E-commerce to become indispensable instrument for Vietnam enterprises
E-commerce to become indispensable instrument for Vietnam enterprises
E-commerce has been a spotlight of the Vietnamese economy with an average growth rate of 14% in the first three quarters of this year.
Amid the complicated Covid-19 situation globally, e-commerce would become an indispensable instrument for local enterprises to expand their operation and trading activities, according to Vice Director of Hanoi’s Department of Industry and Trade Tran Thi Phuong Lan.
Overview of the conference. Photo: Khac Kien.
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While e-commerce is an inevitable trend and expected to enhance enterprises’ competitiveness, it would gradually change customers’ behavior and enterprises’ way of doing business, Ms. Lan said at a conference discussing export opportunities for Vietnamese enterprises from e-commerce on November 3.
The Covid-19 pandemic is hurting Vietnam’s exports in general, and those of Hanoi in particular as many major partners have canceled or delayed orders, not to mention the slow customs clearance process due to tightened anti-Covid-19 measures.
Vice Director of Hanoi's Department of Industry and Trade Tran Thi Phuong Lan. Photo: Khac Kien.
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In the first 10 months of 2020, Hanoi’s exports stood at US$13.19 billion, up 0.1% year-on-year, the lowest growth rate over the past 10 years.
Amazon, along with other e-commerce platforms, is playing an increasingly important role as a convenient and safe shopping option for Vietnam’s traders, stated Ms. Lan.
According to the World Trade Organization (WTO), trade in Covid-19 pandemic situation has made it clear that e-commerce can be an important solution for consumers in a time of crisis, and that it is also an economic driver, including for small businesses.
Nguyen Thi Minh Huyen, deputy director of the E-commerce and Digital Economy Department under the Ministry of Industry and Trade, said resorting to e-commerce and digital economy is a must amid the Covid-19 crisis.
An overview of the conference. Photo: Khac Kien.
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While global economy is falling into a recession in 2020, Vietnam remains among a handful of economies with positive economic growth, albeit at a lowest growth rate over the past 10 years.
This showed the strong efforts from the government in pursuing the dual target of both containing the pandemic and boosting economic recovery. During this context, e-commerce has been a spotlight of the Vietnamese economy with an average growth rate of 14% in the first three quarters of this year, noted Ms. Huyen.
Referring to Amazon as the world's largest e-commerce platform, Ms. Huyen said it is essential for local enterprises to understand its policies and regulations.
In the January – October period, the volume of goods sales via e-commerce increased by 10 – 30% in average, while revenue from online sales in Hanoi made up 8% of total retail sales and services.
55% of population to shop online by 2025
A government’s plan for the development of e-commerce by 2025 targets around 55% of the population to shop online with an average spending of US$600 annually by 2025.
Additionally, revenue from online sales of business-to-consumer e-commerce, known as B2C e-commerce, is set to grow by 25% per year to US$35 billion, accounting for 10% of total goods retail sales and service revenues.
Meanwhile, the government expects the rate of population using related services, including non-cash payment services, at 50%, and intermediary payment services at 80%.
The plan aims to keep delivery costs at around 10% of product prices in e-commerce.
By 2025, 80% of e-commerce websites should be integrated with online shopping and 70% providing e-invoices.
Notably, Hanoi and Ho Chi Minh City would make up half of e-commerce revenues in the next five years.
