Vietnamese goods in the face of the cross-border e-commerce "whirlwind"

Cross-border e-commerce helps Vietnamese businesses open up many opportunities to participate in the global supply chain. Illustration photo: VNA

Fierce competition

Mr. Tran Minh Tuan, Director of the Department of Digital Economy and Digital Society, Ministry of Information and Communications, said that wholesale and retail on the internet recorded strong growth, with an average Vietnamese consumer shopping online 4 times/month. Vietnam is a potential market with more than 100 million people, located next to large markets such as China, India, ASEAN; the market size in 2023 will rank 3rd in Southeast Asia after Indonesia and Thailand.

However, Mr. Tuan also said that wholesale and retail also face risks and challenges such as traditional stores will not be able to survive due to low competitiveness, limited market access; unable to compete with other localities or neighboring countries; goods security, financial security face many risks from cross-border e-commerce. In particular, Mr. Tuan also pointed out that the biggest challenge is that traditional retailers lack a technology platform, connecting sellers and buyers (B2B) in Vietnam with partners around the world. Along with that, there is a lack of logistics infrastructure, a synchronous payment platform, promoting cross-border e-commerce activities.

Agreeing with this opinion, Mr. Nguyen Ngoc Dung, Chairman of the Vietnam E-commerce Association (VECOM), said that the issue of resources, technology and costs is the biggest challenge for enterprises, cooperatives and farmers when bringing Vietnamese goods to e-commerce platforms, especially cross-border e-commerce.

Sharing about these difficulties and challenges, Mr. Nguyen Khanh Toan, Director of the Trade Promotion Connection Center of Thai Nguyen province, said that currently, the human resources and capacity of small and medium enterprises and cooperatives have not been properly trained in information technology, practical application is still limited, there are no resources to hire engineers for operations, hire marketing to bring products to e-commerce platforms.

Regarding capital, Mr. Toan said that the enterprise's own capital is limited, in which resources are allocated for production, business, and research of new products, so investing in digital transformation is a challenge. Along with that, logistics is also a worrying issue, because the distance is too far, the geography is too difficult, so bringing products from remote areas to sell on e-commerce platforms is also a difficult problem for enterprises.

“To bring products to e-commerce platforms and export them through cross-border e-commerce platforms is a process of guiding households and manufacturing enterprises, but to successfully sell products and maintain booths, we need the support of accompanying units,” said Mr. Toan.

Success is proactive

The “storm” of cheap goods through cross-border e-commerce platforms such as Temu, Shein, Taobao… with competitive advantages in price, design and shipping has increased competitive pressure on domestic enterprises. To compete in the market, experts say that speed and cost are two key factors in the logistics sector.

Although domestic enterprises have met domestic demand well, to expand regionally and internationally, it is necessary to improve operational processes and apply technology. Therefore, Vietnam needs to build more closely linked logistics systems. This not only supports domestic e-commerce but also helps Vietnamese goods access international markets quickly and effectively.

Regarding the issue of supporting people in digital transformation and bringing products to e-commerce platforms, Mr. Nguyen The Anh, Director of Distribution Business, Vietnam Post Corporation (VNPOST) said that distribution and transportation are important factors in e-commerce, but logistics is still a weakness that makes Vietnamese enterprises face difficulties, not only in competing with foreign rivals but also in the domestic market.

“The biggest barrier at present is to hold people’s hands and guide them, but it is necessary to maintain and accompany them to be successful. In fact, people need to ensure product quality, maintain production and sales models, and also need continuous learning skills for coordination, training, and guidance to be successful and develop sustainably,” said Mr. Nguyen The Anh.

Mr. Tran Dinh Toan, Deputy General Director of OSB Group Joint Stock Company (Alibaba agent in Vietnam) said that to be successful on e-commerce and cross-border e-commerce platforms, businesses must identify e-commerce as essentially a sales channel, so they need to perform well on their booths and have specific strategies. The e-commerce era of putting up booths and waiting for buyers to come is over, but we must be proactive, that will determine the success of the business. Businesses must be more proactive and active on e-commerce. Those who are proactive and approach will offer better products to buyers. Sellers also need to change their mindset, now "there is no longer a situation where big fish swallow small fish, but the fish that adapts better will be successful. The current success on e-commerce is the initiative of businesses", Mr. Toan emphasized.

Experts say that the scale of Vietnam's wholesale and retail market is not small, the potential and room for e-commerce development is huge; while the characteristic of e-commerce is that it has no boundaries, so if localities and units operating in the wholesale and retail sector do not transform, they will risk losing the market.