Regulatory efforts underway to strengthen e-commerce in Vietnam
Regulatory efforts underway to strengthen e-commerce in Vietnam
By 2025, Vietnam's e-commerce is expected to reach 10% of retail sales and contribute to the digital economy which is estimated to account for 20% of GDP.
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Vietnam's e-commerce market is experiencing robust growth, with experts predicting new shopping trends on the horizon. The ongoing competition among e-commerce platforms is intensifying as many launch aggressive promotional campaigns, local insiders have said.
Competitive edge
The Vietnamese e-commerce market seems to be not short of competition. Shortly after Temu, the Chinese cross-border e-commerce platform, temporarily suspended operations to complete registration with the Ministry of Industry and Trade, nongsan.buudien.vn was launched this month. According to local sources, the launch of this e-commerce platform for high-quality agricultural products in Vietnam, owned by Vietnam Post, marks an important milestone for domestic companies in the e-commerce sector.
The Ministry of Industry and Trade reported that the e-commerce market has seen direct business-to-consumer (B2C) transactions grow by 18-20% in the first ten months of 2024, meeting government targets. The market is forecast to be worth more than US$25 billion by 2025, a projection that is entirely justifiable given the significant increase in tax revenues from companies operating in this sector.
Currently, 116 foreign providers, including major platforms such as Google, Meta (Facebook), Microsoft, TikTok, Netflix and Apple, are registered to pay taxes through an electronic portal of the Vietnam Department of Taxation, contributing nearly VND19.8 trillion ($775.4 million) in taxes. Data shows that in the first ten months of 2024, tax filings through this portal reached nearly VND8.7 trillion ($340.8 million), an increase of 26% compared to the previous period.
In the first eleven months of 2024, e-commerce businesses paid approximately VND108 trillion ($4.2 billion) in taxes, an increase of 22%. Nguyen Lam Thanh, TikTok's representative in Vietnam and Vice Chairman of the Vietnam Digital Communications Association, stressed that e-commerce is an integral part of the digital transformation of retail. The volume of transactions reveals a significant shift in consumer behavior, with more than $20 billion in retail sales generated through e-commerce.
He noted a decline in traditional retail, with some fashion-focused streets and markets facing reduced foot traffic. Many local brands, especially those that have been slow to adopt digital technology, are struggling to keep up with evolving consumer trends.
As shopping trends increasingly integrate entertainment, Thanh urged businesses to adapt or risk being left behind. He advised that companies that ignore the digital shift in distribution and branding will inevitably face challenges in the competitive landscape.
Overcoming barriers to e-commerce growth
Online shopping has become a consumer habit in Vietnam. Photo: Shopee |
E-commerce has emerged as a powerful online tool that can help businesses expand globally. However, its development faces significant challenges, especially for small and micro businesses. Key barriers include limited digital literacy and skills, low competitiveness, lack of market information, and issues related to regulatory barriers, tariffs, logistics, and payment systems, according to local insiders. In addition, fluctuations in international markets and rising trade tensions, as well as increasing quality standards, require considerable effort from the business community.
Tran Quoc Bao, Deputy General Director of KIDO Group and CEO of its e-commerce platform E2E, highlighted three fundamental difficulties for Vietnamese companies entering the e-commerce space.
The first is technology. E-commerce represents a digital transformation in retail and distribution, but many companies are struggling to adapt effectively. Second, persistence is critical to navigating this evolving landscape. Finally, while the "Vietnamese quality goods" label once provided a pathway for local products to thrive in the domestic market, a stronger move by government agencies is now needed to build brand recognition to elevate Vietnamese goods on the global stage.
To promote the growth of e-commerce, Prime Minister Pham Minh Chinh recently asked relevant ministries and localities to improve government management of e-commerce. He has tasked the Ministry of Industry and Trade to lead efforts to revise the e-commerce law and related regulations.
This includes proposing necessary amendments to the policies for e-commerce management, establishing clear guidelines for transactions involving imports and exports, and evaluating the implementation of the National E-commerce Development Plan for 2021-2025. Based on this assessment, a new plan for 2026-2030 will be developed and submitted for approval.
By addressing these challenges and improving the regulatory framework, Vietnam aims to strengthen its e-commerce sector and empower local businesses to thrive in the digital marketplace.
Enhancing e-commerce infrastructure
The Ministry of Industry and Trade said it has been working with other ministries, local governments and businesses to establish criteria and standards for e-commerce infrastructure. This initiative aims to accelerate the development of e-commerce frameworks, promote the growth of the digital economy and create new opportunities for business expansion.
The Ministry is also working to implement Vietnam's Electronic Contract Development Axis, which aims to help organizations, businesses, and individuals verify and manage electronic contracts in commercial activities. In addition, the KeyPay platform is being developed to improve online payment systems and ensure robust support for national e-commerce and public administration services.
Efforts are being made to help businesses adopt digital technologies and integrate e-commerce into their operations. This includes implementing solutions for exporters and importers to declare Certificates of Origin (C/O) through the ecosys.gov.vn platform, as well as facilitating the declaration of origin of goods.
The ministry is also focusing on connecting domestic markets, promoting cross-border e-commerce exports, and organizing the 2024 Online Shopping Day. An integrated e-commerce platform for all 63 provinces and cities, called sanviet.vn, is also under development.
Amid deep integration and fierce competition, the Ministry plans to refine the regulatory framework to protect consumers in the digital space. To this end, it will closely monitor global and domestic e-commerce trends in order to promptly enact policies to promote and regulate the sector.
To combat counterfeiting and ensure consumer safety, the Ministry will strengthen data sharing among government agencies and cooperate with the National Anti-Counterfeiting Steering Committee and the Ministry of Public Security.
These efforts are aimed at gathering information and preventing the circulation of fake, substandard products. In addition, the Ministry will intensify communication efforts to warn consumers about fraudulent activities and scams in e-commerce to ensure a safer online shopping environment.
By 2025, e-commerce is expected to account for 10% of retail sales and contribute 20% of GDP from the digital economy, according to the Vietnam E-Commerce and Digital Economy Agency.
