Smartphones - the future of the retail industry

Smartphones, which are helping to connect retailers and consumers, play a very important role in the future development of the retail industry.

Thirty-six percent of Vietnamese own smartphones, according to Google and TNS’s 2014 survey on consumer behavior. The proportion soared from 20 percent to 36 percent within one year. 

A survey by Nielsen showed that 58 percent of Vietnamese smartphone users often use the device to make online purchases. Vietnam ranks third in Southeast Asia in the proportion of consumers shopping online, after the Philippines and Indonesia.

The “smartphone boom” has helped retailers easily approach consumers, thus boosting sales.

It is estimated that one-third of the 30 players in the Vietnamese e-commerce market have developed apps allowing users to order goods through smartphones or tablets. These include Lazada, Zalora, VatGia, CungMua, NhomMua and HotDeal.

Zalora is a typical example which can show big changes in the Vietnamese way of doing online shopping.

Just one year after doing business in Vietnam, in July 2013, Zalora launched an app allowing people to buy goods online through smartphones that run on iOS and Android operating systems. Its website has also been optimized to make it easily approachable from mobile devices.

A report of the online shopping channel showed that in the first half of the year, 35-30 percent of the total visitors to Zalora’s website was from mobile apps and mobile browsers, which brought over 15 percent of its total sales.

Nguyen Phuong Anh, managing director of Zalora, said the proportion could be higher than 15 percent.

“Mobile apps and mobile browsers were believed to indirectly bring turnover to Zalora,” Anh explained. “People got information about products when accessing Zalora’s website from their smartphones, then saved the information and would possibly later place orders from their desktop computers or laptops.”

The managing director said she hopes the mobile channel will bring 30-35 percent increase in sales in the future or equal to the revenue from desktops and laptops.

Analysts commented that Zalora was not engaging in wishful thinking by planning to receive more orders through mobile channels. All the conditions necessary for mobile trade development are available, including a high percentage of smartphone users, the low 3G cost (less than VND100,000 a month), and the large wifi coverage in big urban areas.

The tendency of Vietnamese to use smartphones to connect to the internet explains the sharp increase in the number of 3G subscribers in recent years. According to the Ministry of Information and Communication, Vietnam had 3 million 3G subscribers, accounting for 20 percent of the 121.12 million subscribers in the country.

Sophie Tran, Vietnam marketing director of Google in Asia Pacific, noted that it was now the right time for the players in the e-commerce market to take the first steps to prepare for the mobile trend. For example, retailers need to be sure that their websites can be displayed well on mobile devices.

Vietnamnet/Thanh Mai