The online retail sector is growing more difficult for small businesses, as they struggle to match the established names with strong brand recognition and large advertising funds or international sellers offering lower costs.
Tuan Anh, a vendor in Ho Chi Minh City, has struggled to sell much through his online printed T-shirt store and has chosen to discontinue it completely.
A clerical employee, who attempted to make some additional income through a secondary job, discovered that it had turned into a loss.
"there are too many rivals on online shopping sites," he statedVnExpress.
The sole method of selling is through advertisements, which I, as a small vendor without sufficient funds, cannot afford.
He is not the only one in this situation.
In the first half of the year, the number of e-commerce sellers with at least one transaction dropped by 80,000 compared to the previous year, as reported by data tracker Metric.
The competition in the e-commerce sector is becoming more intense, with the market showing a preference for bigger sellers who can ensure consistent order levels.
The digital marketplace is experiencing rapid growth,but primarily for major suppliers.
A consultancy firm named YouNET ECI reported that the total merchandise value of the four biggest multi-category e-commerce platforms—Shopee, TikTok Shop, Lazada, and Tiki—reached VND222.1 trillion (US$8.8 billion) in the first half of the year, marking a 23% rise compared to the previous year.
However, the count of active vendors on these sites decreased by 1.3% to 578,700.
Nguyen Phuong Lam, head of market analysis at YouNet ECI, noted the 34% rise in revenue for official brand stores during the first half.
According to Metric's data, Shopee and TikTok Shop, which collectively hold over a 90% market share, reveal that shopping malls make up only 3.4% of the total number of shops but contribute to 28.7% of sales.
The report highlighted that this indicates consumers are becoming more cautious, placing emphasis on trust and dependability while shopping in an environment filled with numerous low-quality products.
Small vendors also face challenges due to limited funds for marketing, which has become crucial for attracting orders, said Nguyen Khac Tu, founder and CEO of Bigshop, an electronics and household goods seller, who has been active in e-commerce for a decade.
If sellers on Shopee don't run advertisements, they receive very limited orders. In the same way, live streams on TikTok Shop that aren't promoted draw in few viewers.
Rising platform charges have also affected small vendors, he mentioned.
YouNet ECI's Lam acknowledged that the fees are a significant concern.
Due to the increasing platform charges, numerous small, unprofessional, or inadequately funded sellers are compelled to leave the market.
The time of making fast gains from inexpensive, poor-quality products is also disappearing, he noted.
In the budget category, global retailers are making progress against local competitors.
On Shopee, overseas retailers experienced a nearly 7% increase in sales during the first half, despite the average order value being only VND45,000.
Tighter rules on product quality and a major effort to combat counterfeit items are leading some vendors to withdraw.
The E-commerce and Digital Economy Agency under the Ministry of Industry and Trade stated that online marketplaces took down over 33,000 items and fined more than 11,000 stores for breaches during the first half of this year.
However, there are still chances for smaller participants as the online shopping industry keeps expanding quickly.
Metric predicts a 21.6% rise in sales during the third quarter of 2025, with the total transaction value across the four main platforms expected to hit VND122.8 trillion.
Long-term projections from the e-Conomy report, authored by Google, Temasek, and Bain & Company, indicate that Vietnam's digital market is expected to reach $63 billion by the end of the decade, almost three times the 2024 level.
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| A individual hands over a package to a client. Image courtesy of Unsplash/rosebox |
However, success is now predominantly attained by legitimate businesses with substantial financial resources.
Lam mentioned that shoppers purchase online throughout the year in different product categories, focusing on quality, and online marketplaces are no longer just a way for vendors to "get rid of excess stock."
Critical commitment to branding, service excellence, and financial readiness for the long term is necessary to remain competitive.
The Vietnamese e-commerce sector is now beyond the stage of temporary strategies.
A suggested e-commerce regulation seeks to improve market standards and openness.
Platforms will be held more responsible, needing to remove items that breach guidelines within 24 hours of identification.
Vendors need to confirm their identities to ensure transparency.
Nguyen Huu Tuan, head of the E-commerce and Digital Technology Development Center, mentioned that sellers would face stricter oversight regarding their products.
All legally mandated details must be present on product labels, he stated.
Tech products that lack certification or are not authorized for sale—particularly technology or imported items—will find it difficult to remain in the market. The era of listing products with incomplete or misleading details has ended.