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Lotte moves into e-commerce

Released at: 11:21, 26/10/2016

Lotte moves into e-commerce

Photo: Viet Tuan

Retailer aiming for a 20% market share and being among market leaders.

by Quynh Nguyen

South Korea's Lotte launched an e-commerce site on October 24 with the goal of staking out a 20 per cent market share in Vietnam’s e-commerce sector.

Managed by the Lotte E-commerce Co., the site offers all fast-moving consumer goods (FMCG) from Lotte Mart as well as luxury cosmetics and fashion items from the Lotte Department Store.  

Mr. Seo Tae Ho, Director of the Lotte E-commerce Co., said that prices on the site are the same as in Lotte outlets and cheaper than some e-commerce sites. It also launched online shopping apps for iOS and Android, targeting mostly women.

According to predictions by Google and Temasek, e-commerce revenue in Vietnam will reach about $8 billion by 2025. With such potential, Mr. Ho said, Lotte aims to join the leaders in the country’s e-commerce market.

Lotte now covers all retail channels: supermarkets, TV sales, online and mobile. Vietnamese consumers spent $4.07 billion purchasing goods via e-commerce sites in 2015, a 37 per cent increase against 2014 and accounting for 2.8 per cent of total retail revenue, according to the latest report from the Vietnam E-Commerce and Information Technology Agency (VECITA) under the Ministry of Industry and Trade.

On average each person spent about $160 on e-commerce purchases in 2015. Clothing, footwear, and cosmetics were the best-selling category, accounting for 64 per cent of revenue, followed by technology, electronic goods, and household appliances and equipment.

A VECITA survey on 500 people in Hanoi and Ho Chi Minh City found that 88 per cent used mobile devices to research goods and services prior to purchase and 45 per cent used mobile devices to search for information on goods at least once a day.

The Prime Minister recently approved a comprehensive plan for developing e-commerce in the 2016-2020 period with specific targets set under Decision No. 1563.

The goal is to not only help businesses increase market share but also bolster the efficiency of government administrative services. “National e-commerce systems will be built and developed to better use models such as business-to-consumer (B2C), business-to-business (B2B), Government-to-citizen (G2C), and Government-to-business (G2B),” the Decision states.

Targets include 30 per cent of the population buying goods and services online by 2020, with average annual spending being $350 per person; revenue from online B2C to increase to $10 billion, accounting for 5 per cent of total retail spending in the country; and online B2B to account for 30 per cent of total export turnover.

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