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August 22, 2017

Nature of Payments & eCommerce: Thailand vs Vietnam

Thailand is a densely populated country with a population of around 66 million people. Political instability has damaged economic growth of the country in the last few years. Two-thirds of the GDP come from exports of rubber, rice, cars and electronics. Vietnam is one of the countries with the largest population with 90.5 million occupants. The reasons behind the fast growth of the country’s economy include the advancement of IT. Their standards of manufacturing are as high as in well-developed industries. Vietnam has a large agricultural sector, and is the world’s second largest exporter of coffee.

The Grand Palace, Bangkok, Thailand

Thailand

Financial Inclusion 

Bank account penetration in Thailand is high, while credit card penetration is surprisingly small at just 6%. Many Thai citizens don’t trust online transactions and prefer to use cash based payment methods. 

Trends in E-commerce

Thailand’s B2C e-commerce sector was worth 1.6 billion in 2015. Its e-commerce industry is expected to continue growing rapidly due to the improved infrastructure. Around 66% of internet users shop online. 

Internet and Smartphone Penetration

Approximately a third of Thailand’s population has access to the internet. The rate of smartphone penetration is 35%. 53% of internet users use their mobile phones to access the internet. 

How People Pay Online

The most popular payment method in Thailand is cash on delivery. 35% of all purchases take place online. Bank transfers account for 30% of all transactions, card-based transactions make up 25%. The remaining 10% is comprised of e-wallets and other payment methods. Thailand has a broad range of e-wallet schemes. One scheme relates to those who require credit cards, while the other scheme covers those who do not need credit cards. 

Da Nang, Vietnam

Vietnam

Financial Inclusion

31% of the inhabitants have bank accounts. There is low credit card penetration, this is because card companies have requirements that are unattainable to much of the population. However, this is expected to rise due to urbanisation and an increase in the young population.

Internet and Smartphone Penetration

Internet penetration in Vietnam is 36.2%. Smartphone penetration is higher, at 42% which is quite remarkable. The growth of this area is expected to increase web services and bring about a rise in the number of online services across all regions of the country. However, e-commerce growth has been limited by the low internet access, particularly in rural areas.

E-commerce Trends

The average spend per shopper is 145 US dollars. Lack of convenient online payment methods, poor infrastructure and delayed deliveries has hindered the growth of e-commerce. The factors that motivate online customers are comfort and convenience.

How People Pay Online

Cash payments account for 64% of all transactions, with e- wallets taking 13%. Cash-based payments include cash on delivery and the use of prepaid cards like VTC Telco, which has sixteen million active accounts. It has an e-wallet that can be used to carry out an online transaction in different ways including local and international cards and the e-wallet account itself. [caption id="attachment_1514" align="aligncenter" width="1024"]

General Points to Note

Thailand

Vietnam

 

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