Vietnam and Southeast Asia: Making a breakthrough in digital transformation
Southeast Asia is considered a leading region in digital transformation. According to a report by SYNC Southeast Asia, by the end of 2022, there will be 350 million digital consumers (who are over 15 years old), accounting to 80% of consumers across the region.
Khoi Le, Head of Business and Solutions for Facebook Vietnam, said that in Southeast Asia, nearly 100 million people have switched to digital consumption due to the impact of the pandemic in 2020-2021. In Vietnam alone, it is estimated that about 53 million Vietnamese people have switched to digital in the past two years.
The above figures are the springboard for the explosive growth of the e-commerce market in Southeast Asia, with the number of transactions growing by 1.4 times compared to previous years. E-commerce sales are expected to double by the end of 2026, equivalent to about $250 billion.
In Vietnam, e-commerce sales in 2021 also increased by 50% compared to the same period of last year. The Vietnamese market is also predicted to have the strongest growth in the region — by 4.5 times within the next 5 years, corresponding to 56 billion USD by the end of 2026.
These figures prove the strong development of the Southeast Asian market. With these evident changes in consumer behavior, Le said brands need to consider all the digital touchpoints that customers are likely to interact with during their online purchase.
According to Le, social media serves as a bridge that helps brands reach the right customers. With the rapid pace of digital transformation, the problem here is no longer attracting but retaining customers and increasing the conversion rate.
E-commerce market in 2021: Essential commodities grew by 15-20 times
Khanh Ngo, Group Vice President at Tiki Corporation, shared that digital consumers have been open to buying more products during the pandemic. Essential commodities such as household goods, food, and fresh food on e-commerce platforms also grew by 15-20 times compared to pre-lockdown. This has forced businesses to solve a big problem in the supply chain to promptly meet the needs of customers during the pandemic.
When shopping demand increases, the shopping experience cannot be limited to one or a few simple ways as before. With Tiki, the percentage of customers choosing COD (cash on delivery) payment methods has decreased significantly. On the other hand, cashless payments recorded a massive growth from 30 to 40%, and even peaked at 90%.
Le added that this is the first time the country has witnessed a decrease in the use of cash for payments in the Vietnamese market (from 60% to 42%). The trend will only go up from here, and e-wallets will be the popular choice of payment method in the near future.
Moreover, the demand for express delivery or installation services is the reason that Tiki started implementing customer-oriented services. Providing value-added services to customers — in addition to basic transaction features — has now become a new competitive arena for many e-commerce platforms.
‘Digital-first’ — The direction that businesses need to consider
Khanh Ngo shared that when businesses can no longer go against the digital economy trend, they need to come up with new strategies to meet the rapidly changing needs of consumers. To implement digitized business models, enterprises need to focus on customer care activities and improve service quality.
Moreover, the recent pandemic has proven that businesses need a flexible, multi-channel model to counter the risks of unpredictable circumstances like COVID-19. As Head of Business and Solutions for Facebook, Le suggests a few business models combining online and offline, taking advantage of e-commerce, or using social networking channels to promote and sell products.
He further emphasized that with the changing consumer behavior, businesses need to focus on developing valuable relationships with their customers, which will eventually be the “anchor” that holds customers no matter how the technology evolves.
Adapted by Thao Van