A homegrown messaging app has emerged as Vietnam’s growing e-commerce scene superstar. Established just under a decade ago, Zalo first staked its claim as local competition to established instant messaging brands Facebook and WhatsApp.
But as the platform has grown, so has its profile. Today, Zalo has attained “super app” status, with a nucleus of lifestyle-focused services centered around social, payments, and easy online shopping.
If you’re looking to start an e-commerce store in Vietnam or want to expand your business into the country, it’s well worth considering how Zalo can facilitate those ambitions. This detailed guide explains all you should know, from what the platform does to how it supports digital selling in Vietnam.
Overview of Zalo
Zalo is a Vietnam-based social messaging platform owned by VNG Corporation. The social app, whose name exemplifies the laidback nature of the platform, is Vietnam’s favorite messaging app, used by tens of millions in the country and over 100 million globally.1
Zalo’s name is a play on “alo,” an informal way that Vietnamese say “hello,” and “Zing,” one of the app’s parent company’s popular services. While the messaging service was only introduced in 2012, it quickly gained favor as a locally-relevant alternative to big-name brands like WhatsApp and Facebook.
Unlike its competitors, Zalo was “built by locals, for locals.” The app’s creator, Vuong Quang Khai, designed Zalo to work well on the low-end smartphones and 3G internet service typical in Vietnam. The app was also developed in Vietnamese, meaning it provides rich language context and can recommend fun stickers as one chat in the local language.2 Although English users can also enjoy Zalo.
Everyone is on Zalo, from government agencies and large corporations to individuals and small businesses. Some of the popular features through which individuals interact with one another and business organizations through Zalo include:
- Zalo Official Account: Akin to a “verified” Twitter account, a Zalo Official Account displays an authentic connection to a business or agency. Brands and organizations wishing to conduct business or interact with the public can do so via an official account.
- Zalo Shop: Zalo Shop is an e-commerce marketplace where people in Vietnam can go to buy products of all types. Zalo Shop integrates with local fulfillment service providers like BoxMe and Shipchung to help sellers meet buyers’ needs and ensure satisfaction.
- ZaloPay: Customers and users of the Zalo platform in Vietnam can use ZaloPay to make and receive payments. The contactless payment solution offers incredible ease and access to customers, especially when used alongside Zalo Shop.
- Zalo Bank: Users of the platform can obtain micro-loans and enjoy increased financial access through Zalo Bank.
These features, alongside others like Zalo Diary, which provides a daily feed of captivating information for users, and Zalo Connect, which helped people find assistance during COVID, have catapulted Zalo to super app status. Consequently, it’s unsurprising that Zalo was ranked one of the top 3 most used social apps in Vietnam in 2021.3
Amongst the Vietnamese population of 61.3 million smartphone users, 80% use Zalo4 and combine to send 1.7 billion daily messages.5 As of 2021, the platform reported over 60 million active users, and Zalo itself was declared Vietnam’s first ever unicorn (worth over $1 billion) in 2019.6
Why use Zalo for business?
Zalo is great for business because of its extensive reach and popularity with Vietnamese people. So whether you’re looking to start or expand a business in the country of 98 million, you’re unlikely to find a better partner to reach millions in Vietnam.
Here are some other reasons why Zalo for business could be a great deal.
- Broad customer base: Although its customer base may not seem like much compared to Facebook’s billions, Zalo is the bigger product in Vietnam. As the Zalo official website reports, sellers on Zalo Shop have a potential market of 100 million plus,1 covering users in Vietnam and neighboring countries.
- Drive business engagement: Zalo’s broad user base isn’t just about the numbers. Users are frequently very active on the platform, and as Zalo reports, businesses listed on Zalo Shop saw customer interest increase between 10-20x.1 Likewise, those businesses reported product inquiries from prospective customers increased by 18-30x.1
- Convenient and easy to use: Zalo fully captures the imagination of Vietnamese locals; they can’t seem to get enough of how fun and easy to use the platform is. According to statistics from Statista, 79% of users of the platform say online shopping on Zalo is convenient, and 78% find it easy to use.7 At the same time, 48% say Zalo shopping is trustworthy, and 41% say goods on the platform arrive quickly.7
- Leverage transactional features: With its super app profile and transactional features, it’s easy to conclude that Zalo was made to facilitate smooth business. On the same platform, e-commerce sellers and customers can use Zalo Shop for great products and ZaloPay for seamless payments.
- Grow with the platform: While Zalo has enjoyed meteoric growth in just over ten years of operation, the platform shows no signs of stopping. For instance, VNG Corporation recently invested $6 million in local B2B gifting platform Got It.8 With the investment, Zalo will potentially see expanded gifting and merchant networks on its mobile payment services.
Consequently, Zalo presents an interesting and potentially beneficial online sales partner for local and foreign businesses looking to sell in Vietnam. In the next section, we will discuss what e-commerce sellers should know about starting a business on Zalo and the key steps.
How to start a business on Zalo?
Starting a business on Zalo is easy and seamless. Whether you’re a local entrepreneur or an overseas seller just entering the Vietnam market, it’s straightforward to open an online store on Zalo Shop. We’ll explain how below.
But before launching into how to start a business on Zalo Shop, it’s worth learning how the platform works. VNG Corporation released Zalo Shop in 2016 as an online marketplace for purchasing and selling goods. The marketplace adds an e-commerce component to Zalo’s social media component, and sales happen in the same social format.
Zalo users interact with online stores on Zalo Shop in two main ways: by searching for specific stores using the search function or clicking a product ad or other content from an official account on the platform.
Online stores are required to open a Zalo Official Account, which is the equivalent of a business page on Facebook. Through the official account, e-commerce sellers can create catalogs, upload products, and seek engagement with potential customers through Zalo Ads, customers’ Zalo Diary feeds, and subscription content delivered directly to customers.
While Zalo allows sellers to trade in a wide variety of products on its platform, there are limits to what you can sell. Counterfeit goods, banned substances, and services that infringe on another’s intellectual property are examples of things you cannot sell on Zalo Shop.
On the other hand, it’s common to see stores sell products like dietary supplements, specialty medication, cosmetics, and handmade items on the platform.
To open your store and start selling on Zalo Shop, you’ll need to verify your business and the services you provide. We’ll cover how this works in the steps to starting a business on Zalo, which we’re discussing next.
Starting a Zalo business – For local sellers
Being a local seller means you live in Vietnam or have an active business presence there. If you fall within this category, you’ll find the following steps valuable in creating an online store on Zalo.
Step 1: Open a personal account
Opening your Zalo Shop online store begins with creating a personal account. That’s because you cannot proceed to open an official account without first having a personal account. Go to zalo.me or download the mobile app to begin the process of creating your free account.
Please note that you’ll need to provide a Vietnamese phone number (+84) to open the account. Aside from this, you will also be required to provide other details such as a name, contact details, and more. Follow the instructions on the Zalo website or mobile app.
Step 2: Create an official account
Once you’ve created your account, you can begin the process of opening a Zalo Official Account. First, log in to your personal account and go to the Zalo Official Account management portal. Next, click “Create a new Official Account” and select the type of official account you wish to create.
Zalo supports three official account types:
- Enterprise accounts: Accounts of this nature are for businesses and brands looking to sell to customers or interact with them.
- Content accounts: Press agencies, artists, and creators use content accounts to reach their audience.
- State accounts: The platform provides these accounts for state agencies and public administrative bodies.
You’ll be prompted to provide information to the platform, such as the official account name, description, contact details, and the nature of your business. You’ll also need to provide a cover photo and avatar.
Step 3: Create a product catalog
After successfully creating your official account, you’ll move next to populating your store with choice products. Create a product catalog by clicking on “Store Setup” in your official account and selecting “Catalog,” then “Add Catalog.”
You have the option to create several product categories, which is great if you plan to sell multiple product types. Provide the required information and click “Agree” to conclude.
Step 4: Upload and display products
Next up, you’ll add products to the categories you’ve created. Click on the “Product” tab and select “More Products” to start uploading products. You’ll be prompted to provide product details such as the name of each item, price, description, and relevant photos.
Be sure to comply with the platform’s requirements as to image number and size and character limits for product descriptions. After supplying all the details, click “Create Product” to conclude.
To display the goods, go to “List of Products,” click on “Manage,” and then “Product Information.” You’ll be asked to scan a QR code, and afterward, you’ll see the product information page. Scroll to “Store” and then tick “Display.” Click “Agree” on the prompt that appears, and that’s it. Your products are now live.
Step 5: Market your goods
With your Zalo Shop online store and products published, it’s time to spread the word about your store. You can start by sharing your product catalog with friends or your other contacts on the platform.
Additionally, you can explore digital marketing techniques, including Zalo Ads, to increase the reach of your products and attract attention from potential customers.
Starting a Zalo business – For overseas sellers
As an overseas seller, you either do not have any presence in the Vietnam market or are planning to trade in the country for the first time. While starting a business on Zalo Shop involves much the same procedure as that required for local sellers, there are other considerations you should note.
Here are the key steps to opening a Zalo Store as an overseas seller.
Step 1: Maintain local presence
To open your Zalo Shop online store, you may be required to partner with a local agent or open a local business. This is because, as mentioned above, opening a Zalo account requires a Vietnam phone number. In addition, you’ll need to provide a local ID for verification during the official account opening process.
As a result, you should consider registering a local business to manage your Vietnam interests or partnering with a local agent if you’re not minded to bear the costs of a local branch in Vietnam.
Step 2: Business registration
If you’re choosing to register a local business in Vietnam, you’ll need to register with the Vietnam Ministry of Industry and Trade.9 People seeking to open an e-commerce business in the country will need to obtain:10
- Investment registration certificate
- Enterprise registration certificate
- Trading license (if you want to sell directly to customers)
- Website registration
You may also be required to obtain necessary approvals from the Vietnam Ministry of Planning and Investment.11
Step 3: Open the official account
When you’ve completed the steps to register your Vietnam business, or if you’re choosing to work with a local agent, you’ll proceed next to opening your Zalo Official Account.
Follow the steps outlined above to register your official account, including starting with a personal account and then providing all the details needed to open an official account. Next, create your product catalog and upload the goods you wish to sell on Zalo.
Step 4: Connect with customers
Lastly, you should have a plan not only to reach customers but also satisfactorily meet their e-commerce needs. For instance, clarify if your products are available in Vietnam or need to be shipped from overseas. Goods imported from overseas may take longer to deliver, and your customers must be aware of this.
Remember that Zalo is successful primarily because it adapts excellently to local preferences and lifestyles. If your store also aims to provide international goods with a great local experience, you’ll find buyers that want to shop with you.
6 tips for a successful business on Zalo
With the information we’ve shared, you’re in good shape to start laying concrete plans for your business presence on Zalo.
As you start your Zalo business, keep in mind that success depends on knowing your customers and finding the best ways to give them excellent service. While that can sometimes mean adopting service standards and measures that help you meet customer needs, it can also involve playing by Zalo rules to ensure your store remains in good standing.
Here are a few tips that can help.
1. Zalo chatbot
If you’re not already aware, chatbots can be a game changer for your online store. As statistics indicate, chatbots can help automate many customer interactions and handle up to 80% of standard customer questions.12 Zalo supports chatbot integration through its Zalo for Developers interface.
2. Zalo ads
Ads are a core part of selling on any platform, and Zalo is no different. The app provides a dedicated ad service that lets businesses target customers with videos, articles, promos, and other content through their mobile devices. Even better, you can employ Zalo ads to funnel traffic to your e-commerce website, thereby creating organic growth for your business.
3. Gift giving
Vietnam has a robust gift-giving culture, especially around holidays such as Tet. So if you’re looking for a way to hit the ground running with your customers in the country, giving a simple holiday gift can be a way to stand out. It doesn’t have to be anything elaborate – but it should be something your customers would appreciate.
4. Zalo rules
As you explore the app and strategize on how to get your business running, be careful to stay within the rules. While Zalo does not have many strict platform rules, there are a few you should be aware of. For instance, while Zalo allows you to send messages to customers outside Vietnam with its Zalo Notification Service, all messages must abide by the rules.13
You cannot send messages to such customers without their express consent unless you notify them beforehand about the message. Likewise, you can send limited message types with ZNS, and the rules limit businesses to one message per transaction.
5. Superstitious periods
We’ve mentioned that culture is a big deal in Vietnam. Part of that culture revolves around respect for certain periods deemed significant within the local environment. For instance, it is the practice in Vietnam to avoid making big decisions or starting significant business ventures during the 7th lunar month (July).
So, learn the local culture and transact with your customers with an understanding and respect for their beliefs.
6. Vietnamese business consultants
Lastly, seeing as transacting in Vietnam as an overseas seller can involve many nuances that are not readily apparent, it might be beneficial to work with a local consultant who knows the culture and environment. This might be extra important if you plan to conduct B2B sales, as you would be working directly with CEOs and managers of potential client businesses.
Ultimately, if you’re planning to get a fast start in the Vietnamese e-commerce market, Zalo can provide an easy route to a mammoth customer base and broad engagement. And with the steps we’ve explained here on how to start a business on Zalo, you have the tools to make a profitable entry into Vietnam.
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