With a significant rise in e-commerce and cashless payments during the COVID-19 pandemic, global digital payment company Visa has launched the ‘Where You Shop Matters’ initiative through partnerships with Shopee and NowFood to provide a seamless online shopping experience.
The COVID-19 pandemic has acted as a strong tailwind to the already burgeoning e-commerce market in Viet Nam. Social distancing measures have driven more consumers to shop online than before. Specifically, a growing number of first-time users have switched to online grocery and delivery models. Many of these first-time buyers are from older age groups that tend to be the later adopters of e-commerce.
A McKinsey mid-April consumer survey observed that the shift to digital channels is more telling. Nearly 40 per cent of respondents listed the availability of an online store or mobile app as a primary factor for why they switched to a new grocery store. In addition, respondents who are shopping for groceries online say they are spending more during COVID-19 than they did before, and they intend to continue to do so after the pandemic.
“Even within physical stores, this digital shift is apparent as respondents express a stronger preference for contactless payment options, such as card tapping, in-app payment, and direct mobile payment, than they did before COVID-19,” says the survey.
In addition to the e-commerce boom, COVID-19 is accelerating the trend away from cash towards cards and digital payments. Consumers are trying to avoid contact as much as possible, especially with objects that may come into contact with multiple people.
The concerns about handling cash coupled with the heightened awareness of the benefits of electronic payments have expedited contactless payments. It is apparent that cashless payment is an innovative way to pay compared to cash, improves shopping and paying experiences, and achieves customer loyalty to brands. Consumers who want a simple, clean, and secure way to pay can opt for contactless payments to satisfy this need. When using contactless payments, consumers also prefer not to have to hand over their payment card to store staff or have to touch a keypad.
Capitalising on e-commerce and cashless payment boom
Meanwhile, NowFood has seen rapid growth in recent years, onboarding over 70,000 sellers and covering 16 cities with a population over 30 million. NowFood also witnessed a surge in its traffic during the pandemic. A survey done by market research firm Q&Me found 75 per cent of Vietnamese respondents in Ha Noi and HCM City saying they used online food ordering services during the social distancing campaign. Among them, NowFood is the second most popular delivery app in the country.
As more consumers are pivoting to e-commerce and cashless payments, merchants have to adjust their strategies to meet the evolving demand. Merchants who emerge successfully after the pandemic will be those that have mastered the “order-payment-fulfilment” strategy; if any one part fails, the customer experience is broken. The fulfilment part of the strategy has seen the most change, with retailers having to adapt and provide new delivery, payment, and collection options.
“By going online, SMEs can expand their customer base not only to consumers in their city, region, or country but they will join a global marketplace that can be accessed by the millions of Visa cardholders around the globe,” Dang Tuyet Dung, Visa Country Manager for Vietnam and Laos said. “It is important to adopt digital payments and have an online presence for local merchants to increase sales. And Visa is at the forefront by supporting merchants and consumers with safe, secure, and convenient payment methods.”
Visa’s efforts to support Vietnamese merchants
To help merchants make a smooth switch to e-commerce and cashless payments, Visa has recently launched a new initiative called ‘Where You Shop Matters’. This initiative encourages consumers to support local businesses in Viet Nam, while helping small- and medium-sized enterprises (SMEs) go digital to benefit from the surge in e-commerce following COVID-19.
“The Where You Shop Matters initiative is part of Visa’s broader vision of supporting SMEs. It follows Visa’s pledge to support 10 million small and micro businesses across the Asia-Pacific. Here in Viet Nam, the campaign will connect shoppers with merchants across the country, enabling SMEs to access new customers quickly, capitalise on the trajectory in favour of e-commerce, and maximise their revenue streams in this difficult period,” Ms. Dung noted.
Accordingly, Shopee will apply discounts of up to VND30,000 for Visa cardholders purchasing over VND300,000 on the platform, in order to encourage more activity and sales. Meanwhile, Now will be offering a VND20,000 promotion code for transactions exceeding VND100,000 for existing merchants, and 20 discount e-vouchers worth VND20,000 each for newly onboarded merchants on NowFood.
“Taking business online can be daunting for many SMEs who might not know where to start. We’re excited to offer Visa’s support through partnerships with popular e-commerce enablers Shopee, the leading e-commerce platform in Southeast Asia and Taiwan, and NowFood, a pioneering food delivery service operating nationwide. In providing onboarding and advertising support, as well as issuing cardholder incentives and promotions for newly onboarded SMEs, Visa is helping to drive online traffic and making digital adoption easier for SMEs across the country,” Ms. Dung added.