Customers prefer to have goods delivered to their doorstep, rather than going outside and risking infection.
Smartphones are the most popular device for going online, with two-thirds of people (66%) accessing the internet on their handset.
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Vietnam’s e-commerce sector continued to grow during COVID-19, according to new data from YouGov. But there was significant variation in consumer behaviour, with notable differences in spending across platforms and categories. Meanwhile, social distancing is accelerating the trend toward cashless transactions. This opens up huge opportunities for companies in the e-wallet space.
Now, with Vietnam in the midst of a fourth Covid-19 wave, brands need to understand how the pandemic has changed consumer behaviour in order to best respond to new customer demands.
How has the pandemic changed consumer spending?
First, e-commerce outperforms traditional bricks-and-mortar retail in a pandemic. Customers prefer to have goods delivered to their doorstep, rather than going outside and risking infection. YouGov’s data shows that almost half of consumers (43%) spent less in stores during previous waves of the outbreak, compared to around a third (36%) who spent less online.
Second, brands who want to connect with consumers in Vietnam need to optimize their offer for mobile. Smartphones are the most popular device for going online, with two-thirds of people (66%) accessing the internet on their handset. That makes mobile consumers an attractive audience for online retailers.
Third, the data shows that e-commerce spending spikes during a pandemic. In previous outbreaks as lockdowns forced shops to close and people to spend more time at home, around a third (32%) of consumers spent more online. But this trend is not the same across the board.
The fastest-growing segment was groceries, with other items such as appliances and electrical goods seeing a fall in sales. So a new wave would be a good time for brands to launch fresh-food promotions and pause campaigns promoting other, non-essential goods.
Last, but not least, COVID-19 has made cashless transactions more popular with consumers. In doing so, it has opened up huge opportunities for e-wallet platforms. Before the pandemic hit, close to 90% of Vietnamese customers preferred cash-on-delivery when ordering online.
However, more than half of people (51%) reported using cash less often since the outbreak. And almost two-thirds (60%) now feel more positive about going cashless. This could accelerate growth in the number of customers using e-wallets even after the pandemic is under control.
Go where the customers are
Brands need to target their marketing campaigns with an in-depth knowledge of consumers and their online preferences. In Vietnam, that means recognising the urban nature of online retail.
Three-quarters (74%) of new customers come from towns and cities. And the most popular e-commerce platforms are ‘marketplaces’ like Shopee, Lazada, and Tiki. These companies take up a huge slice of total market share: Close to half of all consumers use Shopee (48%), with almost one third (28%) using Lazada and around one fifth (19%) using Tiki.
However, brands looking to target rural consumers need to readjust their marketing budget and invest more in social commerce. Using social networking sites to search for and sell products is more popular outside major cities, with the proportion of people using Facebook for e-commerce rising from 13% in urban areas to 18% in rural regions. Likewise, ‘marketplace’ platforms are less popular for rural consumers, while still dominating the e-commerce space overall.
Commenting on the data, Thue Quist Thomasen, CEO of YouGov Vietnam, said:
“Vietnam is now in the midst of a fourth wave outbreak. And this has big implications for companies looking to connect with consumers spending more time at home and more cash online. We know that – overall – e-commerce spending rises when cities are in lockdown. But this is not true for all categories and there will be both winners and losers.
“It is clear that COVID-19 will be with us for some time, and this will have inevitable impacts on consumer behaviour for the foreseeable future. So brands need to adapt to these changes and learn the lessons from previous outbreaks. That’s why YouGov has investigated the biggest e-commerce trends of COVID-19 in Vietnam. Our new data gives invaluable insights into potential growth markets, like e-wallets, as well as where campaigns should be targeted.
“Vietnam’s e-commerce sector was growing even before the pandemic hit. Now, with lockdowns and social distancing making online retail more popular, it is predicted to record double-digit growth even after COVID-19. So, now is the time for brands to invest in their e-commerce strategies and online campaigns.
“To grab these new opportunities, brands need to use data-rich insights to optimize their future outreach; to ensure that their campaigns speak to consumers and respond to their needs. This requires platforms that track fast-moving customer behaviour and tools which give in-depth insights into the Vietnamese consumer, their attitudes and spending habits.”