Designing a digital marketplace for Viet Nam’s plastic recycling sector

EXECUTIVE SUMMARY

This technical paper outlines development strategies for the establishment of new and strengthening of existing online marketplaces to facilitate the trade of secondary materials in Viet Nam, with a particular emphasis on plastics. It provides a comprehensive mapping of Viet Nam’s plastic waste value chains and offers an in-depth analysis of the ecosystem, including the roles, practices and specific needs of key stakeholders, for establishing marketplaces that enable effective supplier-buyer connections. The paper further examines the legal framework, evaluates the current state of the recycling industry, and highlights the transformative potential of digital marketplaces. It concludes by presenting findings, including an ecosystem mapping and a needs assessment, to support the development of these marketplaces moving forward; contributing to the emergence of a circular economy for plastics in Viet Nam and addressing the need to establish and promote marketplaces for secondary materials.

KEY FINDINGS 

• Key policy drivers: Decree No. 40/2019/ND-CP (previously) and Decree No. 08/2022/ND-CP (further amended by Decree No. 05/2025/ND-CP) have stringently restricted the import of plastic scrap. These regulations limit imports to production needs, gradually reduce import allowances (with a target of sourcing 20% domestically by 2025), and are phasing out certain types of scrap imports entirely. Effective since January 1, 2022, the Extended Producer Responsibility (EPR) policy places responsibility on manufacturers and importers for the end-of-life management of their products and packaging. Furthermore, the Global Plastics Treaty, which promotes a circular economy for plastics through principles such as design for recycling, increased use of recycled content, and the importance of EPR schemes, aligns with Viet Nam’s domestic policy direction and further reinforces the commitment to developing a sustainable and circular plastic economy. This policy shift necessitates a robust strengthening of Viet Nam’s domestic collection, sorting, and processing infrastructure and is fundamentally reshaping the industry towards more formalized, transparent, and sustainable practices as recyclers actively seek reliable, high-quality domestic feedstock to meet evolving regulatory demands in Viet Nam.
• Recycled plastics ecosystem characteristics: Viet Nam’s plastic recycling market constitutes a complex and fragmented landscape heavily influenced by informal operations. A multitude of stakeholders, from individual collectors and junk shops to larger aggregators and recyclers, engage in intricate and often localized trading activities built on longstanding relationships and trust. This highly competitive sector is characterized by small-scale businesses and a lack of organizational and operational transparency. While formal waste management systems exist in urban areas, a significant parallel network of informal actors plays a crucial role in collecting and channeling recyclable materials through a fragmented value chain. High demand and rising scrap prices currently favor waste suppliers, creating a power imbalance.
• Material and current trading practices: The most commonly recycled plastics are HDPE, PP, and LDPE, followed by PET. A strong reliance on domestic sources is evident, with 94% of recyclers using Vietnamese waste; nearly half of these (approximately 47%) rely exclusively on domestic sources. Material sourcing is largely localized, with nearly half of all recyclers (46%) sourcing over 80% of their waste from within their own province, and nearly 96% sourcing from their own or surrounding provinces. Trading practices are characterized by established, trust-based relationships and long-term partnerships, often facilitated through direct site visits and industry recommendations. While recyclers deal with numerous suppliers daily, informal Facebook/Zalo groups have also emerged as informal marketplaces, though they typically lack detailed material specifications and transaction security.
• Interest in and need from marketplaces: There is significant interest in the development of secondary raw material marketplaces within Viet Nam’s plastic recycling sector, particularly among formal recyclers (40% interested, 36% considering) and a majority of informal recyclers (57%). This interest is primarily driven by the anticipation of improved access to a broader customer base (71% expressing high or very high expectations) and a more diverse range of suppliers (64% expecting improvement). However, despite this enthusiasm, there is a prevailing skepticism towards online trading platforms rooted in concerns about reliability, the potential for fraud, and the inability to physically assess the quality of scrap materials. For a marketplace to gain traction, it must prioritize “confidentiality and secure payment” (identified as crucial by over 60% of recyclers and scrap traders), while also recognizing the continued importance of allowing for “direct negotiation between parties” to build trust and facilitate fair transactions.
• Formalization barriers and needs: Formalization levels within Viet Nam’s plastic recycling sector exhibit a clear divide, with formal recyclers showing significantly higher rates of association membership (55%) and awareness of EPR regulations (69%) compared to informal recyclers (0% membership reported) and scrap traders (0% membership reported, 27% EPR awareness). A critical barrier to broader formalization and EPR compliance is the “invoice gap,” as informal waste aggregators and collectors often cannot provide the necessary invoices required by formal recyclers for documentation purposes.

The Technical Paper was conducted under the Pilot Project Marketplace for Secondary Materials implemented by UNDP Viet Nam. This measure is funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) and supported by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.