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|"By going online, SMEs can expand not only to consumers domestically, but to a global marketplace that can be accessed by millions of Visa cardholders." ‑ Dang Tuyet Dung, country manager for Vietnam and Laos, Visa|
A McKinsey mid-April consumer survey observed that the shift to digital channels is more telling. Nearly 40 per cent of respondents listed the availability of an online store or mobile app as a primary factor for why they switched to a new grocery store. In addition, respondents who are shopping for groceries online say they are spending more during COVID-19 than they did before, and they intend to continue to do so after the pandemic.
“Even within physical stores, this digital shift is apparent as respondents express a stronger preference for contactless payment options, such as card tapping, in-app payment, and direct mobile payment, than they did before COVID-19,” the survey report explained.
|The trend towards cashless was already strong, but the global pandemic has pushed it even further|
In addition to the e-commerce boom, COVID-19 is accelerating the trend away from cash towards cards and digital payments. Consumers are trying to avoid contact as much as possible, especially with objects that may come into contact with multiple people.
The concerns about handling cash coupled with the heightened awareness of the benefits of electronic payments have expedited contactless payments. It is apparent that cashless payment is an innovative way to pay compared to cash, improves shopping and paying experiences, and achieves customer loyalty to brands.
Consumers who want a simple, clean, and secure way to pay can opt for contactless payments to satisfy this need. When using contactless payments, consumers also prefer not to have to hand over their payment card to store staff or have to touch a keypad.
During potential social distancing policies, Vietnamese consumers will have to find a new way to purchase for their desired services without going out of home. As a result, online businesses are on the rise as more consumers are embracing the benefits of online shopping. Now has seen rapid growth in recent years, onboarding over 70,000 sellers and covering 16 cities with a population over 30 million.
NowFood also witnessed a surge in its traffic during the pandemic. A survey carried out by market research firm Q&Me found 75 per cent of Vietnamese respondents in Hanoi and Ho Chi Minh City saying they used online food ordering services during the social distancing campaign.
As more consumers are pivoting to e-commerce and cashless payments, merchants have to adjust their strategies to meet the evolving demand. Merchants who emerge successfully after the pandemic will be those that have mastered the “order-payment-fulfilment” strategy; if any one part fails, the customer experience is broken. The fulfilment part of the strategy has seen the most change, with retailers having to adapt and provide new delivery, payment, and collection options.
“By going online, small- and medium-sized enterprises (SMEs) can expand their customer base not only to consumers in their city, region, or country but they will join a global marketplace that can be accessed by the millions of Visa cardholders around the globe,” said Dang Tuyet Dung, Visa country manager for Vietnam and Laos. “It is important to adopt digital payments and have an online presence for local merchants to increase sales. And Visa is at the forefront by supporting merchants and consumers with safe, secure, and convenient payment methods.”
To help merchants make a smooth switch to e-commerce and cashless payment, Visa is pushing its new initiative. “Where You Shop Matters” encourages consumers to support local businesses in Vietnam, while helping SMEs go digital to benefit from the surge in e-commerce following COVID-19.
“The Where You Shop Matters initiative is part of Visa’s broader vision of supporting SMEs. It follows Visa’s pledge to support 10 million small- and micro-sized businesses across Asia-Pacific,” Dung noted. “Here in Vietnam, the campaign will connect shoppers with merchants across the country, enabling SMEs to access new customers quickly, capitalise on the trajectory in favour of e-commerce, and maximise their revenue streams in this difficult period.”
Accordingly, Shopee will apply discounts of up to VND30,000 ($1.30) for Visa cardholders purchasing over the same amount on the platform, in order to encourage more activity and sales. Meanwhile, NowFood will be offering a VND20,000 (87 US cents) promotion code for transactions exceeding VND100,000 ($4.35) for existing merchants, and 20 discount e-vouchers worth VND20,000 each for newly onboarded merchants on NowFood.
“Taking business online can be daunting for many SMEs who might not know where to start. We’re excited to offer Visa’s support through partnerships with Shopee, the leading e-commerce platform in Southeast Asia and Taiwan, and NowFood, a pioneering food delivery service operating nationwide,” Dung added. “In providing onboarding and advertising support, as well as issuing cardholder incentives and promotions for newly onboarded SMEs, Visa is helping to drive online traffic and making digital adoption easier for SMEs across the country.”