In an attempt to boost e-commerce, Vietnam is trying to convince 50 percent of urban residents to convert to non-cash payments such as debit and credit cards.
Vietnam expects revenue from online retail to hit $10 billion by 2020, accounting for 5 percent of the total nationwide revenue from sales of goods and services, according to the governmentâ€™s e-commerce development plan for 2016-2020.
The Southeast Asian country forecasts a rapidly growing demand for online shopping, and projects 30 percent of the population will buy goods and services directly over the internet in 2020, with each shopper spending an average of $350 per year.
Last year, Vietnamese consumers spent $4.07 billion shopping online, a jump of 37 percent from the previous year, according to the 2015 Report on Vietnam E-commerce. Revenue from online retail accounted for 2.8 percent of the total nationwide revenue from sales of goods and services, said the Vietnam E-Commerce and Information Technology Agency (VECITA) under the Ministry of Industry and Trade.
The Southeast Asian country, with a population of 93 million, just three years ago was ranked as the smallest e-commerce market in the region in terms of sales. Now online retail is gaining momentum with 48 million internet users increasingly turning to online shopping.
VECITA estimated that if 70 percent of Vietnamese internet users shopped online it would create annual revenue of about $4.3 billion. Each Vietnamese consumer spent an average of $160 on online purchases in 2015. Clothing, footwear and cosmetics were the best selling items, followed by technology and electronic goods, household appliances, and audio-visual equipment.
In order to increase non-cash transactions, Vietnam will require all supermarkets, shopping malls and convenience stores to accept payments via credit and debit cards. â€œThe target of 50 per cent of people switching from cash will be very hard to achieve because of poor infrastructure, limited legal framework, cash habit, and [the fact that] some shops charge a fee if customers pay by card,â€ said banking expert Huynh Trung Minh.
Official statistics released by the Vietnam Banking Card Association showed that Vietnamese banks had issued about 82 million cards by the end of 2015, but 90 percent of them were ATM cards.
The E-commerce Index report showed that last year 27 percent of smartphone users shopped online on their phones and mostly made non-cash payments, while 45 percent of smartphone users browsed through online shopping websites more than once a day.
However, only 15 percent of Vietnamese shopping portals have mobile platforms to meet the demands of the 11.3 million people in the country who use mobile devices to shop online, according to Nguyen Dinh Thanh, deputy chairman of the Vietnam Computer Association. "E-commerce businesses have not paid enough attention to mobile commerce," said Thang.
Vietnam also wants around 70 percent of utility service providers including telecommunications companies and electricity and water suppliers to move their billings online.
The Vietnamese government expects to start rolling out the electronic government procurement system in 2018 in which all businesses looking to work with government bodies, mainly at a ministerial level, will have to go online to qualify. The country has set a target of moving all government procurement online by 2025.