E-commerce in Vietnam: Freeship as a "core" service

Lazada and Shopee have simultaneously implemented a free shipping policy across the entire platform in the context of the increasingly fierce e-commerce race in Vietnam.

E-commerce platform Lazada recently announced that it will implement an unlimited free shipping promotion for shoppers nationwide from July 2. Accordingly, all standard orders with a total weight of less than 15 kg from sellers in the LazMall system will be automatically applied the promotion and will not require buyers to collect or enter a discount code.

E-commerce platform Lazada recently announced that it will launch unlimited free shipping promotion for shoppers nationwide from July 2.

No longer a seasonal marketing tool, free shipping is being upgraded by e-commerce platforms to become a default part of the shopping experience. Instead of posting promotions within limited time frames or requiring users to "hunt" for codes, e-commerce platforms are gradually removing layers of conditions to move towards a more seamless model.

From incentives to "mandatory" services

A survey conducted by TGM Research on the e-commerce market in Vietnam shows that shipping is playing an increasingly important role in consumers' shopping behavior.

Specifically, up to 46% of users prioritize orders with cheap or free shipping fees, even higher than the rate of interest in product prices (45%). This figure partly reflects the trend of not only looking at the listed price, but also considering the total actual cost, in which shipping fees are the factor that most easily "drops" orders for consumers.

We Are Social’s Digital Marketing 2024 Report further reinforces this finding. According to the report, when faced with a choice between two types of offers, consumers tend to lean more towards free shipping.

Specifically, 44.7% of users choose free shipping as their favorite offer, while only 33.4% prioritize product discount codes. This shows that even when the price of goods remains unchanged, free shipping still brings a more obvious sense of “profitability” in the buyer’s mind.

Research units point out 3 reasons behind this trend. First, free shipping makes the product more “worth the money” in the perception of customers, as if they are receiving an additional value without having to pay more.

Second, free shipping helps simplify shopping behavior, eliminating the need to search and apply discount codes, which often disrupt the experience.

Finally, for low-value products, shipping costs account for a large proportion of the total cost, so free shipping becomes even more attractive, especially when it is not accompanied by complicated conditions.

Before Lazada, e-commerce platform Shopee also pursued this strategy when launching the program “0 VND shipping fee for all orders” on the entire platform from July 1.

With this program, Vietnamese consumers, regardless of rural or urban areas, can access products (under 15 kg) on ​​Shopee without worrying about shipping costs.

The platform also considers shipping costs as one of the major barriers for buyers. When this barrier is no longer there, business opportunities and shopping demand on the platform will grow significantly.

As consumers become more demanding, e-commerce platforms must invest long-term

The simultaneous implementation of free shipping policies across the platform by Lazada and Shopee takes place in the context of Vietnamese consumers becoming increasingly familiar with online shopping. After many years of acceleration, e-commerce is no longer an emerging trend but has become a part of the daily consumption habits of the majority.

This shift means that factors such as zero-cost shipping are no longer considered "special" incentives, but gradually become a service standard expected by users. For e-commerce platforms, this is a pressure to adapt, especially in the context of price competition reaching a threshold and the quality of the shopping experience becoming a distinct advantage.

The market context is also creating conditions for platforms to adjust their strategies. According to a report by research firm Momentum Works, the total merchandise value (GMV) of Southeast Asia's e-commerce in 2024 will reach 128.4 billion USD, up 12% over the previous year. Of which, Vietnam recorded a higher growth rate than the regional average, reaching 16 billion USD (up 16%) and holding the position of the 3rd largest market, after Indonesia and Thailand.

In Vietnam, the e-commerce market still revolves around 3 main platforms: Shopee, Lazada and TikTok Shop. Shopee is leading with about 65% of GMV (equivalent to 10.4 billion USD), TikTok Shop accounts for 28% (4.5 billion USD), while Lazada holds about 6% (1 billion USD).

However, according to Momentum Works' assessment, GMV does not fully reflect the business performance of a platform, but needs to be correlated with other indicators such as shopping frequency, average order value or user engagement.

Each platform is therefore pursuing its own strategy. While TikTok Shop focuses on scaling and tapping into real-time consumer behavior through video content, some platforms like Lazada prioritize sustainable growth, focusing on a customer base with stable demand, clear product origins and a consistent shopping experience - in which free shipping is integrated as part of the basic service.

(According to Znews)

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