<article>E-commerce is seen as an inevitable business driver in Vietnam, home to some 90 million people, who have quickly adopted the power of Internet.</article>

E-commerce is seen as an inevitable business driver in Vietnam, home to some 90 million people, who have quickly adopted the power of Internet.
A report by the e-commerce association and research institutes, with the sponsorship of tech giant <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=Google">Google</a>, highlights top trends in Vietnam&#8217;s internet-led business landscape, which is seeing a surge in startups and attracting the interest of large corporates alike.
<h3>E-commerce: game-changer for small businesses</h3>
Information technology and the Internet play a vital role in accelerating the growth of small businesses as they help startups and small-sized companies expand their advertising platforms, hook up with partners and reach the global market at lower costs than before.
“Internet and e-commerce have become undeniably efficient tools for speeding up the operation of small businesses, which account for some 90 per cent of Vietnam’s economy,” said Bui Quang Tuan, head of the Institution of Regional Sustainable Development, one of the authors of the report.
Moreover, electronic trading also assists startups to compete with larger, more established firms by the application of new disruptive technologies that are already developed by global tech groups.
In recent years, Vietnam has seen a vibrant small business sector, especially when it comes to tech startups, which created a lot of non-farm jobs for an agrarian country looking at promoting the knowledge economy. While the number of large companies rose by two times during the 2000-2011 period, small businesses grew by a whopping 800 per cent rate, according to the report.
The Vietnamese e-commerce market size in 2014 was estimated at $2.97 billion and is expected to touch $4 billion this year. The report has collected data from 247 e-commerce websites, from exchange platforms to discount and auction portals.
<h3>It&#8217;s a social media-integrated e-commerce play</h3>
With the strength of a young population and up to 40 per cent of the people using the Internet, Vietnam is one of the fastest growing economies in terms of Internet users. Infrastructure for e-commerce was formed between 2001-2010 and the recent three years are the booming period for social media-integrated e-commerce. Vietnam has also started to see a robust mobile commerce segment, with nearly 30 million mobile phones consumed in 2014 alone, and 65 per cent of the Internet users are on mobile.
The report shows that 81 per cent of local Internet users are active on social media and online forums in 2014, and their purposes of joining the social network included searching for goods. However, only 25 per cent of e-commerce businesses were involved in selling products through this channel, while eight per cent said to plan social-commerce in 2015. Meanwhile, 40 per cent of the customers came from social media.
With the surge of social media subscription, the report was affirmative that retail e-commerce will continue to prosper in Vietnam.
<h3>E-commerce ecosystem poses challenge</h3>
The potential of the e-commerce industry in Vietnam has not been fully tapped, as companies are facing challenges in terms of a lack of trust for the quality of goods and services offered through e-commerce websites, and the legal environment.
Although electronic payment in the country has picked up, as 48 per cent of e-commerce websites are currently operating online payment system, there is still a shortage of diverse payment methods. The most popular method is bank transfer (offered by 77 per cent of the e-commerce sites), followed by direct payment at warehouses (75 per cent) and cash on delivery (45 per cent). Only around 25 per cent of e-commerce businesses offer payment through credit cards, visa cards, and intermediary payment units such as e-wallets.
In terms of the regulatory framework and other infrastructure elements, e-commerce startups now need provisions to ensure cyber security and a smooth e-payment system, as well as logistics services and human resources for e-commerce.
<h3>Top investments in e-commerce</h3>
The report introduces the leading e-commerce platforms that have secured investments from both local and international investors during the past years.The investors were from various parts of the world, including Vietnamese angel investor, online advertising company <a href="https://deca.vn/bao-ve-nguoi-dung/index.html">24h</a> and venture fund <a href="http://seedcom.vn/">Seedcom</a>, US funds <a href="http://500.co/">500 Startups</a> and <a style="color: #000080;" href="https://www.crunchbase.com/organization/tiger-global#/entity">Tiger Global Management</a>, and others from Asia like <a href="https://www.cyberagentventures.com/en/">Cyberagent Ventures</a>, <a href="http://www.captii.com/">Captii Ventures</a> and <a style="color: #000080;" href="http://www.sumitomocorp.co.jp/english/">Sumitomo Corporation</a> have invested in Vietnam e-commerce space.
Meanwhile, a third of these 15 investees are portfolio companies of Japan&#8217;s Cyberagent Ventures, namely <a href="http://www.foody.vn/ha-noi">Foody</a>, <a style="color: #000080;" href="https://vexere.com/">Vexere</a>, <a href="http://www.dkt.com.vn/">DKT</a>, <a href="http://websosanh.vn/">Websosanh</a> and <a href="http://tiki.vn/?gclid=CJuXqIKs58gCFUYIvAod5kwDeQ">Tiki</a>.
<dl id="attachment_17493" class="wp-caption alignleft" style="width: 610px;">
<dt class="wp-caption-dt"><a href="http://www.dealstreetasia.com/wp-content/uploads/2015/10/Untitled-2-copy2.jpg"><img loading="lazy" decoding="async" class="wp-image-17493 size-full" src="http://www.dealstreetasia.com/wp-content/uploads/2015/10/Untitled-2-copy2-e1446117733595.jpg" alt="Top Vietnamese e-commerce companies that have got funded" width="600" height="413" /></a></dt>
<dd class="wp-caption-dd">Top Vietnamese e-commerce companies that have got funding</dd>
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e-commerce is seen as an inevitable development for businesses in Vietnam.

E-commerce: social media integrated play, game-changer for small biz in Vietnam

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