Overview of Vietnam’s B2B e-commerce market

The Covid-19 pandemic has helped propel the omnichannel commerce industry which focuses on providing a seamless experience for customers, whether they're shopping online from a mobile device, computer or at a traditional store.


Growth of Vietnam’s e-commerce market


According to the Vietnam E-commerce White Paper released by the Vietnam Department of E-commerce and Digital Economy, Vietnam's e-commerce industry achieved a growth rate of 18% in 2020 with a scale of 11.8 billion USD.


Vietnam is expected to become the fastest growing e-commerce market in Southeast Asia, with a gross merchandise value (GMV) expected to be 56 billion USD by 2026.


B2B Ecommerce, an e-commerce business model in which FMCG products are distributed through shopping apps, is a new trend in Southeast Asia, typically Amazon, Flipkart, TataCliq in India; Tokopedia in Indonesia; Vinshop, Kilo, Loship and Telio in Vietnam.


There is a great deal of potential for these businesses to grow, which is partly due to the very low rate of modern commercial market penetration in most Southeast Asian economies. Along with that, the level of digitization of traditional distribution networks is currently relatively low (small retail stores in Vietnam, Kiranas in India, etc.).


Unlike B2C, B2B buyers normally offer bulk order value. They will buy hundreds, even thousands of items in one transaction. The average value of a B2B transaction, according to Forrester's calculation, is about 491 USD, compared to the rather small amount of 147 USD of the B2C model.


While B2C transactions pose a large cancellation risk, B2B sellers have 3 times higher conversion rates. In addition to providing a better customer experience, the advantage of e-commerce when applied to B2B is the efficiency in managing and controlling several supplier relationships at the same time.


Although the e-B2B market is relatively new in Vietnam (worth under 150 million USD in 2020), the urban and digital logistics solutions deployed by e-B2B businesses have represented a significant turning point in the long-term transformation of urban distribution networks.


This is especially true for Vietnam, which has the highest share of non-organised retail channels among ASEAN countries, at 88% (in the FMCG category) with online sales accounting for less than 1% of FMCG sales of the whole country.


Top B2B-ecommerce businesses in Vietnam


VinShop is one of the leading companies in Vietnam’s e-B2B market last year, marking the transformation of thousands of grocery stores.


Maybe shopping online is too familiar to many young people, but for about 80,000 grocery store owners associated with VinShop, it would be a new experience. This is a big revolution in the traditional retail industry.


Currently, VinShop is supplying more than 2,000 items on the application in 15 provinces and cities, becoming one of the largest distributors of consumer goods in Vietnam.


In addition to VinShop, Telio, a B2B e-commerce platform invested by VNG is also a good example.


In the past time, Telio has made efforts to expand in 26 provinces and cities across the country, including Hanoi, Ho Chi Minh City, Hai Phong, Da Nang, Hai Duong, Thanh Hoa, Nam Dinh, Thai Binh, Khanh Hoa, Lam Dong, Dak Lak, Quang Nam, Quang Ngai, Hue, Can Tho, etc.


Telio expects this investment will contribute to improving the service capacity of the company in its strategy of being present in 30 provinces and cities; serving more than 60,000 resellers. At the same time, it aims to be present in 45 provinces and cities in Vietnam with 150,000 agents by the end of 2022.


In addition to the goal of promoting non-cash payment solutions, the cooperation between VNG and Telio also gives small and medium-sized businesses the opportunity to access financial and credit products.


Another business is Kilo, founded in 2020 by Mr. Kartick Narayan - former CMO of Groupon, Vice President of Coupang and Sales Director of Tiki, which helps connect wholesalers with micro, small and medium enterprises.


With the platform and tools available, Kilo allows partners to manage businesses across multiple sales channels, such as Kilo, Facebook and Zalo apps, and optimize inventory turnover to save costs and reduce risk in the long run.


In the field of F&B, Losupply - a new service of Loship is also targeting the B2B e-commerce segment in delivering wholesale materials to restaurants, bars, as well as food and beverage shops. Currently, Losupply is providing a lot of products such as plastic boxes, foam boxes, plastic cups, takeout bags, spoons and chopsticks, or ingredients for preparation.


Losupply imports goods directly from the manufacturer, eliminating the intermediaries involved in product pricing, bringing convenience and the best ordering experience to store owners.


By applying technology, Losupply helps store owners easily search, select products and order online anytime, anywhere, and access a variety of different items through just one app.



Source: VietnamCredit

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