HCMC – The e-wallet market in Vietnam is witnessing the implications of rivalry amongst incumbents and new entrants, with an increased amount of consolidation across core market players, said RMIT University Finance lecturer Dr Seng Kiong Kok.
A pattern that is taking shape is less for investment via a new entry but rather investment directly into the ecosystem in which the core market players exist. Notably, Vietnamese payment app MoMo managed to raise US$200 million in a funding round amid the pandemic.
“Given how competitive the e-commerce landscape is currently, it does feel as though we are moving towards the creation of a super-app. There are calls from large e-commerce providers, such as Lazada, for greater integration of the marketplace invariably leading to fewer barriers across platforms,” said the RMIT representative.
This super-app dynamic is furthered by the fact that e-commerce and e-wallet platforms are essentially perfect substitutes of each other, allowing users to shift consumption with little consequence. Also, it is further established within the formation of strategic partnerships such as that between MoMo and Gojek – once again, an outcome of the increased competitive landscape. More strategic partnerships between e-wallet providers and on-demand multi-service platforms are expected to be established.
For e-wallet providers, the pandemic has been very timely in accelerating the development and adoption in the marketspace. The shift to online shopping due to pandemic-induced lockdowns and the encouragement for contactless transactions due to health and hygiene have favored e-wallet providers.
However, the downside is that e-wallets have not been able to internationalize their operations. These digital payment mechanisms, especially in Vietnam, are still very much localized or regionalized. A solution to this issue could be support for international bank accounts to connect with Vietnamese e-wallets, giving access to foreign users including expatriates who are more comfortable with foreign banks, and more importantly, inbound tourists whose spending could prove very profitable.
However, this international dimension could prove challenging in light of varied international regulatory standards, especially with consumer protection, he said.