E-commerce in 2025: Explosive opportunities amid fierce competition

DNHN - E-commerce in Vietnam continues to grow rapidly but faces intense competition and rising costs, forcing businesses to optimize strategies and technologies to maintain profitability.

In 2024, e-commerce in Vietnam experienced significant growth, with a 20% increase, surpassing $25 billion and accounting for approximately 9% of total retail goods and services sales. However, while opportunities remain vast, challenges such as competition and rising costs have created considerable pressure on online retailers, especially as international e-commerce giants dominate the market.

Strong growth in the digital economy

According to a report from the Department of E-commerce and Digital Economy (Ministry of Industry and Trade), with its impressive growth rate, Vietnam is now among the top 10 countries with the fastest-growing e-commerce markets worldwide. Along with the industry's strong development, the share of e-commerce in Vietnam's digital economy accounts for approximately two-thirds of its value, highlighting a significant shift from traditional sales to online methods.

In 2025, e-commerce is expected to maintain its growth momentum, especially through online sales channels like social media, e-commerce platforms, and online stores. A survey by Sapo Technology Corporation found that 77% of sellers are using at least one online sales channel, with most operating 1-5 stores. Investing in online advertising channels such as Facebook, Instagram, TikTok, or e-commerce platforms has become an essential strategy to remain competitive and boost revenue.

One of the standout trends in e-commerce is the rapid growth of live-streamed sales. Creative live-stream sessions, combined with interactive mini-games, can increase viewership by up to 35%, yielding better results compared to traditional product introductions. Coupled with fast and accurate shipping services, sellers can optimize the customer experience, thereby increasing satisfaction and loyalty.

Ms. Le Thi Nga, Director of Sapo Social Commerce & Shipping, affirmed, "Live-streaming not only increases interaction rates but also helps sellers reach customers directly and quickly, offering substantial sales opportunities, especially during holiday seasons."

However, only 34% of sellers in Sapo’s survey have participated in live-streaming. Many small and medium-sized stores still lack confidence in how to operate or do not have the resources to execute effective live-stream sessions. This indicates that while live-streaming holds significant potential, it also requires sellers to invest carefully in technology and creative content.

Competitive pressure and rising costs

Despite achieving impressive results, e-commerce in Vietnam is facing increasingly fierce competition from international platforms such as Taobao, Alibaba, and other global giants. The presence of these behemoths not only increases the level of competition but also places pressure on local businesses, especially when it comes to lowering prices and optimizing costs.

At the same time, platform fees and taxes are rising, increasing operational costs for businesses. Therefore, optimizing costs, particularly advertising and logistics expenses, is crucial for online retailers.

Nevertheless, sellers must not only compete on price but also develop sustainable business strategies aimed at increasing long-term value. Instead of solely focusing on price-cutting strategies, sellers should enhance product quality, improve customer service, and optimize advertising strategies.

To survive and thrive in the highly competitive e-commerce market, retailers and distributors need to prioritize investments in technologies suited to their scale and financial capabilities. Adopting technology helps optimize business processes, from advertising to sales and delivery, offering substantial benefits in cost savings and operational efficiency.

Moreover, strategies to improve the customer experience also play a key role in maintaining customer loyalty and increasing shopping frequency. Customer care programs that target specific needs and preferences can help differentiate sellers and increase the likelihood of converting viewers into buyers.

Thus, e-commerce will continue to be a powerful distribution channel in 2025 and beyond. However, with pressure from international competitors, rising costs, and fierce competition, businesses must focus on optimizing technology, enhancing the customer experience, and developing sustainable business strategies to maintain profitability and solidify their position in this promising market.

Nhan Ha