Background
My company was originally planning to set up an e-commerce business in Vietnam. I did some research online, and since I happened to be traveling to Vietnam for New Year's, I took some notes.
Culture
Vietnam was colonized by France (for 100 years) and Japan (for 5 years). The primary languages are Vietnamese and English. The culture is deeply influenced by France. It was also colonized by China during the Qin and Han dynasties, and many buildings and temples with Chinese cultural influences have been preserved.
Vietnam is a matriarchal society. If you observe closely, Vietnamese women are more proactive than men. The men tend to be more laid-back (chill). When they have nothing to do at work, they'll pull up a stool, sit on the street, and chat over coffee.
There are also many restrictions on foreign investment. I've heard that work efficiency is on the lower side, and people enjoy chatting during work hours. Some factories that moved to Vietnam have since relocated to Thailand.
Market Size
Vietnam's per capita GDP in 2023 was US245. However, the population is over 90 million, with a fertility rate close to 2. What's particularly interesting is that Vietnamese universities produce 80,000 IT-related graduates annually, which is twice the number in Taiwan. Vietnam is one of the top 3 software outsourcing countries globally. The monthly salary for software professionals is US800 for new graduates in rural areas), which is quickly approaching Taiwan's levels.
Consumer Habits
There's a lack of trust in e-commerce, and credit card penetration is low. The quality of sellers varies greatly, and people are afraid they won't be able to return items. As a result, cash on delivery (COD) is preferred. This allows customers to open and inspect the package upon arrival and refuse it immediately if it's not right. However, the rate of uncollected packages is high. Sometimes, by the time the package arrives, the money set aside for it has already been spent. There are many motorcycle-based logistics services, and small items often get crushed when packed tightly, leaving merchants with no recourse for compensation.
Internet Speed
Most of Vietnam is still on 4G networks. The Viettel SIM card we bought felt super slow; the connection often lagged, and web pages loaded slowly. Even the hotel's WIFI felt sluggish.
Inaccessible Popular Websites
Many popular Vietnamese websites, like thegioididong.com, are inaccessible from abroad. I could access it while I was in Vietnam, though. After some analysis, I found it was a domain resolution issue; Cloudflare, Google, and Chunghwa Telecom's DNS servers were all unable to resolve it.
Online Payments
- Payment gateways: ayoo, vnpay, vtcpay, etc.
- E-wallets: Momo, Smartpay, Airpay, Zalopay, Payoo
- Online banking, transfer apps
- Payment service provider Adyen
Physical Payments
Despite high inflation, most physical payments are still made with Vietnamese Dong in cash. However, there are money exchange shops everywhere. Only larger merchants accept Visa, and they usually add a 3% surcharge.
Communication Apps
Zalo is the equivalent of Taiwan's LINE and has a very high market share in Vietnam.
Number Formatting
Vietnamese websites use a period as the thousands separator. Ex: 111.235.03
Transportation
City traffic is quite chaotic. In Hanoi, traffic lights are more of a suggestion. You have to be bold when crossing the street. The sound of motorcycle horns is constant, much like Taiwan in the early days or Thailand a decade ago.
The commonly used ride-hailing app is Grab, with motorcycles being the most common vehicle type.
Cost of Living
Prices are relatively low. You can eat at restaurants all day. A coconut costs around 38-48 TWD. A simple coffee can be had for about 50 TWD. The coconut coffee is definitely worth trying. A meal at a pho restaurant is about 90 TWD.
There is a tipping culture, but they are incredibly happy to receive a tip of 2-5 US dollars.
I didn't see many places selling computers or any computer malls. There were quite a few phone shops, though. Many shopkeepers just scroll through their phones when they have nothing to do.
Local Specialties
Coffee, chocolate, nuts.
Logistics
The Vietnamese e-commerce logistics market has many major players. Here are some of the most commonly used e-commerce logistics services in Vietnam:
- Giao Hàng Nhanh (GHN): This is a very popular e-commerce logistics company in Vietnam, known for its fast same-city and inter-city delivery services.
- Giao Hàng Tiết Kiệm (GHTK): Another very popular e-commerce logistics company in Vietnam, primarily offering real-time delivery services for the e-commerce market.
- Vietnam Post: Vietnam's state-owned postal service also offers e-commerce logistics services, with a network covering the entire country.
- Viettel Post: This is a subsidiary of Viettel, Vietnam's largest telecommunications company, offering a wide range of express and logistics services.
- J&T Express: This is an international e-commerce logistics company with extensive operations in Vietnam.
- Ninja Van: A Singaporean courier company whose service area includes Vietnam.
- Lazada eLogistics (LEL): This is the logistics arm of the e-commerce platform Lazada, providing logistics services for merchants and consumers.
- Shopee Express: Similar to LEL, this is the logistics service of the e-commerce platform Shopee.
Competitor Websites
Conclusion
From a systems perspective, we could adapt a German system. However, Vietnam is still a developing country. With a relatively low per capita income, I'm not sure if computers priced at US$1,500-2,000 would sell. This requires more thorough market research or experimentation.
On a Side Note
A colleague who studied in Canada shared that in Quebec, Canada, a piece of land was given to the French who helped Canada in a war. As a result, most people there only speak French, not English.
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