The Fourth Industrial Revolution is taking place all over the world with a boom in digital technology, creating great opportunities but also challenges for the development of every country, business and person.
E-commerce has proven to be an increasingly useful tool for businesses to overcome challenges and seize opportunities (Illustration: VNA)
Vietnam’s digital economy has grown the fastest in ASEAN, around 38% per year, compared to an average of 33% in the region since 2015. The country expects the digital economy to account for 20 % of its GDP and at least 10% in each sector. .
Vietnam’s digital economy shows the fastest growth in the region
In a recent interview with Vietnam News Agency, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said local e-commerce is booming, playing an important role in the development economy as well as in the future of Vietnam’s digital economy. The development of e-commerce is an inevitable trend in the country, and the COVID-19 pandemic serves as a catalyst for this trend to advance faster and stronger.
Despite the adverse effects of the pandemic in 2020, e-commerce in Vietnam has still made great strides to become one of the fastest growing markets in Southeast Asia.
According to Vietnam’s E-Commerce White Paper, e-commerce grew by 18% in 2020 to $11.8 billion, making the country the only one in Southeast Asia to post a double-digit growth rate at this regard. Estimates from some of the world’s leading companies such as Google, Temasek and Bain & Company indicate that Vietnam’s digital economy is expected to surpass $52 billion and rank third in ASEAN by 2025.
Amid the resurgence of COVID-19 in 2021, e-commerce has proven to be an increasingly useful tool for businesses to overcome challenges and seize opportunities generated by new market demand. Local consumers are strongly shifting from traditional in-person shopping to the online method via electronic platforms.
A survey by the Ministry of Industry and Commerce showed Vietnam had 49.3 million online shoppers in 2020, up from 32.7 million in 2016.
Hanoi and Ho Chi Minh City are among the top cities in terms of digital economic development in the region. In HCM City alone, there are currently 567 e-commerce platforms, over 20,680 websites and 134 apps. Although the ongoing COVID-19 pandemic has hampered the flow of goods, many e-commerce platforms and websites are still showing rapid growth.
Thanks to the digital economy, business activities have become dynamic, from social media advertising (Facebook, Instagram), entertainment (Netflix, Pinterest), transport (Uber, Grab, GoViet) to wholesale and retail (Lazada, Shopee).
Vietnam has become one of the largest regional recipients of investment in companies operating on IT and Internet platforms such as MoMo, Sendo and Topica, helping to make it an attractive destination for domestic and foreign investors.
Cross-border e-commerce – useful distribution channel for businesses to expand market
E-commerce helps people buy items from international markets via the Internet and become “global consumers”. It also helps individuals and businesses showcase and deliver their products to international buyers.
Engaging in the online export and import system and cross-border e-commerce steps will create opportunities for Vietnamese companies to perfect their products, improve their capabilities and make Vietnamese brands popular with consumers around the world. whole world.
To help boost the sale of Vietnamese products through cross-border e-commerce, Vietnam’s Electronic Commerce and Digital Economy Agency (iDEA) has launched the Vietnam National Pavilion on JD.com, an international e-commerce platform. Its partners like Vinanutrifood, Viettel Post, VPBank and Visa also unveiled practical policies related to marketing, transportation and interest rates on loans to help Vietnamese manufacturers carry out this program.
The Ministry of Industry and Trade has developed and implemented a set of measures such as a certified electronic contract authority, a guaranteed payment infrastructure for e-commerce and an e-commerce product flow management platform , which will serve as important bases for the ministry to assist e-commerce platforms and enterprises using e-commerce, thereby facilitating the healthy, transparent and sustainable development of the market.
Talking about cross-border e-commerce, iDEA Director Dang Hoang Hai said it is relatively new for businesses in Vietnam, but also the start of a long journey with a lot of authorities and businesses to do.
He expressed his belief that with the joint efforts of the ministry and others, central agencies, localities and the business community, Vietnamese pavilions on foreign e-commerce platforms will soon be opened and will prove effective.
Highlighting the benefits of cross-border e-commerce, Nguyen Thi Diem Hang, Chairperson of the Board of Directors of Vietnam Organic Nutrition Food JSC (Vinanutrifood), said joining the national pavilion helps popularize Vietnam’s image and brand on the global market. It also helps Vietnamese companies to find export and import partners and build foreign consumer confidence in Vietnamese products.
Developing a healthy e-commerce market in Vietnam
Understanding the trends and best practices of digital transformation in commerce will help promote innovation in Vietnamese enterprises. On November 22, 2021, the Prime Minister issued a decision approving a plan for accelerating IT application and digital transformation in trade promotion during the period 2021 – 2030.
However, the Ministry’s Competition and Consumer Authority pointed out that the growth of e-commerce has also been accompanied by an increase in wrongdoing related to consumer interests. Data shows that there are approximately 500 to 2,000 consumer complaints each year, mostly about leaked buyer information and scams by sellers.
In order to create a legal framework for the protection of consumers in the e-commerce market, the government issued a decree which amended and supplemented another on e-commerce published in 2013.
According to the new decree, sellers must publish product information as well as related business licenses and certificates when doing business on e-commerce platforms. In addition, business activities on social networks like Facebook, Zalo and Instagram have also been placed under management.
The ASEAN Agreement on Electronic Commerce, signed in Hanoi on January 22, 2019 and taking effect on December 2 last year, established common principles and rules to facilitate the development of electronic commerce in the region and strengthen enforcement capacity.
The implementation of the agreement should help revive the regional economy in the post-pandemic period.
Vice Minister Tan said that amid the “new normal”, e-commerce has increasingly shown its indispensable role in society when businesses and organizations need to rapidly apply digital transformation solutions to their businesses. commercial and management, such as moving to multi-channel retailing and using smart ordering. management and logistics tools.
With huge market potential and favorable Party and state policies, e-commerce is expected to contribute to Vietnam’s economic recovery as the country prepares to safely adapt to the COVID-19 pandemic.
Electronic commerce has been present in almost all sectors of production and activity, helping to stimulate economic development. However, it still faces a number of challenges related to consumer confidence in items sold online, delivery and payment methods, and information security. In view of this, the government and relevant agencies should take appropriate measures to protect consumers and fuel e-commerce in the coming times./.