With the burst of international investments in technology and the booming of IT talents, the eCommerce industry is rapidly expanding in Vietnam. Among the most dominant market for rising technology in its region, Vietnam’s annual growth rate is 25%, dominating 5,5% of total consumption goods, which equals 11,5 M market cap in the country. Within the Southeast Asia area, Vietnam places only behind Indonesia in the top 3 countries with the highest retail growth rate.
What’s an eCommerce platform?
ECommerce, known as electronic commerce or internet commerce, describes the commercial transactions of any kind facilitated through the internet. An ECommerce platform is a software application that enables the process of eCommerce, basic internet-based commercial transactions. In our new consumption era, well-known eCommerce platforms facilitate selling and buying physical products. Some of the dominant eCommerce platforms in the world are Amazon, Alibaba, eBay, and more.
The differences
General platforms target generalized market segments and serve companies favoring generalization. Instead of focusing on a niche, these companies try to encompass as many features and capabilities as possible. With eight products across different markets, Facebook is a leading example of a technical company expanding its corporation by generalization.
However, as modern businesses aim for a higher-value proposition and much-refined focus, corporations turn toward specialization.
Generalized platforms encourage economic diversity
Generalization means diversity. By choosing to serve a broader range of markets, these companies compromise on delivering various services across different lines. Nonetheless, this comes in handy with economic securities. In periods of economic uncertainties, operating on multiple services prevents companies from running out of the market when, unfortunately, one of its product lines is not as favored. Having diversified experience allows businesses to realize and focus their strengths and eliminate the less profitable features. Therefore, as companies expanding toward serving more services, they seek potential pay-off at the end. For instance, as Spotify is investing in lots more features, its success would be immense if the new features prove to be as popular as its core product.
Specialization increase perceived values
On the other hand, specialization eCommerce platforms represent a different strategy that focuses on particular offerings, allowing businesses to deliver more efficient and extraordinary value services, which is a more realistic strategy. Consequently, such excellence in services allows fewer competitors into the market.
Vietnam’s leading eCommerce platforms
With the support of government, the Vietnamese eCommerce industry is roaring. In Vietnam, Shopee, Tiki, and Lazada are the most visited eCommerce platforms. The total visits for these three in 2020 almost reached 340M, leading Southeast Asia’s market through the global pandemic. Interestingly, all these top eCommerce platforms are all general commerce platforms.
Weighing for your business operation
While the debate continues, it is essential to identify which strategy allows your business model to shine. Besides opportunities, there are drawbacks for each of the systems. In short, generalization decreases efficiency due to the spread of resources to different niches; specialization equals putting all eggs in one basket.
In conclusion, no matter what strategy you tailor for your corporation, how you want customers to perceive your business is still the key to choose which approach is best for you.
At Metasource, we provide insight consulting services for market research and startup operations in Vietnam. Contact us at Metasouce to receive free consultant!
