A multi-billion dollar industry set to enter the top 5 largest export markets in Vietnam: USA and Japan could be major clients.

The industry has the potential to reach $12 billion by 2027, making it the fifth largest export industry in Vietnam.

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This is the information forecasted in the “2023 Activity Report: Empowering Small and Medium Enterprises in Vietnam” by Amazon Global Selling Vietnam, which has just been published on February 2. The sector that Amazon believes has the potential to become the 5th largest export sector in Vietnam in the next 5 years is Online Retail E-commerce (B2C).

According to the report, it highlights two development possibilities for cross-border e-commerce exports by 2027.

Specifically, under the normal scenario, the export turnover of this sector can reach 5 billion USD. Meanwhile, for the high scenario, Vietnamese small, medium, and micro enterprises will be supported and online export can reach 12 billion USD by 2027, which is 2.4 times higher than the normal scenario. Especially in the high scenario, online retail e-commerce will become the 5th largest export sector of Vietnam.

Many Vietnamese products have been sold on Amazon. Image: MOIT

According to statistics from the General Statistics Office, in 2023, Vietnam’s total export turnover reached nearly 356 billion USD. In which, 5 groups of industries with export turnover of over 20 billion USD include electronics – computers and components, phones and components, machinery and equipment, textiles – garments and agriculture – forestry, seafood.

According to Amazon Global Selling’s assessment, Vietnamese goods have the opportunity to increase online exports when global consumption continues to shift from offline to online. According to Amazon, the estimated scale of the online retail market in 2024 is over 31.3 billion USD, accounting for about 13% of global retail. In the next 5 years, this figure will increase to over 40.5 billion USD, equivalent to 15% of global consumption.

The report also states that, in one year (until August 31, 2023), Vietnamese retailers have sold more than 17 million products on Amazon, which is a 50% increase compared to the same period in 2022. In addition, the number of Vietnamese sellers on this world’s largest e-commerce platform also increased by 40%.

The report also suggests that the rise of emerging sectors such as health, personal care, and beauty contributes to the expanding online export landscape of Vietnam. Evidence is that in 2023, the number of Vietnamese sellers with revenue exceeding 100,000 USD (over 2.4 billion VND) on Amazon increased by 70%.

Opportunities for Vietnamese businesses

These are the top 5 best-selling categories of Vietnamese sellers on Amazon. Image: Amazon Global Selling Vietnam

In reality, the two main export markets for small, medium, and micro businesses are Southeast Asia and China. However, according to Amazon, the United States, Japan, and the EU will be their priority markets in the next 5 years. The reason is that Western consumers are increasing the frequency of online shopping and spending on purchases from Vietnam since 2020.

Mr. Gijae Seong, CEO of Amazon Global Selling Vietnam, stated: “E-commerce is considered one of the next big trends for businesses that want to develop globally“.

Therefore, the question is whether businesses can quickly take advantage of this trend, at the same time, grasp the global consumer demand, and carry out long-term growth plans or not.

On the other hand, Vietnamese businesses may face many challenges in online transactions when they bear higher cross-border postage and customs fees.

However, according to the UK consultancy firm Access Partnership, in order to maximize the opportunities of e-commerce exports, Vietnamese businesses need more legal and financial support, such as setting up cross-border e-commerce zones, providing export financing…

Article reference source: Amazon, Access Partnership, GSO

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