Experts define legal risks for local exporters in e-commerce transactions

A website teaches Vietnamese buyers how to sell their products on Amazon.com. (Photo courtesy of Salekit)

Though e-commerce channels are considered one of the best solutions to sell local products amid the pandemic, legal risks from the activities remain a concern.

According to experts during an online seminar titled "Solutions for exporters in the digital transformation process" organised by the Vietnam International Arbitration Center (VIAC) and the Vietnam E-commerce Association (VECOM) yesterday, the pandemic had a negative impact on economic development nationwide, especially the manufacturing industry. However it also drove local digital transformation and created many breakthroughs in smart manufacturing, while businesses have found new directions by applying digital transformation in their production activities.

Chau Viet Bac, Deputy Secretary-General of VIAC, said that cross-border e-commerce in 2021 will increase by 25.7 percent from 2020, adding traditional import and export transactions were gradually replaced by websites and e-commerce platforms.

Bac said: "Contracts using electronic signatures also increased by 17 percent compared to before the pandemic,” adding “timely digital transformation will help businesses maintain operations.”

Nguyen Ngoc Dung, Vice President of VECOM, said the trend of global cross-border e-commerce from 2014-2020 has increased from 17 percent to 41 percent and global cross-border e-commerce transactions in 2021 to date was estimated at 1.25 trillion USD.

At the same time, he said Vietnamese e-commerce platforms are gradually developing, with many high-value products being offered for sale online such as cars, electronic equipment and technology.

VECOM's leader added the world's largest e-commerce platform Amazon has invested in and supported Vietnam by using Vietnamese domain names and Vietnamese language, saying: "This shows that the Vietnamese market has potential for development. Many Vietnamese products such as kitchenware and traditional products are popular and have sold well on Amazon.”

In Vietnam, e-commerce was becoming a more and more effective channel for local products, especially agricultural ones, with Ben Tre coconut sold on Lazada, Dong Thap lotus sold on Tiki and clean dragon fruits of cooperatives in Binh Thuan sold online too.

Dung said many farmers didn't think they could sell dragon fruit with livestreams, but after training, they started to gain orders both domestically and from abroad.

Dung, however, mentioned that e-commerce in rural localities, the production hubs, only accounted for 30 percent of the e-commerce structure while the remaining 70 percent of growth was in big cities of Hanoi and Ho Chi Minh City, adding: “It is necessary to narrow the gap.”

Bac said: “An effective digital transformation process must have a reasonable strategy and action, especially paying attention to the legal mechanism to be safe and effective”

Nguyen Tuan Hoa, arbitrator of VIAC, said that businesses that wanted to convert digitally for export needed to know how to approach platforms and have reasonable solutions. He said major requirements to be met were to have a product traceability system and maintain the quality and competitiveness of products.

Hoa said in the context that the local production and business process was mainly manually produced with low labour productivity while production was still consuming raw materials and energy, causing environmental pollution, “things must be changed”.

Hoa said the future-oriented production process must be intelligent automatic production, high labour productivity, low consumption of raw materials and energy, especially to improve the customer experience.

To do this, Hoa said: “It is necessary to have digital platforms to develop physical-digital systems, digital infrastructure, digital policies, digital human resources.

"Digital transformation is a revolution in every business where they must have pioneering leaders, connect experts, develop new production methods, integrate technology solutions and have a data management system," the expert said.

Hoa continued: “In the near future, the Government will issue a National Strategy on the development of the digital economy and digital society. In the strategy, there is a plan to develop a team of consultants for digital transformation, advising all industries and professions."

Nguyen Trung Nam, Executive Director of Tinh Tú Associates Law Firm (EP Legal), said that there are many potential inadequacies and risks in commercial activities with the element of digitisation.

Nam considered one as identity risk as it would be more difficult to verify the identity of a partner, which could lead to illegal activities such as money laundering and forging documents.

Nam added: "Also, gathering evidence in the event of a dispute is also difficult. Data can be difficult to access or inaccessible. In addition, it can be deleted, overwritten, encrypted or hidden," he said.

Therefore, he said e-commerce transactions need to pay attention to verify the electronic identity and find information about the trading floor of exporting goods, adding: “It is necessary to pay attention to customs and tax procedures and to note the separate regulations of each e-commerce platform.”

"VIAC encourages the parties to agree on sessions, including preliminary meetings and online dispute resolution through available platforms," he said./.