Economic recovery and breakthrough growth from e-commerce

Mr. Nguyen Ngoc Dung, Chairman of E-commerce Association (VECOM).

How do you evaluate the development of Vietnam's e-commerce channel in recent years?

E-commerce has strongly developed in the 2020-2021 period and is forecast by economists to reach about US$39 billion by 2025.

This will also be a sustainable development trend in diversifying the industry's sales channel in the near future, whether there is a pandemic or not.

Notably, the Covid-19 pandemic has shortened the progress of application development for e-commerce from sellers to buyers by 1-2 years compared to the plan until 2025.

The growth rate of e-commerce in recent years is about 30-35%/year and the time after the pandemic will be a completely different picture. The changing picture comes from shoppers, merchants and online retail platforms. To date, Vietnam has seen 8 million new digital consumers since the start of the pandemic, of which 55% have come from non-urban areas.

Brands and sellers on Vietnam's e-commerce floors are concentrated mainly in two big cities of Hanoi and Ho Chi Minh City. Sales of international sellers are also growing rapidly after only two major cities in Vietnam as the exchanges have begun to expand international products.

Digital consumption has become a way of life as 97% of new consumers are still using the service and 99% intend to continue using it in the future. Meanwhile, 30% of digital sellers believe they cannot make it through the pandemic without digital platforms.

What is the role of e-commerce in boosting the economy after the pandemic?

We used to see e-commerce as a channel to complement other channels. But during the Covid-19 pandemic, it has changed a lot; e-commerce has become a lifeline for many economic sectors. As of 2022, Vietnam is the second largest e-commerce market in Southeast Asia after Indonesia. Not only the products in the average segment but also the products of high value need advice and long-term warranty, consumers still prefer to buy directly.

On the momentum of development, in the future, the growth rate of e-commerce will see amazing numbers. Vietnam will make e-commerce a spearhead for development. Vietnam must definitely be in the top 3 of the region in terms of growth. E-commerce with a new role will boost the economy after the pandemic. Because, currently, the number of people working online accounts for a large number, so online shopping is the main thing.

In the first quarter of 2022, Vietnam's GDP growth rate is positive and is expected to maintain its growth momentum in the near future. Vietnam has been showing strong signs of economic recovery, creating jobs, so it is expected that consumer spending will increase strongly. This is also a driving force for enterprises to boost production and business activities.

The quality of goods on the e-commerce channel is a matter of concern to consumers. In the current context, what should commodity businesses do?

In the past, we heard a lot about the product quality which is not good as advertised, but when consumers are getting smarter, all units have to invest a lot to join the e-commerce floor.

If one delivers the wrong order and is reported in the press, social networks will be boycotted, and eliminated and it takes a lot of effort to revive the business. Therefore, business units selling quality goods online have to have after-sales policies and return policies to support them. Consumers can return goods when they are not satisfied.

Recently, many Vietnamese products have been brought to the world through e-commerce platforms. What do you think about the potential of this market in the near future?

Through major international trading platforms such as Amazon or Alibaba, Vietnamese businesses, especially small and medium enterprises, can reach hundreds of millions of customers in many countries.

In addition to major international e-commerce sites, recently, a number of domestic e-commerce sites have also promoted the export of Vietnamese goods, especially agricultural products.

The Vietnam E-commerce Association has also organized to connect, create a business environment and bring businesses that are members of the association to participate in programs on promotion and support.

Each year, the unit travels to over 30 provinces and cities to connect and help businesses change their awareness and determination to invest in sales activities on domestic and international e-commerce floors. In addition, the association also builds internal sales floors for businesses to practice in the domestic market before reaching out to the world. Along with the leadership role of localities in strongly supporting e-commerce, it is forecast that in the near future, many local products will be sold on exchanges.

However, the difficulty of exporting through e-commerce is not from technical problems, but also from problems of knowledge, foreign trade operation procedures, communication according to international practices, etc., which is also a limit ation for many businesses.

Therefore, many good products have not yet reached international consumers. Offering experiential products, finding featured products, and producing products that international consumers need are also issues being raised by businesses.