Hanoi aims to speed up e-commerce industry

As one of Vietnam's two leading e-commerce hubs, Hanoi is committed to expanding business opportunities, improving infrastructure, and fostering an advanced digital economy.

Online trading platforms launched at a trade fair in Hanoi. Photo: Hoai Nam/The Hanoi Times

The city consistently ranks second in the latest editions of the Vietnam E-Business Index, as published by the Vietnam E-Commerce Association.

In May 2024, Hanoi scored 84.3 points, just slightly behind Ho Chi Minh City’s 87 points, reflecting the rapid growth of e-commerce in the capital.

The streets are bustling with motorcycle couriers delivering goods, evidence of this e-commerce boom.

According to the Hanoi Department of Taxation, it has documented the activities of 367,000 online stores on the three largest e-commerce platforms: Shopee, Tiki and Lazada in terms of income declaration, tax amount paid and bank accounts.

In the first half of 2024, Hanoi collected nearly VND10 trillion (US$402 million) in e-commerce-related taxes, with over VND7.3 trillion ($294 million) coming from business activities on e-commerce platforms and over VND2.5 trillion ($100 million) from the platforms themselves.

Experts believe that this e-commerce surge has also spurred Hanoi's export activities. The city exported goods worth $10.4 billion in the first six months of 2024, up 10.8% year-on-year.

Hoang Thi Dieu Hong from the Hanoi Department of Industry and Trade, noted that Hanoi businesses have increasingly embraced e-commerce to reach new markets and boost exports.

Data from the Hanoi Association of Small and Medium Enterprises (Hanoisme) shows that half of Hanoi's businesses have explored e-commerce, with many now selling products on multiple platforms.

Vu Thanh Hai, Sales Director of Sunhouse Group JSC, said the company is now expanding its online sales internationally and now offers four products on Amazon in the US.

Not only the big players, but also small retailers are using e-commerce platforms.

Hoang Thi Lan, a shop owner in Thanh Xuan District, said she moved her business online to cut costs.

"Selling online brings me higher profits with lower expenses," she said.

Vu Thi Yen, Vice Dean of the Economics Department at Hanoi's Thuongmai (Trade) University, said the city is a large market of 8.5 million people with advanced technologies and favorable conditions for development.

As an economic hub, Hanoi is home to many IT companies, which facilitates access to e-commerce, she added.

Accelerating e-commerce growth

To further develop e-commerce, the Hanoi People's Committee issued Plan 303/KH-UBND at the end of 2023, which aims to maintain the city's top ranking in the national e-commerce index (EBI) and achieve significant milestones.

A customer searches for items on Shopee. Photo: The Hanoi Times

Other targets include ensuring that business-to-consumer (B2C) e-commerce accounts for 13 percent of total retail sales and service revenue, and that 53 percent of Hanoi residents take part in online shopping. Under the plan, Hanoi also aims to have 49% of small and medium-sized enterprises doing business on e-commerce platforms, including social networks with e-commerce functions.

Hanoisme’s Vice Chairman Mac Quoc Anh said that businesses often lack skilled resources.

In addition, e-commerce infrastructures such as electronic invoicing, payment systems, and logistics need better synchronization and connectivity, he said.

According to Chu Xuan Kien, Director of the Hanoi Market Surveillance Department, counterfeiters and smugglers use e-commerce platforms to sell counterfeit and smuggled goods.

He recommended that lawmakers clarify the responsibility of e-commerce service providers for the goods sold on their platforms to prevent fraud and protect consumers.

Nguyen The Hiep, Deputy Director of the Hanoi Department of Industry and Trade, said that SMEs account for 95% of all businesses in Hanoi and they are aware of the benefits brought by e-commerce.

However, they still struggle due to a lack of necessary skills, he said, adding that the department plans to help businesses understand e-commerce regulations, thereby increasing export turnover and building a global Vietnamese brand.

"In 2023, the department will help 400 businesses and individuals adopt e-commerce," he said.

Pham Thi Minh Uyen, Vice Dean of the Scientific Research Methods Department at Thuongmai University, suggested that Hanoi needs to refine policies and management tools in line with international laws and commitments in free trade agreements.

She also emphasized that it is important to raise public awareness about the Internet and e-commerce to encourage more residents and businesses to shift from traditional retail to online retail.

Hanoi will expand consumer markets for agricultural products, handicrafts, OCOP (One Commune One Product) items, and consumer goods through e-commerce channels, and promote cross-border e-commerce transactions to help businesses export goods, said Nguyen Manh Quyen, Vice Chairman of the Hanoi People's Committee.

The city will also look to further develop the infrastructure and solutions to support online transactions for online commerce, ensuring the safety and security of both the seller and the buyer, he said.

In May, Prime Minister Pham Minh Chinh emphasized the importance of promoting cashless payments and accelerating the digital transformation of the  city's tax, fee, and charge management.

He emphasized the need for decisive action on electronic invoicing, especially for retail invoices sent directly to consumers.

Hanoi needs to develop digital infrastructure and effectively apply digital transformation tools such as artificial intelligence, cloud computing, big data and virtual assistants, while ensuring cybersecurity and information security, PM Chinh said.