Why does Vietnam love e-commerce? Luxury consumers prefer shopping for Gucci, Chanel and Dior on social networks like Instagram over physical stores – and the trend only grew during Covid-19

With a developing economy and a population of over 97 million in 2020, Vietnam is a promising market for e-commerce and that promise has only grown over the last year despite – or even in part as a result of – the coronavirus pandemic.

According to a January 2021 report by the country’s Ministry of Industry and Trade’s Department of E-commerce and Digital Economy, 53 per cent of the population has already took part in online retail. Meanwhile, the “E-conomy SEA 2020” report from Google, Temasek and Bain & Company pointed out that e-commerce in Vietnam grew 46 per cent year on year, alongside strong growth across most sectors except for travel. Looking towards 2025, they suggest the e-conomy will reach US$52 billion in value, ranking third in Southeast Asia.

The fast-growing middle class is the sector driving increasing expenditure, with its number reaching 33 million in 2020, up from 12 million in 2012. As the middle class expands, there’s also a growing interest in top luxury brands.

The new demographic are HENRYs (High Earners Not Rich Yet), who have an annual income of about US$75,000-100,000, according to Robert Tran, CEO at RBNC, a global business advisory firm.

“Together with those who have over US$100,000 per year, they usually purchase products from luxury brands by ordering directly from them or through sellers offering the full service of order and delivery,” he said. 

Many people also travel to neighbouring places with large shopping malls, such Hong Kong and Singapore, just to get their Gucci bags or Rolex watches, according to Vo Thi Khanh Trang, head of Savills Vietnam’s research and consultancy department. Noticing this, more brands have been paying attention to Vietnam in recent years, and Gucci, Louis Vuitton and Saint Laurent have opened stores in the country.