A new daily cargo flight between Nanning, China, and Ho Chi Minh City was launched this week to help e-commerce giant Lazada meet booming demand from digital consumers ahead of the Lunar New Year and bypass trucking bottlenecks slowing trade between the two countries.
Cainiao, the logistics arm of the Chinese internet titan Alibaba Group, which is Lazada’s parent company, started the direct, three-hour flight on Tuesday because it said it is anticipating “a surge in cross-border parcel volume” leading up to the Feb. 1 Tet holiday.
The new flight underscores the unprecedented growth Vietnam has been seeing in its internet economy.
Cainiao pointed out in its news release that Vietnam’s e-commerce market is currently valued at $13 billion a year and is expected to increase to $39 billion by 2025, which would make it the second-largest market in Southeast Asia behind Indonesia, according to a 2021 regional report.
To demonstrate “the immense growth potential of the local consumer market,” Shawn Louis, a Cainiao executive for the Asia Pacific, cited how during the “11.11” online shopping festival, Lazada in Vietnam saw about double the number of orders and sales compared with the year before.
“With the upcoming Tet, one of the largest celebrations in Vietnam, we are anticipating a similar surge in Lazada eCommerce purchases in the weeks leading up to the festival,” Louis said.
Cainiao also cited a recent report by Kantar that revealed online sales in Vietnam in the month leading up to Tet can triple in volume, with 44% of consumers saying they plan to shop for Tet two weeks prior to the festival.
The growing prominence of online shopping among the Vietnamese has become more evident during the months-long lockdown, with people relying on these internet-based services to buy goods and essentials. But while this surge in order volume posed an increase in sales among online sellers, the pandemic has created supply-chain logjams as countries restricted border crossings and production halted amid widespread lockdowns and COVID-19 outbreaks at factories.
The release, citing a Transport Intelligence report, noted that Vietnam is “experiencing an accelerated pandemic-driven logistics and supply chain crisis,” following the country’s various movement restrictions and quarantine measures.” Besides slower port operations, the country is also facing declining export volumes due to the restrictions imposed by both Vietnam and China, their main source of exported goods.
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