The next phase of online retail and shopping
Direct-to-consumer sales, particularly subscriptions, could be the next phase of online shopping in Vietnam as the model sees a wave of investment from major companies worldwide.
Kantar Worldpanel is forecasting that big bets will be placed on the near future in hybrid retail and super-convenience. In Vietnam, we may well see the rise of social commerce and direct-to-consumer sales. The concept of social commerce is the platform where everyone can be a retailer by opening an online store and shoppers can make payments in different ways, either by cash on delivery or via a digital wallet.
Intelligent technology is also a major factor applied in the retail segment. The omnichannel trend will be evolving fast with new retail developing, aided by the advancement of new technology. As a result, the shopper’s path to purchase becomes even more sophisticated and complex. This is amplified by different factors like marketing embedded AI and machine learning technology, the evolution of shipping services, and the continued rise of cashless payments.
In general, online, mini, and specialty stores will continue to lead future growth. There is still huge potential for these emerging channels to growth further in both shopper base, shopping trips, and shopper spend, especially online.
Around 60% of urban Vietnamese households will shop for fast-moving consumer goods (FMCG) online by 2025. As such, the future growth of e-commerce will be continuously driven by growing connectivity, especially via mobile phones. From our latest data updated to the end of last year, up to 95% of urban households now own at least one smartphone.
The second driver is consumers’ active engagement with digital platforms, which nurture mobile shopping from consumer-to-consumer and business-to-consumer. The third is the strong push from both pure players and third parties like delivery apps with lots of promotion campaigns stimulating consumer spending online.
However, online methods will not completely replace physical stores in the next decade. Consumers do not just move from channel to channel. They have a growing tendency to shop for FMCG products across a wider variety of channels to serve different shopping missions. Simply put, they will visit mother and child stores for shopping for baby products and might prefer to shop for imported instant noodles in mini stores or hypermarkets rather than in a nearby street shop.
In addition, we are seeing another rising shopping trend when life gets busy. Shoppers actually shop less often and want to save time by reducing their trips.
Therefore, there will be fewer opportunities for brands and retailers to win the moment of truth.
To respond to today’s new retail environment and to prepare for tomorrow’s transformation, key retailers are taking the lead in establishing a variety of retail formats in order to meet shoppers wherever they are.
In the next five years, this will revolve around super convenience, customisation, ultra-fast delivery times, meaningfulness, and trust.
On top of that, tech-based innovations are promising to bring shoppers greater convenience, and a seamless and personalised experience. Some relevant applications to watch out for in Vietnamese retail could be unmanned stores, scan and go, click and collect with pick-up points, mobile formats, or kiosks with voice assistants.