To prepare for the biggest annual holiday Tet, Thu Ha in Hanoi bought most items online.
“Aside from fresh meat, vegetables, and flowers, which I prefer to buy in person for the festive atmosphere, I get everything else through e-commerce,” she said.
Her purchase of a VND800,000 (US$31.90) ao dai (a traditional Vietnamese dress) contributed to the VND190 billion in ao dai sales recorded on Shopee and TikTok Shop in the four weeks leading up to Jan. 19, according to e-commerce data firm Metric.
In the last quarter of 2024 alone over 8 million ao dai orders and two million Lunar New Year gift baskets were sold on Shopee.
TikTok Shop also recorded strong holiday shopping demand with 100,000 hours of livestreaming, attracting 2.9 billion views in the first half of this month.
Its two biggest livestream sale sessions broke records with 400,000 orders placed.
“Tet shopping through e-commerce has become second nature for many Vietnamese consumers,” said Nguyen Ngo, marketing manager of TikTok Shop Vietnam.
Explosive growths
Vietnam’s e-commerce boomed in 2024 with sales of the four biggest platforms – Shopee, Lazada, TikTok Shop and Tiki – growing by a record of 40% to $13.8 billion.
The Department of e-Commerce and Digital Economy estimated the overall e-commerce market size surpassed $25 billion, a 20% growth, exceeding Google and its partners’ earlier forecast of $22 billion in their “e-Economy SEA 2024” report.
The growth was fueled by fierce competition among e-commerce platforms, offering attractive discounts, and entertainment-driven shopping methods that align with Vietnamese consumers’ evolving shopping habits.
Shopee and TikTok Shop led the market, with gross merchandise value reaching $9.3 billion and $3.8 billion, respectively, capturing 66.7% and 26.9% of market share.
Shopee sales grew by 41%, while TikTok Shop surged by an astonishing 99%.
This exponential growth from these two platforms pushed Vietnam’s e-commerce sector to exceed all early 2024 forecasts, according to data provider YouNet ECI.
A key driver of this surge was the strategic combination of discount incentives and entertainment-driven shopping (shoppertainment) through livestream sales and video commerce.
Shopee reported that consumers saved a total of VND16 trillion thanks to free shipping vouchers in 2024. Meanwhile, Shopee users spent 260 million hours watching shopping-related content.
TikTok Shop, meanwhile, leveraged livestream commerce as its primary growth engine.
On Dec. 12 alone, the top 200 TikTok Shop sellers broadcast nearly 1,000 hours of livestreams, attracting 54 million views, data from livestream data analyzer Stickler shows.
Local businesses also joined the trend.
Fruit exporter Chanh Thu recently showcased frozen 5-star durians from the Mekong Delta province of Ben Tre on online platforms, while another exporter, Vua Tom Kho Ca Mau, saw sales tripling in the three months leading to Tet.
Vietnam has emerged as Southeast Asia’s third-largest live commerce market, according to digital marketing consultancy Veena Media.
“Local brands are increasingly entering the livestream commerce space, leaving their mark on the industry,” said Thuy Pham, CEO of the firm.
Beyond festive shopping, Vietnamese consumers are increasingly turning to e-commerce for daily essentials, driving the sector’s growth far beyond the 9% expansion seen in the traditional retail industry last year, according to the General Statistics Office.
YouNet ECI reported a 54% growth in gross merchandise value for essential goods, while the fast-moving consumer goods sector – typically dominated by supermarkets and local grocery stores – grew 62%, surpassing consumer electronics to become the second-largest online shopping category after fashion and accessories.
Importantly, fast-moving consumer goods revenue growth was driven more by higher sales volume rather than price hikes, signaling that Vietnamese consumers are increasingly comfortable buying daily necessities online, said Nguyen Phuong Lam, market analysis director at YouNet ECI.
“The convenience, attractive promotions, and wide product selection have reshaped consumer shopping behaviors,” he said.
Competitive future
The “e-Economy SEA 2024” report forecasts that Vietnam’s e-commerce market could reach $63 billion by 2030, with an annual growth rate of approximately 19%.
Pham Trong Chinh, market expert at the High-Quality Vietnamese Goods Association, is optimistic about Vietnam’s online retail sector.
“E-commerce growth at 15-20% per year is completely realistic, making it one of the most promising sectors,” he said.
This double-digit growth potential is fueling intense competition.
In November 2024, YouTube expanded into e-commerce in Vietnam, allowing content creators with more than 10,000 subscribers to tag Shopee products in their videos.
The YouTube Shopping Affiliate program offers commissions on purchases made through these links, marking YouTube’s deeper push into Vietnamese e-commerce.
YouTube considers its shopping initiative a core focus for,” said Mukpim Anantachai, head of YouTube partnerships for Vietnam and Thailand.
Vietnam was chosen as one of the first six countries for the program, alongside the U.S., South Korea, Indonesia, Thailand, and India.
Another new player was China’s Temu, which began selling in Vietnam in October, offering low prices, free shipping, and high affiliate marketing commissions.
However, its rise was quickly halted when the Ministry of Industry and Trade required it to register for business operations in Vietnam.
By December, Temu’s Vietnamese-language app was suspended, though the English version remained available. Whether Temu will completely exit the Vietnamese market remains uncertain.
Despite Temu’s aggressive pricing, Vietnamese consumers found its prices similar to local platforms.
“Western consumers were shocked by Temu’s low prices, but in Southeast Asia, where Chinese supply chains are closer, prices have always been competitive,” Chinh said.
With price wars no longer a priority, the next battleground will be logistics, entertainment-driven shopping, and affiliate marketing.
Shopee and TikTok Shop are aggressively expanding free shipping incentives, while Shopee’s partnership with YouTube could intensify competition in affiliate marketing.
“To build a strong and sustainable presence, brands must invest in product quality, innovative content strategies, and cutting-edge technology,” said Thuy Pham of Veena Media.
The government’s recent decision to scrap a policy which exempts value-added tax for low-value imported goods sold via express delivery is believed to help boost the competitiveness of domestic players.
“The removal of the tax exemption aims to ensure fairness and encourage the consumption of domestically produced goods,” the Ministry of Finance said.
