partners like Ezbuy Japan are essential for domestic transportation and last-mile delivery.
A mobile-responsive online store and local hosting are essential given high mobile usage. Native mobile apps can further boost engagement.
Facebook, Google, and Instagram are widely used. Local influencer marketing is effective. SEO in Vietnamese is important to drive organic search traffic.
Prompt responses and Vietnam-specific customer support channels are expected. After-sales service can boost satisfaction and loyalty.
Competitive and regulatory landscape
Research wider e-commerce trends, competitor activity, and regulations around foreign investment, taxation, and licensing.
3. Registering an online selling business in Vietnam
Here are the steps involved in setting up a legal entity to sell products online in Vietnam:
Choose a business structure
Common options for foreign businesses are:
- Company incorporation - either a limited liability company or joint-stock company
- Representative office - cannot engage in direct sales
- Partnership with a local importer/distributor
Obtain investment license
Foreign investors must get an investment license from the Ministry of Planning and Investment. The requirements and approval timelines vary based on factors like minimum capital.
Register the business
Company incorporation involves obtaining an Enterprise Registration Certificate (ERC) from the local Department of Planning and Investment.
Apply for tax registration
After getting the ERC, the company seal and bank account should be applied for. Then tax registration for VAT, corporate income tax, and personal income tax.
Comply with product regulations
Certain products may require special permits or licenses to import and sell in Vietnam. It is important to comply with product safety, labeling, and other quality regulations.
Set up online platform
With the business entity established, focus shifts to building out the technology infrastructure and digital presence - website, e-commerce platform, payment integration, and fulfillment/logistics.
Proper legal compliance from the start is essential for any foreign e-commerce venture in Vietnam. The right partners like Ezbuy Japan can help navigate the bureaucracy effectively.
4. Choosing the right e-commerce platform for your business in Vietnam
Some factors to evaluate when choosing an e-commerce platform in Vietnam:
The site needs to appeal locally with Vietnam-specific features, language/translation, payment options, currencies and measurements.
A mobile-responsive site and mobile apps are must-haves given Vietnam's widespread smartphone usage.
Marketplace vs. standalone site
Marketplaces like Shopee and Lazada offer built-in traffic but also competition and commissions. A standalone site allows greater control.
>>> Read more: Top 3 Vietnamese e-commerce sites
Integrated logistics and fulfillment services can optimize deliveries and reduce overhead costs.
Ensure the platform can easily scale with your e-commerce business as it grows and order volumes increase.
Robust security features like SSL encryption and fraud monitoring provide protection for the business and customers.
Balance features and capabilities with the overall SaaS costs and additional fees for customization, integrations, etc.
Vendor support and documentation
Look for responsive, Vietnam-localized customer support and detailed help documentation.
5. What products can you sell online in Vietnam?
Do you wonder what products Vietnamese consumers prefer? Here are some suggestions for you
Smartphones, laptops, tablets, and accessories are very popular. Consider offering installment payment plans.
Fashion and apparel
Trendy, fast fashion with strong local appeal. Women's wear, sportswear, shoes are high-demand segments.
Health and beauty
Cosmetics, supplements, personal care appliances all have major opportunities. High-quality and Korean products are preferred.
Home and living
Home appliances, furniture, kitchen tools, and home decor items have seen uptake. Smart home gadgets are also gaining interest.
Food and beverage
Packaged snacks, confectionery, dairy products, and imported food and beverages are well-liked.
Baby and mother care
Baby care, toys, mom and child nutrition products have a large target demographic.
Autoparts and accessories
Vehicle sales are surging in Vietnam. Online retail of parts, tires, GPS, audio systems, cleaning tools is lucrative.
Conduct additional market research to identify trends and niches before deciding on your product focus areas in Vietnam. Localization and customization are key - products must appeal specifically to Vietnamese tastes and preferences to really attract customers.
6. Fulfillment and Shipping options for e-commerce in Vietnam
Order fulfillment and shipping is critical for providing customers a smooth online buying experience. Here are some popular options for Vietnamese e-commerce businesses:
For smaller merchants, storing inventory and handling fulfillment internally can be cost-effective. Allows for greater oversight and quality control.
Larger sellers can benefit from outsourcing to a third-party fulfillment provider like Ezbuy Japan. Offers scale, optimizes processes, but less control.
For sellers on platforms like Shopee, Lazada, TikTok Shop, Tiki,... utilizing their in-built fulfillment and delivery network makes operations simpler.
The fulfillment strategy should align with sales volumes and focus on achieving fast, low-cost delivery across Vietnam. Delivering orders promptly and reliably is key to pleasing customers and sustaining e-commerce success.
7. Payment methods and currency considerations for selling online in Vietnam
Offering the right payment options and managing exchange rates are vital aspects of operating an e-commerce business in Vietnam:
- Cash on Delivery - Most popular online payment method. Allows customers to pay when receiving orders.
- Bank transfers - Widely used for higher-value purchases. Direct bank-to-bank money transfers.
- Digital wallets - Includes e-wallets like AirPay, MoMo, and Zalopay. Uptake is increasingly driven by youth.
- Credit cards - Visa and Mastercard have decent penetration. American Express and JCB also growing.
- PayPal - Used by some Vietnamese but low overall adoption. May expand with more foreign sellers targeting Vietnam.
- Prices should be displayed and accept payment in Vietnamese Dong
- Conversion fees apply when settling international payments into local bank accounts.
- Forex volatility impacts profit margins. Consider hedging instruments to manage currency fluctuation risks.
Adapt payment collection and funds repatriation workflows to suit cross-border e-commerce. Offering the commonly used local payment methods facilitates checkout and builds trust with Vietnamese buyers.
8. Ezbuy Japan helps foreign businesses start selling in Vietnam
Ezbuy is an e-commerce enabler that provides cross-border selling solutions for international brands entering Southeast Asian markets like Vietnam.
Key capabilities offered by Ezbuy Japan include:
- Register a business in Vietnam
- Setting up online stores in various Vietnam's marketplaces
- Integrated multi-channel payment solution
- Warehousing and domestic order fulfillment
- Last-mile delivery management
- Customer service support after sale
- Digital Marketing
You can find more information about our help at Sell in Vietnam service.
In general, Ezbuy facilitates overseas businesses in launching and scaling in Vietnam through its expertise and infrastructure. We handle all the complexities of cross-border e-commerce. This enables brands to tap into Vietnam without heavy initial investment. Partnering with Ezbuy Japan significantly eases market entry and operations for international e-commerce players.
Vietnam's rapidly digitalizing consumer market offers tremendous potential, but also has unique intricacies. This guide covers the key steps for overseas businesses looking to begin selling online in Vietnam - from how to set up a legal entity, choosing a suitable e-commerce platform, identifying product opportunities, fulfilling orders, accepting local payment methods and managing currency risks. Adopting a localized approach and having an in-market partner goes a long way in navigating Vietnam's distinctive e-commerce landscape. With the right strategy and execution, Vietnam's online commerce boom can provide immense growth opportunities for foreign brands and retailers.