Meta and Bain & Company release report on Southeast Asian digital consumers

Meta and Bain & Company have released a report on Southeast Asian digital consumers

Despite global uncertainties about commodity price fluctuations and supply chain disruptions which are affecting consumer confidence, Southeast Asia in general, and Vietnam in particular, still exhibit positive signals of stable development.

The conclusion of Meta and Bain & Company's annual SYNC Southeast Asia study on the digital economy and the future of e-commerce in the region is that GDP growth by the end of next year is expected to surpass major markets such as the United States, the European Union, and China thanks to a remarkable decrease in annual inflation rate and large FDI flows.

According to the report, in Vietnam, almost 80 per cent of the represented population are now digital consumers. The average contribution of e-commerce to total retail has continued to grow at 15 per cent over the past year (vs India's 10 per cent and China's 4 per cent growth), with the online share to total retail standing at 6 per cent.

Vietnam's gross merchandise value is expected to grow from $10 billion in 2021 to $12 billion in 2022, with a 28 per cent expected compound annual growth rate from 2022 to 2027.

Meta's country director of the Vietnam market Khoi Le sharing details of the report

"With a favourable demographic profile thanks to a number of long-term structural factors such as a growing number of workers, rising household incomes, and being one of the leaders in the adoption of future technologies, businesses in Vietnam will be able to thrive if they focus in the right direction, build an integrated channel strategy, manage the supply chain, and apply new tools and technologies to interact with digital consumers,” said Khoi Le, Meta's country director of the Vietnam market.

Nearly three years after the pandemic, research shows that consumers in the region are at a new stage of evolution, prioritising an integrated shopping experience that effectively combines online and in-person services. With the easing of restrictions, 10 per cent of Vietnamese respondents have switched at least one of their purchasing categories from online to offline channels.

One of the most cited reasons for this is the look-and-feel factor that offline channels offer. That said, throughout the Vietnamese consumer journey, online continues to serve as an important channel for digital shoppers in the country. In the discovery stage, 84 per cent of Vietnamese shoppers cite online as their go-to channel to browse for and find items.

Vietnamese digital consumers are using more platforms than ever before. With the dominance of the e-commerce market – accounting for 51 per cent of online spending – social media accounts for almost half of online discovery in Vietnam, consisting of videos (22 per cent), image feeds (16 per cent) and messaging (9 per cent). ​

Social media and related tools such as messaging are key channels for Vietnam's digital shoppers in the evaluation stage, accounting for 44 per cent of the share​ of respondents.

“Consumers' openness to interaction and experimentation has also led to a change in behaviour, with 64 per cent of respondents saying they've interacted with a company's conversational business account in the past year," Le noted.

"As customers seek more engagement, the content creation economy also shows many positive signs. In Vietnam, the average ratio of sales related to entertainment content in the three months preceding our survey increased 12 times,” he added.

Accordingly, Vietnamese digital consumers are becoming savvier, switching between brands more often and increasing the number of platforms they use to find better value – with 22 per cent of online orders carried out on different e-commerce platforms.

Value was one of the key drivers for this behaviour, as a better price was chosen as the top reason to switch platforms – followed by product quality and faster delivery times. The number of online platforms used by Vietnamese consumers has increased from eight in 2021 to 16 in 2022.

At the same time, Vietnam is also among the top markets in terms of the adoption rate of future technologies such as fintech solutions and the metaverse, next to Indonesia and the Philippines.

58 per cent of digital consumers in Vietnam have used online banking, e-wallets, money transfer apps, and digital banking in the past year. The use of digital technology in Vietnam is at various periods of maturity and is mainly driven by functionality and convenience.

Seven out of 10 digital consumers in Vietnam have used metaverse technology, including cryptocurrency, augmented reality, virtual reality, virtual world, and NFT in 2022. The nation has the highest percentage of VR applications in Southeast Asia, at 29 per cent.

Meta accompanies Vietnam in its digital transformation The digital economy accounts for more than 8 per cent of the country’s GDP, and tech giants like Meta continue to play a crucial role in the country’s digital acceleration. Rafael Frankel, director for Public Policy for South and Southeast Asia, Meta, talked with VIR’s Linh Le about Meta’s recent talks with the government and the country’s digital development.

Outlining the meteoric rise of metaverse development up and down the country Metaverse is one of the hottest buzzwords in technology today. Given its potential impact on both the real and virtual worlds, developments are being made to accommodate this new technology in multiple ways globally. Notably, countries in Asia are experiencing strong incentives for the initial exploitation of the metaverse. For example, investments in Thailand relating to the metaverse are seen in the public and private sectors.