Unlike the North Asian markets of China, Taiwan and the Republic of Korea, which posted robust growth, online commerce is still dwarfed by other non-digital channels in the Vietnamese market where its development faces numerous challenges.
Across Asia, the report said consumers focus most on convenience – either digital or physical proximity – when it comes to purchasing FMCGs.
However, in Vietnam the convenience of digital technology and the use of the internet or smartphones to place orders does not outweigh the benefit of physical proximity of stopping by a brick and mortar store to purchase FMCGs.
In other words, shoppers in Vietnam find it more convenient to stop by a physical convenience store and make their purchases rather than bother placing an order online and dealing with the hassles of payment and delivery.
Modern convenient store chains such as Vinmart, independent (non-chain) minimarkets and traditional mom and pop shops are still perceived by most Vietnamese shoppers as more expedient.
In terms of growth, these latter physical channels far outperformed ecommerce in terms of growth rates over the past five years, said the report.
The findings of the report are consistent with findings of the Vietnam Ecommerce and Information Technology Agency, which reported that last year only 6% of metropolitan households in the country shopped online for FMCG products.
The numbers of shoppers who purchase FMCGs online remains markedly low even though according to the Agency’s estimates, 94% of urban households and 69% of rural households across Vietnam have access to the web.
The figures of the Agency and the Kantar Worldpanel report both support the opinion of most experts that say there is absolutely no correlation between the number of people in a country such as Vietnam that have access to the internet and the amount of ecommerce purchases.
These authorities do, however, support the proposition that there is a high correlation between wealth and online sales.
During an ideal purchase at a physical brick and mortar retailer, store associates play a vital role in engaging with customers by creating personal and memorable experiences, which generates retail customer loyalty and goodwill.
It is the store associates advice, feedback and recommendations, according to these authorities, that drive shopper sales and keep them returning to purchase their FMCGs on a regular basis.
Notably, shoppers with lower incomes tend to be more appreciative of store associates than their well-to-do counterparts.
Wealthy customers on the other hand feel that most sales and service staff do not make positive connections with them, and as a result, they prefer to bypass them altogether by shopping online.
The more affluent Vietnamese shoppers also have a propensity to select international imported FMCG brands because they perceive them as of higher quality.
The costlier international brands are generally not stocked in local metropolitan brick and mortar stores and consequently the wealthier are forced to order them on the internet as it is their only option.