VinVentures: Vietnam's E-commerce Duopoly - TikTok Shop Rapidly Closing Gap with Shopee at Hyper-Growth Pace

Ebrun Exclusive: On January 15, investment firm VinVentures released its 'Vietnam Technology and Venture Capital Outlook 2025' report. The analysis indicates that competition among leading e-commerce platforms in Vietnam will intensify further in 2025, with TikTok Shop rapidly closing the gap with traditional market leader Shopee at an astonishing growth rate.

Data shows that in the third quarter of 2025, Shopee maintained its leading position with a 56% market share, but its revenue growth slowed to just 4% year-over-year. Analysts suggest this slowdown reflects market saturation challenges facing traditional marketplace e-commerce models amid intensified competition and rising costs.

In contrast, TikTok Shop achieved robust 69% year-over-year revenue growth, expanding its market share from 30% to 41%. The report attributes its core growth driver to the 'entertainment commerce' model - deeply integrating shopping with entertainment experiences through massive content supply.

Among other platforms, Lazada maintained a stable 3% market share, while Tiki continued its decline with an 80% revenue drop despite cumulative investments of approximately $670 million.

Seller dynamics more clearly illustrate the shift in growth momentum. In the first half of 2025, TikTok Shop's merchant count surged 96% to 267,000, while Shopee's active sellers declined 32% to approximately 210,000 - meaning Shopee lost about one-third of its seller base.

Regarding average transaction value (ATV), TikTok Shop saw a 10% year-over-year increase to approximately 130,000 VND (about $4.95) per item, indicating the platform's transition from ultra-low-price and trend-driven products toward higher-quality branded goods.

Shopee's ATV decreased 7.2% to about 107,000 VND (approximately $4.07), further consolidating its position as a value-oriented platform.

The top-performing categories by e-commerce GMV in Q3 2025 were beauty products (approximately $674 million), home and living ($525 million), and women's fashion ($460 million).

VinVentures notes that 'entertainment commerce' is becoming the industry's new normal, with major platforms and brands increasingly embracing live streaming and short-video commerce following TikTok's success.

Beyond market competition, regulatory changes are reshaping the landscape. Starting July 1, 2025, Vietnamese e-commerce platforms must withhold and remit taxes - collecting 1% VAT and 0.5% personal income tax on sales by individuals and household businesses.

This policy effectively transforms e-commerce platforms into 'tax collection points.' While helping numerous small businesses transition from informal operations to compliance, platforms face cost pressures from payment system upgrades, seller categorization, and complex reporting requirements.

VinVentures predicts a more transparent and standardized regulatory environment ahead, though higher compliance thresholds may create challenges for social commerce merchants.

Additionally, large platforms and well-funded D2C brands are likely to leverage AI to boost productivity and reduce costs by 10-30%. Smaller players slow to adopt AI technology may struggle to maintain competitiveness in cost and operational efficiency.

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