Report Overview

Thriving e-commerce industry in the country and a growing number of young people make them an ideal group for embracing buy now and pay later (BNPL) and rising appeal of being able to buy big-ticket items without immediate payments are projected to propel the expansion of the Vietnam Buy Now Pay Later (BNPL) Services Market during the forecast period between 2023 and 2029.

Vietnam Buy Now Pay Later (BNPL) Services Market - Industry Trends & Forecast Report, 2029

Vietnam buy now pay later (BNPL) services market size was estimated at USD 1,715.34 million in 2022. During the forecast period between 2023 and 2029, the size of Vietnam buy now pay later (BNPL) services market is projected to grow at a CAGR of 33% reaching a value of USD 12,627.32 million by 2029. Major growth drivers for the Vietnam buy now pay later (BNPL) services market include the rising middle-class population and increasing consumer demand for flexible payment options. The low rate of credit card use in Vietnam, with only about 5–6% of the population owning a credit card, creates an opportunity for alternative payment methods like BNPL to gain popularity. This is driven by the concurrent expansion of the middle-class and a burgeoning demand for versatile payment choices among consumers, which BNPL services are expected to satisfy. Notably, as Vietnam's e-commerce sector experiences rapid growth, having reached USD 14 billion in 2022 and showing continued promise, BNPL emerges as a vital payment solution for the predominantly non-credit-card-using online shopper population. The surging adoption of mobile payments, with an 85% surge in volume and a 31% rise in value, fosters an environment conducive to BNPL services, renowned for their user-friendly, mobile-accessible payment process. Also, the establishment of diverse partnerships within the BNPL ecosystem, involving e-commerce platforms, financial institutions, and fintech firms, further fuels the widespread adoption of BNPL solutions. Additionally, retailers stand to benefit significantly from the BNPL model, enjoying advantages such as heightened purchase conversion rates and increased average order values, ultimately bolstering their sales figures. Thus, such aspects are expected to drive the growth of the Vietnam buy now pay later (BNPL) services market during the forecast period.

Vietnam Buy Now Pay Later (BNPL) Services Market – Overview

The Buy Now Pay Later (BNPL) service has become increasingly familiar to Vietnamese consumers, especially among tech-savvy and financially proactive young shoppers. This payment solution allows buyers to make immediate purchases and subsequently spread the payments over several months, a flexibility that caters to both the product's cost and the buyer's financial capacity. Currently, in the global BNPL market, major players include Klarna, Afterpay, and Affirm, boasting millions of users and facilitating countless transactions each year. Klarna, a Swedish BNPL company, stands out as the industry leader, reporting a remarkable Gross Merchandise Value (GMV) of USD 53 billion, a figure roughly five times that of its closest competitor, the American firm Afterpay. It is essential to distinguish BNPL from traditional credit services. While both offer deferred payments, BNPL doesn't rely on creditworthiness and features a predetermined payment schedule. This makes BNPL particularly attractive to individuals without credit cards, as loan approvals are nearly instantaneous. Beyond credit, BNPL prioritizes shopping convenience. Unlike traditional installment payment processes that demand extensive documentation, BNPL providers offer a streamlined, tech-driven registration process, enhancing the advantages of digital technology for consumers. This underscores BNPL's appeal as a user-friendly and accessible financial solution.

Vietnam Buy Now Pay Later (BNPL) Services Market

Growth Drivers

Booming E-commerce Sector in Vietnam

In Vietnam, despite not ranking among the world's largest, the e-commerce sector has experienced remarkable growth in recent years, primarily attributed to the increasing internet penetration rates across the nation. This surge in the Vietnamese e-commerce industry is expected to persist in the next two quarters, with sales and revenue projected to surpass 2020 figures. Consequently, this burgeoning e-commerce landscape is poised to catalyze the expansion of buy now pay later (BNPL) payment options. The BNPL sector in Vietnam is still in its nascent stage, prompting domestic BNPL startups to actively seek funding for their market expansion strategies. They aim to seize the first-mover advantage in a market expected to burgeon over the coming years. Additionally, Vietnamese BNPL startups are gearing up to compete with well-established global FinTech companies by securing funding. For instance, Fundiin, a Vietnamese BNPL startup, which, in March 2021, secured an undisclosed amount of funding to expand its footprint in the thriving Vietnamese market, enabling more merchants to offer its services to consumers nationwide.

Restraints

Economic Instability or Recessions

Economic instability or recessions can significantly hinder the growth of the Vietnam buy now pay later (BNPL) services market. During such periods, consumers often become more cautious with their spending and may prefer traditional payment methods over BNPL options. Additionally, lenders and investors may become more risk-averse, leading to reduced funding for BNPL startups and limiting their ability to offer competitive terms and expand their services. Furthermore, economic downturns can result in increased default rates on BNPL payments, affecting the profitability of service providers. Therefore, economic instability and recessions pose substantial challenges to the growth and stability of the BNPL market in Vietnam.

Impact of COVID-19 on Vietnam Buy Now Pay Later (BNPL) Services Market

COVID-19 pandemic had a mixed impact on the Vietnam buy now pay later (BNPL) services market. Temporary closures of brick-and-mortar stores, coupled with an extended period of consumers staying at home, triggered a significant shift. Despite a pre-existing upward trajectory, BNPL plans gained substantial momentum during the pandemic, especially as e-commerce surged. According to Worldpay, in 2020, BNPL accounted for 2.1% of global e-commerce transactions, equivalent to about USD 97 billion. Projections suggest this figure will double to 4.2% by 2024, ranking it fifth among preferred e-commerce payment methods. This growth reflects evolving consumer payment preferences, shaped by pandemic-induced retail dynamics. In Vietnam, BNPL was introduced in early 2019 but witnessed remarkable growth only after the pandemic's onset in late 2019. COVID-19 reshaped consumer behavior, favoring online shopping and positioning BNPL as an attractive financial solution for the population.

Vietnam Buy Now Pay Later (BNPL) Services Market

Segmental Coverage

Vietnam Buy Now Pay Later (BNPL) Services Market – By Channel

By channel, the Vietnam buy now pay later (BNPL) services market is bifurcated into Online and Point of Sale (PoS) segments. The online channel segment holds a higher share in the Vietnam buy now pay later (BNPL) services market by channel during the forecast period. The rapid expansion of e-commerce in Vietnam has driven a significant shift in consumer behavior towards online shopping. As a result, more consumers are opting for buy now pay later (BNPL) services as a convenient and flexible payment option when making online purchases. The digital commerce segment in Vietnam is projected to see substantial growth, with an estimated 70.9 million users expected by 2025. This growing digital commerce landscape further fuels the demand for BNPL services, as consumers seek accessible and user-friendly payment solutions for their online transactions. Also, BNPL offers advantages such as affordability and the absence of interest charges, making it an attractive choice for budget-conscious consumers. The convenience of spreading payments over time without incurring extra costs is a significant driver behind the preference for BNPL within the online channel.

Vietnam Buy Now Pay Later (BNPL) Services Market – By Enterprise Type

Based on enterprise type, the Vietnam buy now pay later (BNPL) services market is split into Large Enterprises and Small & Medium-sized Enterprises (SMEs) segments. The large enterprises segment held a higher market share during the enterprise type. Large enterprises typically possess substantial financial resources and established business operations. This financial stability enables them to explore and adopt various financial solutions, including buy now pay later (BNPL) services, to enhance their customer experience and drive sales. Notably, large enterprises often enjoy a broader customer base, which includes a significant online presence. This factor makes BNPL services an appealing option to offer their customers, as it caters to a wide range of consumers. From those making substantial purchases to those seeking flexible payment options, BNPL accommodates diverse needs. Also, large enterprises have the leverage to negotiate favorable terms and establish partnerships with BNPL service providers. This ability allows them to seamlessly integrate BNPL solutions into their existing infrastructure, enhancing the overall shopping experience for their customers and boosting sales.

Vietnam Buy Now Pay Later (BNPL) Services Market – By End User

Based on end user, the Vietnam buy now pay later (BNPL) services market is divided into Consumer Electronics, Fashion & Garment, Healthcare, Retail, and Media & Entertainment segments. The healthcare segment holds the highest share in the Vietnam buy now pay later (BNPL) services market by end user. Healthcare expenses can often be unexpected and significant, making BNPL an attractive option for individuals seeking flexible payment solutions for medical bills and treatments. The healthcare sector has been experiencing growth, with more consumers turning to healthcare services, and BNPL provides a convenient way to manage these expenses over time. Additionally, BNPL services in the healthcare sector may offer interest-free or low-interest payment plans, making it an appealing choice for budget-conscious patients. These factors collectively contribute to the dominance of the healthcare segment in BNPL usage.

Competitive Landscape

Major players operating in the Vietnam buy now pay later (BNPL) services market include FeCredit, Momo, Home Credit Vietnam, Tima, LOTTE Finance Vietnam, and Kredivo. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Scope of the Report

By Channel

• Online

• Point of Sale (PoS)

By Enterprise Type

• Large Enterprises

• Small & Medium-sized Enterprises (SMEs)

By End User

• Consumer Electronics

• Fashion & Garment

• Healthcare

• Retail

• Media & Entertainment