Good order completion services will promote e-commerce

Mr. Nguyen Thanh Hung, Chairman of the Vietnam E-commerce Association has said so during a talk with reporters of the Customs Newspaper.

The e-commerce scale in Vietnam is considered relatively small. What is your opinion on this issue?

The development of e-commerce in Vietnam can be divided into 3 phases. The first phase was from 1997 to 2005, when the websites proportion of the business was very low. Most companies invested in e-commerce from this period but now are no longer active. Next, the second stage from 2006 to 2015 can be considered as the popularized stage. At this time, most Vietnamese accessed the internet to read news, chat, email etc. Therefore, the online transaction size was very small. In stage 3 from 2016 to 2020, e-commerce is expected to grow rapidly and increase by over 20%/year.

Overall, e-commerce in Vietnam in the last 10 years has achieved many remarkable achievements. First is the rapid development of the information technology infrastructure and legal policy. To the present time, there are no complaints about information technology infrastructure nor difficulties in policy. For the speed of users growth, Vietnam is the dream of many countries around the world. Specifically, the size of Vietnam's population is quite large, with 92 million inhabitants. The number of internet users in Vietnam has grown very fast and now accounts for half of the population. Importantly, this pace will continue to increase in the coming period.

However, the e-commerce growth rate is quite fast but the scale is small. In particular, the number of buyers is big but the transaction value is very small. The majority of consumers use e-commerce to check price. But look at a broader perspective, though the absolute value of e-commerce market is not high, but in terms of promotion, marketing elements, e-commerce has significantly contributed, and supported traditional trade.

So in the coming period, will the consumer behavior toward e-commerce change, sir?

Of course, in the near future, e-commerce will be in the explosive period. Because, from 2016 onwards a series of factors are changing. In the previous period, most consumers participated in e-commerce with the careful psychology and mainly for exploring, but today, most of them are familiar with e-commerce and would be willing to participate. For example, previously there were very few people using the Uber service, but today, this number is increasing rapidly. The Uber smart transportation service is an illustration of e-commerce development. Moreover, the services of airline, movie tickets online purchasing are also increasing. Many other areas such as education and health are also changing. Companies have also recognized that without engaging in e-commerce, they will lose market share to competitors.

Digital technology is opening up a huge marketing opportunity for companies. Photo: S.T.

Thus, we can see e-commerce in Vietnam has great potential, but how to take full advantage of that potential?

For customers moving from checking information, comparing prices to buying, the creation of trust is very important. If this problem could be solved, then e-commerce will boom. But to do so is not a simple matter because if customers are not satisfied with the online sales service the first time, they will probably never buy it again.

To obtain the trust of customers, order completion service plays an important role and is a driving force for e-commerce to demonstrate the advantage of the convenience and efficiency, thereby increasing customers’ satisfaction. The trend of online retailing is towards high specialization. The salespeople need to focus their resources on activities to lead buyers to online contracting. The other services related to contract performance or orders completion such as warehousing, packing, delivering, payment and receipt of returned goods, post-sales caring etc. can be outsourced. However, order completion services in Vietnam are still weak and not caught up with the trend of strong e-commerce growth. Therefore, there is a need to have a close relationship between online retailers and the order completion service providers to promote e-commerce development in the world as well as in Vietnam in the next years.

It is noteworthy to add that e-commerce in Vietnam is experiencing great difficulty in expanding business in rural areas. In terms of the internet, Ca Mau, Lang Son or Ho Chi Minh City are equal. But a customer in Ca Mau is different in comparison with one in HCMC. Because the customer in HCMC could get free delivery, whereas customers in Ca Mau will be charged. Recently there was a customer in Bac Kan buying a television through Lazada. To keep credibility, this company dispatched a car to carry that TV to Bac Kan province. This shows that, keeping the company’s reputation is very difficult and requires a great effort from the businesses.

However, the general growth trend of e-commerce in Vietnam in the near future will remain strongly. As forecast to 2020, the retail e-commerce market size in Vietnam will reach about $US 10 billion.

Thank you!