Vietnam unlocks e-commerce potential

At its core, e-commerce refers to the purchase and sale of goods or services via computer networks, according to the Vietnam E-Commerce and Information Technology Agency (VECITA).

E-commerce includes functions such as marketing, manufacturing, finance, selling, and negotiations and is very important technology for businesses to maintain competitiveness in this rapid period of integration, said VECITA Director Tran Huu Linh.

However, to specifically meet the needs of small businesses for building their e-commerce online sales, VESITA has laid out plans to provide training for an estimated 25,000 participants over the next five years.

The training courses will be held in Hanoi and Ho Chi Minh City with class sizes limited to 50 each Linh said, adding that 70% of the cost for each participant will be paid out of the state budget and the remainder by the participating business and/or individuals.

A recent VECITA survey shows that the use of e-commerce is blooming in Vietnam with roughly 80.2% of consumers saying they have purchased at least one item shopping online over the past three months.

In addition right at 93% of those same consumers reported in the survey that they plan to make at least one online purchase during the next six months the VECITA Director said.

It’s fair to say that online shopping, though still in its infancy, is truly taking off with researchers concluding that Vietnam has a growth rate trajectory for online sales of 11.8%, which ranks second out of all nations in the Asia-Pacific region.

Looking back a few years, it was very difficult to find a Vietnamese business online but now look at Lazada Vietnam with roughly 50% of sales carried out through m-commerce (mobile phones). In 2014, the figure was only 22%.

M-commerce, a type of e-commerce, is very important to distinguish because the browsing and buying habits of someone who uses a computer and a mobile phone are decisively different and advertising must adjust accordingly.

Traditional ‘bricks and mortar’ businesses that have been slow to embrace online shopping have suffered said VECITA Director Linh and by resisting investing in online channels, they will simply be unable to cater to the rapidly changing demands of savvy online shoppers.

In the first six months of this year, at Lazada Vietnam, the number of orders through mobile phones increased 2.5 fold and its overall sales volume soared fourfold compared to the same period last year.

Lazada Vietnam forecasts that its online shopping orders will further explode in the future and therefore plans to pour more investment in its m-commerce marketing strategy to cater to the convenience of its mobile consumers. 

Online shopping is all about the exciting challenge of looking at consumer buying behaviour that has paved the way for many small businesses to open online-only stores and operate competitively with traditional high street style shops.

Even retailers that have been in business for decades that have built up a loyal customer base are feeling the effects of online shopping and are seeking ways to develop this new model of trading to get on board with the trend today.

Satyajit Ghosh, head of Media at Unilever Vietnam, shared that his company has online sales plans for every market, with plans to use smartphone marketing as the spearhead to develop Internet applications and online advertisements. 

The training classes are a dynamic example of how the government is working hand in hand with business so that e-commerce can become a modern technology for any business in the country stressed VECITA Director Linh.