The Vietnamese government revealed on May 18 that it was aiming for double-digit annual growth over the next five years, reported Reuters.
According to the government’s e-commerce development strategy, it expects more than half of Vietnam’s population of 96 million people will be shopping online by 2025.
By then, Vietnam predicts that its e-commerce could be worth US$35bn.
In the past few months, online shopping in Vietnam saw a spike due to the COVID-19 outbreak.
According to Kantar, online FMCG spend accelerated by triple-digits just a month after the official announcement that COVID-19 had reached its shores.
The news that the local government plans to focus on e-commerce development comes as good news for companies like G&M Cosmetics.
The Australian cosmetics and personal care manufacturer has been reinforcing its online position in Vietnam for the past year or so.
While Vietnam is not growing as fast compared to its other Asian markets, it is still a crucial space for the company.
“It's probably one of the markets that have given us opportunities to present all our brands – mass market or premium – in the market whereas in some markets, its takes longer to put all the brands in the market,” said Peter Bosevski, global marketing and sales manager, G&M Cosmetics.
The maker of brands such as Australian Creams and Native Australian entered the market almost three years ago and through traditional physical retail channels but has since shifted its strategy to focus more on the online business.
Six months ago, the company expanded its reach online through e-commerce platform Shopee after launching on Tiki and Orchard.
Today, 90% of the firm’s business in Vietnam takes place online and it is eyeing more opportunities for growth in the market.
As such, the firm is planning to launch more of its brands into the market.
“There's still more room for online business in Vietnam. We want to expand and put more brands on Shopee and Tiki,” said Bosevski.
The company is also looking to build an online flagship presence via South East Asian e-commerce company Lazada.
“In the last six months, we've been rolling out some new brands and products. We want to put them under one banner, so the plan is to make Lazada the flagship of G&M. That way consumers are more aware that these brands are produced by G&M,” said Bosevski.
Bosevski told CosmeticsDesign-Asia that the company’s online strategy has proven to be very effective in helping it enter new markets in the long-term.
“The online channels have helped us not just in Vietnam but every other market we've been opening up in the last few years. When we open up an online channel, it sends out a message to consumers that we are present and it’s helping to set the second stage of our business into offline retail,” he explained.
Bosevski elaborated that the company still continues to see opportunities in the brick-and-mortar retail channel.
“We're not moving away from the offline model because there's still room for growth for the supermarket chains, pharmacies – these channels are a good fit for our products as well. The offline expansion plans are the next stage for 2020 to 2021 and we’re looking for partners and distributors in those channels.”
Despite COVID-19, the firm is expecting to see growth in Vietnam this year, said Bosevski.
“[The market] has stabilised over the last three months. Leading into the last half of the year and working towards Tết – the Vietnamese new year – when we always see a spike so we are confident we are going to see more growth. Especially since we are introducing more brands into the market.”