Three Notable Economic Factors in 2020

Recently, economists at the Conference Board Global Economic Outlook 2020 in New York pointed out the global economy would recover with a growth of 2.5 per cent and current trends would keep developing next year. The Vietnamese and Canadian economy could potentially be impacted by these global trends.

1.Gen Z – golden customer group of all sectors.

According to a Statistics Canada report in 2017, Gen Z (people born starting in 1996) accounted for 17.6 per cent of the total Canadian population and they accounted for 25 per cent in Vietnam. A report on nielsen.com says Gen Z is the future workforce as and will motivate social change in the world. In 2020, the oldest of this customer group will be 24 years old. At this age, they tend to get financial independence and make more purchasing decisions to fulfill their personal needs and interests. Also, the need to interact on social media among this golden group is enormous. According to VidMob’s survey in May 2018, 59 per cent of Gen Z spends more time on YouTube than they did in the prior year.

Gen Z frequently appears on the Internet and social media. They prefer using a smartphone to a laptop for receiving information and interacting. For example, Tiktok, launched in September 2016, has had tremendous growth in recent years, with more than 500 million users worldwide. The report Digital 2019: Q4 Global Digital Statshot on datareportal.com mentioned that this app placed sixth on the mobile app rankings by monthly active users, surpassing LinkedIn, Twitter, Pinterest, and Snapchat. Even though there is controversy related to personal data handles and safety issues with this app, there is no denying the success of TikTok as a new social media platform embraced by Gen Z.

Therefore, advertising on mobile platforms, developing applications, enhancing interactive functions, and applying quick trends for marketing campaigns and limited products or services, will be the priority for business going forward.

2.E-commerce might dominate the market.

Accompanying the rapid development of social media, and blockchain and mobile applications, e-commerce is experiencing continuous growth. In the article Future of Ecommerce in 2019: 10 International Growth Trends, published on beeketing.com, a new study showed that e-commerce sales would increase 265 per cent, from $1.3 trillion USD (2014) to $4.9 trillion USD (2021). This growth could create massive changes in the market and make business firms consider shifting from traditional stores to online sites.

In Vietnam, there has been fierce competition with discounts and other marketing tactics from popular e-commerce firms such as Lazada, Shoppee, and Tiki. These are top-of-mind brands with a wide range of products, including consumer goods, electronics, and tourism. This industry is gradually gaining new brands with a focus on niche segments. Leflair, a new e-commerce site, is dedicated to customers who love famous brands.

Meanwhile, Canada Ecommerce 2019, published in June 2019 on emarketer.com, stated that consumers would spend 64.56 million CAD for retail e-commerce in 2019. This number grew by 21.1 per cent compared to last year and accounted for 10 per cent of the total retail income.

Besides online shopping, fast delivery service is also notable. Generally, most consumers want to receive their orders immediately. Therefore, express delivery is a piece of cake that attracts many firms. Some popular delivering companies in Vietnam include DeliveryNow, 365 Express, Giaohangnhanh, Giaohangtietkiem, GrabExpress and Go Delivery. In Canada, Amazon continues to reign e-commerce but other fast delivery services focus on food and beverage sectors. Besides familiar names such as Skip The Dishes, DoorDash or Uber Eats, fast food brands such as McDonald’s, Tim Hortons, A&W, Starbucks and Subway invest in their own applications to enhance ordering and delivery.

3.Types of mobile payment

Following the boom of online shopping is the development of e-wallets. In Vietnam, these include Momo and Zalo Pay, along with more than 21 other companies that are scrambling for this “fascinating pie.” Today, e-wallet is a minority compared to 90 per cent of cash transactions, but due to promotions and convenience this type of payment is gradually convincing Vietnamese to change their payment methods.

Unlike developed countries such as Canada, where people are familiar with Mastercard or Visa, the biggest problem of the Vietnamese e-commerce business industry is that people rarely own these cards. In Vietnam, stores are charged about three per cent per transaction. For Vietnamese owners, this expense is hard to accept. Also, setting up a card reader is troublesome for businesses in Vietnam.

Mobile payment methods on smartphones could solve those problems effectively. With the increase of smartphone users and developing 4G, payments made on phones will be an inevitable result. One of the most popular payment methods by phone for Vietnamese is to scan QR Pay. This type of payment is easy, modern and secure for users. It is also a booming trend in this country. Other apps loved by Vietnamese are Momo and Zalo Pay with more than 8,000 dealing locations and 1,000 places accepting payments respectively.

In Canada, mobile payments are also popular for young people. One of the most popular mobile payments is Apple Pay, with about 383 million users worldwide (Apple Pay – Statistics & Facts, 2019). Other popular apps include Google Pay, Samsung Pay, Paypal, Starbucks Canada, Alipay, UnionPay and WeChat Pay.

Focusing on the golden Gen Z group, the rise of e-commerce and the convenience of mobile payments are leading new business trends in 2020.

Ryan Hoang

This content is also available in: Tiếng Việt

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