Vietnam’s social commerce industry is revolutionizing the e-commerce landscape, particularly for small business owners. Social commerce, a sub-sector of e-commerce that utilizes social media platforms for online buying and selling, has gained significant momentum in Vietnam due to the high rate of social media use in the country. In fact, social commerce accounted for 65% of Vietnam’s online retail economy in 2020.

While e-commerce is growing rapidly in Vietnam, social commerce stands out as a dynamic and cost-effective channel for businesses to connect with customers. Unlike traditional e-commerce platforms, social commerce sellers often rely on social media platforms like Facebook and Instagram to showcase their products and interact with potential buyers. However, social commerce in Vietnam is still in its early stages and lacks online ordering functions, requiring direct contact between buyers and sellers to complete transactions.

Facebook and Zalo, a Vietnamese social media platform, are the most commonly used channels for social commerce in Vietnam. With a high penetration rate for online shopping, Facebook serves as the leading shopping destination, followed by Zalo. Other platforms such as Instagram and TikTok are also gaining popularity, especially among the younger demographic.

The appeal of social commerce in Vietnam is fueled by several factors. The country’s high rates of mobile internet access and social media usage, coupled with strong engagement, provide a fertile ground for social commerce growth. Vietnamese consumers spend a significant amount of time on social media, increasing the likelihood of engaging in unconscious shopping through targeted ads. Moreover, social commerce offers opportunities for women and low-income groups to start their own businesses and achieve financial independence by leveraging their social networks.

Investors have the chance to capitalize on the burgeoning social commerce industry in Vietnam. As the industry lacks robust supply chain support, investors can play a pivotal role in offering inventory management, ordering, and payment solutions to social commerce sellers. By utilizing their purchasing power to negotiate lower wholesale prices and ensuring product origin, investors can provide valuable support to sellers and enhance the efficiency of the social commerce ecosystem.

The Vietnamese government has introduced regulations to address the unique nature of social commerce and protect both sellers and buyers. However, the existing regulations are not fully consistent with the practices of social commerce, calling for further alignment between the regulatory framework and the industry’s dynamics. Taxation and customs management for social commerce transactions also require attention to ensure smooth operations and compliance.

In conclusion, social commerce is driving the growth of e-commerce in Vietnam, offering a cost-effective and dynamic channel for small business owners to connect with customers. With the high rate of social media use in the country and rising mobile internet access, social commerce presents significant opportunities for investors and entrepreneurs. By leveraging the potential of social media platforms and addressing regulatory and support challenges, small business owners can thrive in Vietnam’s vibrant social commerce landscape.