E-commerce industry in the global market continues to evolve and experience high growth in both developed and developing markets. Appearance of various local/ non-banking players in the online payment gateways market has also witnessed growth at a rapid pace. Being a country with a population of over 90 million, Vietnam is one of the Asia’s unexplored markets in terms of the potential in holds in E-Commerce. In the past decade, E-commerce was able to took over the world but Vietnam remained more or less alienated from that trend and it was only recently with the start of this decade that it managed to gain some attention in Vietnam, only after 2011. Vietnamese are slow adapters of new technology and primarily rely and trust conventional ways for doing things.
Vietnam B2C E-Commerce market has been segmented into: Vietnam Online Retail market, Vietnam Online travel market and Vietnam Online Entertainment & Services booking market. During 2011-2014, the online retail market accounted for majority of the revenue of the overall GMV generated by Vietnam E-commerce market. . The incline in share can be attributed to consumer’s preference of buying clothes and electronics online as compared to many other products. Online Travel market including categories such as hotel & travel booking, air ticketing and food has been the second major contributor to the overall E-commerce market. Online Entertainment & Services booking market has been the contributed 9.6% of the overall E-commerce market GMV in 2014.
Banks are expected to offer several value-added services through their electronic channels such as tax collections, trading, bill payments and others. Additionally, internet banking enables customers to process diverse transactions with ease. They can view transaction details, transfer funds, pay bills as well as make purchases. Internet banking will further reduce the costs per transactions of banks. Thus with the increase in the usage of online payment instrument, the market for online payment gateway will increase. The online payment gateway market has increased at an annual rate of 45.2% during 2013-2014.
Vietnam online payment gateways market has been segmented on the basis of different modes of payment into electronic wallet, bank transfer, mobile cards and payable cards. In 2014, E-wallet accounted Majority of the overall payments made through online gateways. The dominance of e wallet in online payment gateways market can be attributed to the fact the E-wallet offers facility of worldwide access to people and thus facilitate online payments. The second major payment gateways used for making online payments were Bank transfers
Online Retail market of Vietnam has been mainly used by working population and youngsters which enjoy online shopping in the country. In order to establish an online retail store in the country firms need to collect information regarding various aspects of the market such as consumer preference, driving forces, payment mechanism and others. Online E-commerce market in Vietnam has enhanced in the past few years with more than 20.5 million online shoppers in the country in 2014. Vietnam is expected to have a rise in internet population for the purpose of Online Retailing. People in Vietnam are risk-averse and late adopters of new products and technology.
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