A revenue generation of over USD 1 Bn registered by Vietnam Online Grocery Market in 2021. Will growth continue in the future?: Ken Research

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In 2016, Online Grocery Penetration was 0.12% which increased to 1.85% in the year 2021 with smartphone Users aged 25-44 being the major target audience, says a report by Ken Research 

1. Price, Delivery Cost and Delivery Time Amongst Most Influencing Factors tilting the consumer preference towards online shopping

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The most beneficial factor of shopping online was identified as a possibility to compare prices and buy at a lower price. Customer would prefer the operator that would offer similar products at a lower price. Grocery signifies urgency. Faster delivery increases the chances of regular and frequent orders and delivery fees, convenience charges or any other surcharges reduces the chances of regular orders. Moreover, customers prefer their orders to be delivered within the promised time slot, preferably between 6 – 9PM which has increased the demand for online platforms as the time slots are busy. Promotion techniques such as coupons, free samples, discounts, cashback offers increases the chances of customer retention. Hassle free payment, return & refund experience is an important factor in a purchasing decision. A clear return policy gives consumers a feeling of security which is often not the case in offline purchases. About 60% of online grocery shoppers prefers cash as mode of payment.

2. Covid-9 affected the growth of Online Grocery Market positively with people switching to Online platforms for grocery shopping

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Due to COVID-19 Outbreak, people avoided crowded places and turned to online grocery shopping amid escalating fears. Customer’s habits have completely changed during the pandemic, which led to the sudden shift from offline to online shopping. COVID-19 has also made cashless transactions more popular among consumers. With lockdown measures in place, people resorted to online means of purchasing groceries.

3. “Express Delivery:” Increasing demand for fast-delivery of groceries is anticipated to be seen in the upcoming years as people expect more online platforms

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Features such as Express delivery, increasing service innovation is Expanding product assortments to ensure 100% product availability at all times. Virtual shopping tour with available products. Enabling consumers to compare products, prices and read labels & Facilitators in terms of shopping lists i.e. multiple family members could add to a common grocery wish list will be expected in the upcoming years with the market growing at a CAGR of over 20%. Moreover, improvement in delivery infrastructure is also something that can be expected to be there in the online grocery market in Vietnam. All in all, availability of products, discounts, express delivery are some of the trends that can be seen during the forecasted period.

With over 350 outlets in Vietnam Online Grocery Market, the Supply side has been doing well. Is the Demand sufficient for a Robust Growth?: Ken Research

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The country has over 8 players partnering with over 40 logistics companies actively in order to fulfill the demand, says a report by Ken Research

1. “Supply taken care of:” The supply side infrastructure of Vietnam Online Grocery Market is positioned well as a result of various initiatives by the government & companies themselves.

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The online grocery market in Vietnam is well positioned to fulfill the current demands of the industry as a result of various initiatives undertaken by the government & the companies themselves. In May 2020, the government of Vietnam approved the e-commerce development master plan that aims to promote the e-commerce by narrowing the gap between major cities and localities and building a sustainable virtual market. Rising income levels have also led to a change in the spending pattern. The middle-income class in Vietnam has been growing steadily over the past ten years. During the period 2016 – 2021 it was observed that the middle-income population in Vietnam increased at a CAGR of 10%, it accounted approximately 13% of the total population, and is expected to grow by 26% by the end of the year 2026. With over 61 Mn active internet users, Vietnam has a well-positioned market for e-commerce.

2. The rising internet penetration & working professionals alongside some perks arising out of online grocery shopping has tilted the preference towards online platforms.

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The most beneficial factor of shopping online was identified as a possibility to compare prices and buy at a lower price. Customer would prefer the operator that would offer similar products at a lower price. Moreover, promotion techniques such as coupons, free samples, discounts, cashback offers has increased the chances of customer retention. Hassle free payment, return & refund experience is an important factor in a purchasing decision and has lured customers towards online shopping. Furthermore, a clear return policy gives consumers a feeling of security which is often not the case in offline purchases. When it comes to working professionals, faster delivery is something that has attracted them alongside rising internet penetration rate which stood at over 61 Mn in 2020. All in all, the online shopping trend is picking up pace with over 30% of online buyers being frequent in nature placing the order 3-5 times a month.

3. “Demand to pick up pace:” Increasing demand for fast-delivery of groceries is anticipated to be seen in the upcoming years as people expect more online platforms.

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Increasing service innovation such as Expanding product assortments to ensure 100% product availability at all times. Virtual shopping tour with available products. Enabling consumers to compare products, prices and read labels & Facilitators in terms of shopping lists i.e. multiple family members could add to a common grocery wish list will be expected in the upcoming years. Moreover, improvement in delivery infrastructure is also something that can be expected to be there in the online grocery market in Vietnam.