New Delhi, Nov. 25, 2024 (GLOBE NEWSWIRE) -- According to Astute Analytica, the Vietnam AI in e-commerce market is projected to hit the market valuation of US$ 1,743.35 million by 2032 from US$ 165.43 million in 2023 at a CAGR of 30.80% during the forecast period 2024–2032.
Vietnam's AI-driven e-commerce market is poised for remarkable growth, with projections indicating over 70% of the population is engaged in online transactions. This exponential growth is underpinned by a robust digital infrastructure, with an internet penetration rate of 79.1% and 78.44 million internet users. The integration of AI technologies is revolutionizing the sector, as evidenced by the AI market in Vietnam. This rapid expansion is fueled by significant investments, with $95 million poured into AI startups in 2022 alone. The government's proactive stance, exemplified by the National Strategy on R&D and Application of Artificial Intelligence, is creating a conducive environment for tech firms, further accelerating AI adoption in e-commerce.
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The transformative impact of AI in e-commerce market operations is already evident across various facets of the industry. AI-powered chatbots have reduced response times by up to 75% for customer support and 60% for technical support, while decreasing human agent workload by 45%. In logistics, companies like Ahamove are leveraging AI to manage over 200,000 deliveries daily, optimizing routes and enhancing efficiency. Personalization, a key driver of customer engagement, is being revolutionized by AI algorithms that analyze vast amounts of customer data to offer tailored product recommendations and marketing messages. These advancements are not only improving operational efficiency but also providing a competitive edge in the rapidly evolving digital marketplace.
Looking ahead, the potential for Vietnam's AI in e-commerce market appears boundless. Future trends point towards more sophisticated AI applications, including advanced natural language processing, machine learning, and AI-powered search functions. These technologies are expected to enable hyper-personalized shopping experiences, dynamic pricing strategies, and optimized inventory management. As AI continues to evolve, it will drive innovation and growth in Vietnam's e-commerce sector, potentially positioning the country as a leader in the region's digital economy. The convergence of AI and e-commerce in Vietnam presents a promising outlook, with the potential to reshape the retail landscape and set new standards for customer experience and operational excellence.
Key Findings in AI in E-Commerce Market
| Market Forecast (2032) | US$ 1,743.35 million |
| CAGR | 30.80% |
| By Component | Solution/Software (53.17%) |
| By Technology | Machine Learning (ML) (35.40%) |
| By Application | Fron-End (59.02%) |
| By End Users | Omnichannel E-commerce (50.83%) |
| By Business Model | B2C (64.51%) |
| Top Drivers |
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| Top Trends |
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| Top Challenges |
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B2C's Ascendancy in Vietnam's AI-Driven E-commerce Landscape to Control Over 64.51% Market Share
Vietnam's e AI in e-commerce market is experiencing a meteoric rise, with the Business-to-Consumer (B2C) model firmly at the helm. The country's digital economy leaped from $3 billion in 2015 to an impressive $30 billion in 2023, and it's projected to soar to $43 billion by 2025. This growth is fueled by over 70 million internet users, making Vietnam one of the top internet adopters globally. The mobile-first nature of its populace, with approximately 61 million smartphone users, further propels online shopping. Notably, 60% of the population is under 35, a youthful demographic that is tech-savvy and more inclined towards e-commerce platforms.
Major B2C platforms in the AI in e-commerce market are leveraging AI to enhance user experience and operational efficiency. Shopee, for instance, has surpassed 200 million app downloads, utilizing AI-driven personalized recommendations that have boosted user engagement by 20%. Lazada employs AI-powered logistics capable of handling over 100,000 orders daily, ensuring same-day delivery in key cities. Tiki's AI-integrated system, managing 33 warehouses nationwide, enables its TikiNow service to offer two-hour delivery, setting a new standard in customer satisfaction. Additionally, COVID-19 accelerated e-commerce adoption, with online retail sales climbing to $13.8 billion in 2023 from $4 billion in 2015. Government initiatives aim to have 50% of SMEs adopt digital platforms by 2025, further solidifying B2C's dominance.
Machine Learning is The Strategic Core of Vietnam's E-commerce Evolution
In the competitive environment of Vietnam's AI in e-commerce market, Machine Learning (ML) stands out as the pivotal technology driving innovation by capturing over 35.40% revenue share. The sector processes millions of transactions daily, contributing to an online spending total of $12 billion in 2022. ML's capacity to analyze vast datasets enables e-commerce platforms to optimize pricing, forecast demand, and detect fraud, essential for maintaining consumer trust. For example, Sendo's dynamic pricing, powered by ML, has led to a 15% sales increase by adjusting prices in real-time. Thegioididong, an online retail giant, uses ML for inventory optimization across its 2,000 stores, reducing holding costs by 10%. Tiki leverages ML in its recommendation engine, analyzing over 50 million product searches monthly, enhancing personalization and boosting conversion rates.
ML's versatility surpasses other AI technologies like NLP and Computer Vision. It transcends language barriers—a crucial advantage in a nation with 54 ethnic groups and multiple dialects. ML's seamless integration with existing systems makes it cost-effective for the 98% of Vietnamese businesses that are SMEs. The government's commitment is evident in its plan to invest $415 million in AI research by 2025. Educational institutions are expanding ML programs, addressing the talent gap and ensuring a steady flow of skilled professionals to sustain industry growth.
Front-End AI Applications: Revolutionizing User Experience in Vietnam's AI in E-commerce Market
Front-end AI applications are at the forefront of transforming Vietnam's e-commerce, significantly enhancing the user interface and experience. With over 57 million online shoppers in 2023, there's a rising demand for personalized and efficient services. AI chatbots on platforms like Tiki and Sendo manage over 80% of customer inquiries, leading to a 25% increase in customer satisfaction. Voice-assisted shopping, tailored for Vietnamese speakers, processes over 500,000 commands monthly, making shopping more accessible. Visual search technology is another groundbreaking application. Users can upload images to find similar products, a feature that has increased search efficiency by 30% and boosted sales conversions. Zalo, Vietnam's leading messaging app with 60 million users, integrated AI-powered shopping features, merging social interaction with e-commerce and tapping into the growing social commerce trend.
The surge in front-end AI applications is driven by Vietnam's young, tech-savvy population and high smartphone penetration—61 million users, with mobile devices accounting for 72% of e-commerce traffic. Investments reflect this focus, with an estimated $9 million funneled into AI front-end development in 2023. Companies recognize that superior user experience is a key differentiator in a competitive market, and AI is the catalyst propelling Vietnam's e-commerce into the future.
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Alibaba is the Largest Players in Vietnam AI in E-commerce Market With over 16.82% Market Share
Alibaba Group Holding Limited has firmly positioned itself as a leader in Vietnam's AI in e-commerce market through its strategic acquisition and enhancement of Lazada. By acquiring Lazada, Alibaba gained a significant foothold in the Vietnamese market, utilizing its advanced AI technologies to transform the platform into a powerhouse of personalized shopping experiences and operational efficiency. AI-driven personalization has allowed Lazada to offer tailored recommendations, significantly boosting user engagement and conversion rates. Furthermore, Alibaba's investment in smart logistics—such as AI-optimized delivery routes and inventory management—has reduced delivery times and operational costs, making Lazada highly competitive in the local market. This integration of AI across all facets of the business demonstrates Alibaba’s commitment to innovation and customer satisfaction, which has been pivotal in solidifying its market leadership.
Moreover, Alibaba's continuous investment in technological infrastructure and local talent development has enabled Lazada to maintain its competitive edge in Vietnam’s AI in e-commerce market. The company’s focus on AI-driven marketing strategies and dynamic pricing models has resulted in substantial sales growth, with events like the Singles' Day shopping festival showcasing double-digit percentage increases in orders. By establishing a robust AI research and development presence in Vietnam, Alibaba has tailored its solutions to meet local demands, enhancing Lazada’s appeal to Vietnamese consumers. The combination of global expertise with local insights has not only strengthened Lazada’s market share but also set new standards in the e-commerce industry. As Alibaba continues to push the boundaries of AI technology, it remains at the forefront of Vietnam's e-commerce evolution, providing a blueprint for future digital innovations in the region.
Vietnam AI in E-commerce Market Key Players:
- Alibaba Group Holding Limited
- Amazon Web Services Inc.
- Microsoft Corporation
- IBM Corporation
- Google LLC (Alphabet Inc.)
- SAP SE
- Nvidia Corporation
- FPT Smart Cloud Company Limited
- Intel Corporation
- Smart Fashion Pte Ltd
- Other Prominent Players
Key Segmentation:
By Component
- Hardware
- AI Chips
- Smart Devices
- Sensors
- Solution/ Software
- AI Platform/Tools
- Chatbots & Virtual Assistants
- Others
- Services
- Professional Services
- Managed Services
By Technology
- Natural Processing Language (NLP)
- Machine Learning (ML)
- Computer Vision (CV)
- Data Mining
- Deep Learning
- Robotic Process Automation (RPA)
- Others
By Application
- Front-End
- Customer Service & Engagement
- AI-based Chatbots
- Virtual Assistants
- Personalized Product Recommendations
- Search & Visual Search
- Customer Churn Prediction
- Generative AI
- Heatmap
- People Counting
- Consumer Behavior Analysis
- Others
- Customer Service & Engagement
- Back-End
- Fraud Detection and Prevention
- Inventory & Supply Chain Management
- Dynamic Pricing & Promotions
- Logistics Optimization
- Others
By End Users
- Specialized eCommerce
- Multiformat/Diversified eCommerce
- Omnichannel E-commerce
By Business Model
- Business-to-Consumer (B2C)
- Business-to-Business (B2B)
- Consumer-to-Consumer (C2C)
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