E-commerce growth stumbles as some websites close

Some others also have stopped their operation and many others are not doing that well.

In late April, Rocket Internet, the owner of Zalora Vietnam, sold the website to Central Group from Thailand. Prior to that, in early April, Chinese Alibaba became the owner of Lazada in South East Asia after a deal worth US$1 billion.

Meanwhile, a series of retailers from the Republic of Korea and Thailand, after entering Vietnam, plan to launch websites to push up online sales. The pressure from foreign players in the e-commerce market on Vietnamese businesses is getting tough.

While some Vietnamese e-commerce websites were swallowed by foreign groups, others could not survive the competition. Beyeu.vn, Deca.vn, Fab.vn, Cucre.vn and Lingo.vn recently, had to leave the market.

Analysts commented that many small and medium websites ‘died young’ recently because they could not mobilize enough capital to maintain the operation, while the business field requires plemtiful capital. 

Meanwhile, Facebook has become a rival to e-commerce firms since it launched an online shopping feature with the advantage in the huge number of users.

Tran Dinh Luu Phuc, the owner of Nhanhavui.com.vn, which has just joined the market, complained that the website is facing fierce competition. 

Some websites lift and lower selling prices arbitrarily. There are many sellers on the same websites and they sell the same products but slash the selling prices immoderately to scramble for buyers.

According to Truong Vo Tuan, CEO of Muabannhanh.com, the website has tens of thousands of members, while tens of thousands of pieces of information about sales are posted every day. Therefore, it is a vital matter to control the quality of information.

“We need to build up large and professional staff to check information thoroughly to ensure the information is accurate to prevent swindling,” he said.

Tran Hai Linh, CEO of Sendo.vn, said that some businesses organize ‘counterfeit’ sale promotion programs. 

They set the selling prices at sky high levels and then lower the prices by 30%-40% to attract customers. This has resulted in customers losing confidence in sale promotion campaigns.

Vo Thanh Phuong in Go Vap district in Ho Chi Minh City said she was once fond of shopping online because of e-commerce allowed her to save time. 

However, she is now fed up after finding that products did not have high quality as advertised. Meanwhile, it is nearly impossible to change goods.

E-commerce firms admitted that the lack of confidence is the major problem that prevents consumers from approaching e-commerce.

Meanwhile, 95% of customers buying goods online choose CoD (cash on delilvery) instead of online payment.