Micro, Small, and Medium Enterprises (MSMEs) in Vietnam are in a prime position to reap significant benefits from the rapid growth of the e-commerce sector. Mainly driven by the restrictions due to the COVID-19 pandemic, the global acceleration in the use of e-commerce also provides an opportunity for Vietnam to tap into the demand in foreign markets with its policy environment conducive for e-commerce exports.
Currently, business-to-consumer (B2C) e-commerce exports in Vietnam are valued at VND80.7 trillion (USD3.5 billion). However, our analysis reveals that if MSMEs accelerate their adoption of e-commerce for exporting products and services, Vietnam could witness a substantial surge in e-commerce export revenues, reaching VND296.3 trillion (USD13 billion) by 2027. Moreover, the proportion of revenues earned by MSMEs could rise from 24% in 2022 to 67% in 2027.
Our survey among 300 Vietnamese MSMEs found that 86% believe that without e-commerce, they would be unable to export. MSMEs also value the scale and reach that international e-commerce services have which helps increase their access to a large group of global consumers in many different countries.
Despite the recent reopening of brick-and-mortar stores due to relaxation in COVID-19 restrictions, MSMEs still believe that demand for online shopping will continue to provide significant opportunities in their export abroad. Without barriers to the use of e-commerce for export, 95% of the surveyed MSMEs still expect to see an annual increase of at least 10% in B2C e-commerce exports over the next five years.
Most MSMEs in Vietnam currently export to the rest of Southeast Asia and China and continue to see these as their two largest export destination countries in the future. However, Japan, the United States, and the European Union feature more prominently in MSMEs priorities over the next five years. E-commerce consumers in key western countries also reveal through a survey that there is an opportunity for Vietnam’s MSMEs to serve a demand for goods via e-commerce, with both the frequency of purchases and average spending rising since 2020.
Nevertheless, MSMEs face challenges, including the imposition of substantial customs duties on online trades in foreign countries and the high costs associated with cross-border logistics. To fully leverage the benefits of the e-commerce export opportunity, greater regulatory support and financial assistance can be provided to Vietnamese MSMEs. Measures such as establishing cross-border e-commerce trade zones and offering financial grants for exports and e-commerce can play a pivotal role in facilitating their efforts to internationalise.
Please note that the report is only available in Vietnamese. Download the report to find out more.
