Cross-border e-commerce: Big export opportunity, no small challenge

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Cross-border e-commerce is rebuilding the global supply chain, changing the import and export game. Source: Internet.

Increased opportunity, expanded potential

According to a new report published by the consulting firm Access Partnership (UK), in 2022, retail export turnover from business to consumer (B2C) via e-commerce in Vietnam will reach 3.5 billion USD (about 80,700 billion VND), accounting for about 1% of total exports in 2022. The agency forecasts that e-commerce export revenue in Vietnam could increase to $5.5 billion (VND 124,200 billion) by 2027 at an annual growth of about 9%.

According to Lai Viet Anh, Deputy Director of the Department of E-commerce and Digital Economy (iDEA) - Ministry of Industry and Trade, cross-border e-commerce has great potential and is in line with the Government's policy of digital economy development. Currently, the growth rate of cross-border e-commerce in Vietnam is 2.3 times higher than the average growth rate of e-commerce in general.

The estimate given by Lai Viet Anh at a conference organized by this agency in collaboration with Amazon Global Selling shows that if businesses are involved in training, skills, information and support in Cross-border e-commerce is estimated that in 2026, export turnover through cross-border e-commerce will reach 11.1 billion USD and increase to 12.5 billion USD in 2027.

Data from Amazon Global Selling also clearly shows this trend when affirming: the community of cross-border sellers on the Amazon e-commerce platform has also grown very high in recent years (up to 80% in number, 45% in volume) regarding export value.)

It can be said that for Vietnamese enterprises, e-commerce and cross-border sales are opening up new opportunities and great potential. Participating in e-commerce helps businesses reach customers worldwide, expanding the consumption market and generating great revenue.

Exporting goods through e-commerce helps increase sales and expand production scale. At the same time, enterprises can also import quality materials and products from international markets to improve product quality and compete in the market.

Not easy to adapt to the new

A Ministry of Industry and Trade report shows that most of the small and micro enterprises in Vietnam are exporting to the rest of Southeast Asia and China, and these continue to be considered the two largest export regions. In the next 5 years, Japan, the United States and the European Union will be prominent markets that must be prioritized. However, the information, customer needs, tastes and criteria set forth by European countries and the United States are quite strict, but Vietnamese enterprises have not mastered these regulations for the most part.

Many e-commerce platforms in Vietnam support businesses to sell across borders, such as Alibaba, Global Sources, TradeKe, Made-in-China, Shopee, Lazada, Tiki, and Sendo. However, according to a Ministry of Industry and Trade representative, not every e-commerce platform must be ready to "hand-hold" businesses clearly on how to sell across borders through e-commerce. Meanwhile, regulations on export markets are very strict, requiring Vietnamese enterprises to compete and adapt to product criteria and regulations and the cross-border e-commerce environment. Along with that, the problem of information, personnel and especially costs when calculating the problem of cross-border export is also a barrier for Vietnamese enterprises. To support businesses in digital transformation and accompany businesses in their journey to reach the international market and apply e-commerce, according to Lai Viet Anh, the Government has issued many policies, decrees, documents and regulations over the past time. For example, Decree 80/2021/ND-CP guides the law to support small and medium-sized enterprises, providing very specific support levels (such as 50% of the cost of opening and maintaining booths) for businesses in the process of applying digital transformation solutions; or when participating in sales on major e-commerce platforms. Or Decision 645/QD-TTg on the National E-commerce Development Program for 2021 - 2025, with many solutions such as capacity building, training for businesses in e-commerce applications, support for businesses to digital transformation, opening websites, and participating in e-commerce platforms. Another document is the Prime Minister's Decision 1415/QD-TTg on the Project "Promoting enterprises to directly participate in foreign distribution networks in the period to 2030 ", in which the content of supporting enterprises to participate in cross-border e-commerce sales is a core solution.

Challenges in management

E-commerce activities are an inevitable business trend in the era of digital technology and global economic integration. However, if not strictly managed, there will be many potential negative consequences, causing damage to consumers, especially cross-border e-commerce.

The problem of counterfeit products, unknown origin, poor quality goods, and infringing intellectual property rights offered for sale on e-resources exchanges is a significant challenge for management agencies and enterprises. Every year, the Department of Competition and Consumer Protection (Ministry of Industry and Trade) often receives thousands of consumer complaints, requests, recommendations, and complaints about buying and selling on the e-commerce floor.

Answering a question from a reporter of Customs Magazine about this challenge, Gijae Seong, CEO of Amazon Global Selling Vietnam, admitted that this is a difficult problem. Cross-border sales is a very new activity for both businesses and Vietnamese regulators. Therefore, the management needs to consult countries with experience in this field to find the right solution.

Regarding many legal barriers leading to additional administrative burdens, such as compliance with various import regulations and customs duties, it is known that Vietnam has signed several Free Trade Agreements to facilitate trade through digital means. Among these is the "Comprehensive and Progressive Agreement for Trans-Pacific Partnership - CPTPP", with provisions to encourage enterprises to participate in the Free Trade Agreement and related specific provisions to e-commerce.

It can be said that cross-border e-commerce brings many opportunities but challenges for Vietnamese businesses, including several barriers that businesses face related to legal, transportation management, customs, taxes and international trade policy. This requires businesses to have in-depth knowledge and understanding of international trade regulations and processes to ensure proper compliance and maximize business opportunities.