Ecommerce in Vietnam is a booming industry that is estimated to be worth $24 billion in 2025. The competition is cut-throat and features heavily-invested companies such as Shopee, Sendo, Lazada and Tiki.
One of the biggest corporations in Vietnam, Vingroup, announced this month its intention to suspend all operations of adayroi, its e-commerce branch. For a good reason. In 2018, the four biggest e-commerce firms listed above lost a total of approximately $220 million.
The financial losses are understandable given the customer acquisition cost, investments in warehouses or assortment centers and the delivery cost. If Amazon Now is a standout service with its 2-hour delivery, within-day delivery can be considered a subpar service in the E-commerce world in Vietnam. Most of the main players are committed to delivery within hours inside Hanoi and Ho Chi Minh. The following is what E-commerce players plus Grab, a major ride-sharing app and a pivotal delivery partner in Vietnam, commit with consumers. Note that these commitments come with restrictions.
It is no easy feat to make such a commitment given how terrible traffic is in Hanoi and Ho Chi Minh. Look below for just a taste of what the traffic is like in the two biggest cities in Vietnam
It will be interesting to see how these companies can be profitable, how they can branch out to other provinces outside Hanoi and Ho Chi Minh, how they can delivery returns to investors and whether they could come up with something similar to Prime and AWS that obviously contributed so much to the health and profitability of Amazon.
I am in the middle of a visit to Vietnam. Here are a few casual and randome observations I have had so far
In addition to VAT, there is a new, at least to me, item on each bill: service fees. Based on my experience, it’s about 5% of the original bill. I hadn’t seen anything similar before.
Grab drivers in Hanoi don’t shift gears
A lot of Vietnamese people use manual scooters to commute. To be an effective and efficient driver, you need to shift gears so that you have more power after a stop and more speed when you are already moving stably. Effective gear shifting makes a ride more pleasant and protects the engine better. However, I noticed from a few Grab rides in Hanoi that drivers don’t shift gears. A few shifted gears, but it’s nowhere near enough to be effective
Grab drivers double charge customers the airport fees
At Tan Son Nhat airport in Ho Chi Minh city (Saigon), there is a toll that automobile drivers need to pay only once when they are getting out of the airport. On my way home from the airport, I was asked by the driver to cover that fee, which amounts to 10,000 VND (roughly $0.4). I was fine with that because I saw him pay the toll. However, when I was in a car entering the airport, the driver never had to pay anything. Yet, he still charged me the same amount. I am sure that he would ask the next passenger to pay as well.
Traffic jam at the airport
Knowing the ridiculous amount of traffic overflow that Tan Son Nhat has to handle, I booked the second earliest flight to Hanoi and got to the airport around 4am, thinking that the check-in would be short and quick. Boy, was I wrong! It was super crowded. It took me 75 minutes in total to complete check-in and security checks! At 4AM! Imagine the normal or peak hours!
Difficulty in exchanging currencies
Before I left the US for Vietnam, I withdrew some cash to cover my expenses. The ATM gave me only $20 bills; which I had no problem with since I didn’t think there would be any issues. On the first day in Vietnam, I tried to convert it into the local currency and it was not the smoothest thing in the world.
Firstly, you are charged a lower exchange rate with $20 bills than with $100 bills. Secondly, if your bills have small tears, some ink – no matter how small, or the print blurried a bit by time and excessive contact with human hands, the bills won’t be accepted by banks in Vietnam. You either have to go to local jewelry stores to do the exchanging or keep your dollars.
Grab – On its way to become a Super app
Gab entered Vietnam as a competitor of Uber. It proceeded to buy out Uber. Now, every person I know uses Grab for commute. I am sure other ride-hailing apps have customers, but Grab is by far the dominant player. Plus, you can do a lot of things with your Grab account including ordering food, paying bills, booking hotels and paying subscriptions
Retailer Adoption of Apple Pay Quickens. Since I was able to use Apple Pay on my phone, I have been using it as the first payment method, even in a city as small as Omaha. I have been a pretty happy user ever since.