Vietnam’s Booming E-Commerce Market: A Rising Opportunity with Strict Rules
This article was originally published in Italian in Panorama on 5th Mar 2025.
Please note that this is a courtesy translation of the Italian language article originally published in the Panorama Magazine Issue at: https://www.panorama.it/economia/vietnam-digitale-un-mercato-in-ascesa-che-non-fa-sconti-ai-giganti-delle-commerce
A Rapidly Expanding Market
In recent years, Vietnam has emerged as one of the most dynamic e-commerce markets in Southeast Asia. In 2024, the sector surpassed USD 25 billion in value, marking a 20% increase from the previous year (source: vir.com.vn). This growth has positioned Vietnam as the third-largest market in the region, following Indonesia and Thailand. However, the recent forced withdrawal of two Chinese e-commerce giants, Temu and Shein, has underscored the regulatory hurdles that foreign businesses must navigate to operate legally in the country.
The Temu and Shein Case: A Warning for Foreign Investors
The exit of Temu and Shein serves as a clear warning for international investors eyeing Vietnam’s e-commerce market. Both platforms were forced to suspend operations after failing to register with the Ministry of Industry and Trade (MOIT). Vietnamese authorities mandated that both companies comply by November 2024, temporarily halting all commercial, advertising, and promotional activities. Their failure to meet the deadline resulted in their removal from the market (source: reuters.com).
Stricter Regulations and Increased Oversight
This incident reflects Vietnam’s tightening control over the e-commerce sector to ensure compliance with local laws and protect consumers. The Ministry of Finance is also considering eliminating tax exemptions for imported goods valued below VND 1 million (approximately USD 40), a move that could have a significant impact on online sales platforms (source: reuters.com).
How Foreign Businesses Can Enter the Market
Foreign investors looking to enter Vietnam’s e-commerce sector have two main options. The first is direct investment, which involves establishing a limited liability company or acquiring shares in an existing business, subject to government approval. Additionally, large-scale platforms ranked among the country’s top five in revenue face additional scrutiny from the Ministry of Public Security.
Alternatively, foreign companies can operate without a physical presence in Vietnam, provided they meet certain criteria. Platforms are considered active in the local market if they use a Vietnamese domain, feature content in Vietnamese, or process over 100,000 transactions per year. In such cases, the company must register with the MOIT and either appoint a local representative or open a representative office.
Opportunities for Italian Businesses
For Italian companies looking to tap into the Vietnamese market, a strategic approach that ensures compliance with local regulations is essential. The growing demand for Made in Italy products—particularly in fashion, design, and food—presents strong opportunities in Vietnam’s booming e-commerce sector. However, success hinges on adherence to digital platform regulations and intellectual property protection.
One effective market entry strategy is forming partnerships with well-established local distributors, reducing risks associated with regulatory and logistical complexities. Italian companies can also leverage trade agreements between the European Union and Vietnam, which offer tariff reductions and customs facilitation for a range of Italian products.
Leading Platforms and Their Keys to Success
Despite regulatory challenges, Vietnam’s e-commerce market continues to attract global investors. Platforms such as Shopee (part of Singapore-based Sea Group), TikTok Shop (the e-commerce arm of China’s ByteDance), and Lazada (owned by Alibaba) have successfully adapted to local regulations and achieved strong results. In 2024, the four leading players—Shopee, Lazada, TikTok Shop, and Tiki—generated total sales of USD 13.8 billion, reflecting a 40% increase from the previous year (source: e.vnexpress.net). Shopee led the market with a gross merchandise value (GMV) of USD 9.3 billion, while TikTok Shop reached USD 3.8 billion, accounting for 66.7% and 26.9% of the market, respectively.
Vietnam: A Land of Opportunities and Challenges
With a young, digitally connected population, Vietnam remains a key e-commerce hub in Southeast Asia. For investors, success depends on understanding and adhering to local regulations. Those who can navigate Vietnam’s legal landscape effectively will be well-positioned to capitalize on the country’s rapid growth. The experience of Temu and Shein sends a clear message—Vietnam enforces strict compliance, making it essential for businesses to play by the rules if they want to succeed in one of the region’s most promising markets.
By: Attorney Carlo Diego D’Andrea, Vice President of the European Union Chamber of Commerce in China
