Vietnam Express Delivery Market Outlook to 2030

Vietnam Express Delivery Market Overview

• The Vietnam express delivery market reached USD 1.1 billion in 2023, reflecting a Compound Annual Growth Rate (CAGR) of 6.5% from 2018 to 2023. Key growth drivers include the rise in e-commerce, improved logistics infrastructure, increased urbanization, and supportive government policies aimed at enhancing the country's transportation and delivery systems.
• Major players in the market include Viettel Post, Vietnam Post, Giao Hang Nhanh (GHN), and J&T Express. These companies dominate the market due to their extensive logistics networks, technological integration, and customer-centric services.
• In 2023, J&T Express topped Vietnam's delivery service quality assessment. In 2023 with a 100% on-time delivery rate. The company also achieved a 6.5% reduction in average parcel delivery time in Southeast Asia compared to the previous year.

Vietnam Express Delivery Market Analysis

• Vietnam’s urban population has been rising steadily, reaching 37 million in 2022. This demographic shift is like the movement of people towards city lights, contributing to the heightened demand for fast and efficient delivery services. The increasing disposable income of urban residents, which rose by USD 3000 in 2022, has also led to higher spending on online purchases, further boosting the express delivery market.
• The express delivery market's expansion has led to increased competition, driving companies to innovate and improve service quality. This growth has also resulted in job creation and the development of supporting industries such as packaging and warehousing.
• The Ho Chi Minh City region is particularly dominant in the express delivery market due to its status as a commercial hub with high e-commerce activity. The region's well-developed infrastructure and large consumer base make it a key area for express delivery services.

Vietnam Express Delivery Market Segmentation

By Delivery Type: In 2023, the Vietnam Express Delivery Market is segmented by delivery type into same- day, next- day, standard and economy. Same-day delivery dominates this segment. With consumers and businesses increasingly expecting faster turnaround times, same-day delivery addresses the need for quick fulfillment of orders placed through e-commerce platforms and online retail. This segment is bolstered by the rise in instant gratification expectations among consumers.

By Customer Type: In 2023, the Vietnam Express Delivery Market is segmented by customer type into B2B, B2C and C2C. B2B dominates this segment. Businesses rely heavily on express delivery for supply chain management, inventory restocking, and meeting production deadlines. The need for seamless integration into business operations and customer satisfaction drives the dominance of B2B in the market.

By Service Type: In 2023, Vietnam Express Delivery is segmented by service type which is divided into parcel, document, freight and value-added. Parcel delivery services dominate due to the exponential growth of e-commerce and online retail sales. As more consumers opt for online shopping, the demand for parcel deliveries, which typically include small to medium-sized packages, has surged. Companies specializing in parcel delivery benefit from the sheer volume of shipments generated by the e-commerce sector, where fast and efficient delivery is crucial to customer satisfaction and retention.

Vietnam Express Delivery Market Competitive Landscape

• The market is Dominated by Viettel Post, VNPost, GHN, Best Inc., and J&T Express, the Vietnam express delivery market is marked by continuous network expansion and service enhancement. These leading companies set high standards in quality and speed, driving the market toward better performance and increased customer satisfaction.
• GHN launched its first fully automated goods sorting system in Hanoi, with a capacity of 30,000 orders per hour. The system was the first of its kind in Vietnam. GHN has 10 manual sorting warehouses and 2 auto sorting warehouses with the highest maximum capacity in Vietnam.
• Viettel Post has introduced an AI-powered route optimization system, which has substantially reduced delivery times and operational costs. This advanced technology optimizes delivery routes, improves efficiency, and sets a new benchmark for service standards in the express delivery market.

Vietnam Express Delivery Industry Analysis

Vietnam Express Delivery Market Growth Drivers

• Urbanization and Consumer Preferences: Vietnam’s urban population increased from 33.1 million in 2018 to 37.5 million in 2022, contributing to the heightened demand for efficient delivery services. Urban consumers, with higher disposable incomes, spent more on online purchases, driving the express delivery market. The annual spending per capita in urban areas reached USD 2,900, indicating a strong market for fast and reliable delivery services.
• Technological Advancements: Technological innovations have significantly improved the efficiency of express delivery services in Vietnam. GHN's investment in automated sorting centers increased their processing capacity to handle 300,000 parcels per day, reducing delivery times. Viettel Post's AI-powered route optimization system reduced delivery times by an average of 15 minutes per delivery, enhancing overall efficiency and customer satisfaction.

Vietnam Express Delivery Market Challenges

• Regulatory and Customs Procedures: The complexity and inefficiency of customs procedures pose a significant challenge for the express delivery market. The average time to clear exports through customs is 5.7 days, according to the World Bank. This is longer compared to regional peers, hindering the efficiency of delivery services and increasing operational costs for logistics companies.
• Infrastructure Constraints: Vietnam’s logistics infrastructure, despite improvements, still faces challenges. The country ranks 77th out of 141 in infrastructure quality according to the Global Competitiveness Report 2022. Poor road conditions and inadequate transportation networks can lead to delays and increased costs, affecting the reliability of express delivery services, particularly in rural and remote areas.

Vietnam Express Delivery Market Government Initiatives

• Logistics Development Plan: The Logistics Development Plan focuses on modernizing Vietnam’s logistics infrastructure. The government has allocated USD 5 billion for the construction of new highways, ports, and logistics centers, which are crucial for efficient express delivery services. The plan aims to enhance the country's logistics capabilities and support economic growth.
• Green Growth Strategy: The Vietnamese government’s Green Growth Strategy aims to promote sustainable development and reduce environmental impact. The strategy includes incentives for logistics companies to adopt green technologies, such as electric vehicles and renewable energy sources.

Vietnam Express Delivery Industry Future Outlook

By 2028 the Vietnam express delivery market is expected to continue its growth, driven by the expansion of e-commerce and advancements in logistics technology.

Future Trends

• Expansion of Cross-Border E-commerce Cross-border e-commerce is becoming increasingly popular in Vietnam, with consumers frequently purchasing goods from international online marketplaces. The Vietnam E-commerce Development Strategy aims to increase cross-border e-commerce transactions by 2025. Companies are investing in international logistics networks and partnerships to facilitate faster and more reliable cross-border deliveries.
• Adoption of Green Logistics There is a growing trend towards sustainable logistics practices in Vietnam. VNPost has introduced 500 electric delivery bikes, aiming to reduce carbon emissions significantly. The push towards green logistics is driven by regulatory pressures, as the Vietnamese government targets a reduction of 10 million metric tons of CO2 by 2030 under the Paris Agreement.