E-commerce - Jumpstart for Exports during Pandemic

9:52:13 AM | 2/6/2021

While global economic growth is being undermined by the COVID-19 pandemic, Vietnamese exporters have flexibly grasped advantages of applying digital technology in e-commerce platforms and preferential treatments from free trade agreements, including EVFTA. Vietnam Business Forum’s reporter has an interview with Ms. Lai Viet Anh, Deputy Director of the Vietnam E-commerce and Digital Economy Agency - Ministry of Industry and Trade, on this matter. Huong Ly reports.

 

What do you think about Vietnamese exports via e-commerce platforms?

With global B2C e-commerce revenue expected to reach US$2,883 billion in 2023, cross-border e-commerce will be an extremely effective tool for businesses to expand their market. Vietnam has the fastest cross-border e-commerce development in the world. This is an effective way for Vietnamese businesses to join global supply chains, minimize risks exposed to supply chain disruptions or stalls caused by the COVID-19 pandemic.

Some exports are expected to benefit greatly from the EU - Vietnam Free Trade Agreement (EVFTA). Could you tell us what businesses need to do to access demanding markets like the EU through e-commerce?

The COVID-19 pandemic has forced businesses to change. Despite the advantages of FTAs, they still have to adapt to new trends where Vietnamese goods are well connected to the global market. To export their products through cross-border e-commerce channels, they need to adapt to new customer needs and e-commerce policies.

In addition, joining an e-commerce platform, they need to study regulations and ways to export products meeting the required standards imposed by importing countries, shipping methods and delivery time. All these factors affect product price.

Companies must continuously apply and improve digital technology, transform their business models into the online environment, and connect directly with consumers. Effectively using online export methods not only requires policies, but also platform support from major worldwide e-commerce exchanges.

What are barriers to exporters on the e-commerce channel?

The first is knowledge and skills. Apart from knowledge about export, import and procedures, businesses must understand specific e-commerce tools. The second is cultural and language barriers. The final is product branding and positioning. As exporting via e-commerce is aimed at end users, including foreigners, businesses must know how to appeal to their tastes.

90% of Vietnamese enterprises are SMEs. Do they face difficulties competing with giant exporters?

Many large enterprises in Vietnam have been very successful in the online environment such as Trung Nguyen Coffee or Bitis. They are experienced in deploying on e-commerce platforms like Alibaba and Amazon. However, the e-commerce playground is a fair playing field where opportunities are also for small and medium-sized enterprises (SMEs) to expand. Many dynamic SMEs have joined this playground and obtained initial successes. Most are involved in handicrafts, agricultural products, foodstuffs and confectioneries.

Surprisingly, SMEs have a great advantage to customize their products to customers’ needs. Typically, the deal size on e-commerce is not large. Many orders require suppliers to design and customize products according to specific requirements from buyers. Therefore, SMEs have an advantage over larger ones in customized production. That is also a helpful direction for them to be more successful in reaching customers through e-commerce.

How can enterprises sharpen their competitive edge in cross-border e-commerce?

The quality and competitiveness of Vietnamese goods on e-commerce platforms is very strong. Many big sellers have actively imported goods from Vietnam. However, the volume of Vietnamese goods traded via e-commerce platforms is not large and there are no strong branded products. Therefore, what we need to improve is to strengthen commitment, focus efforts to use digital tools, improve competitiveness and build their own brands.

Notably, e-commerce is a helpful channel for us to boost our brands and identity to reach potential customers. Therefore, businesses need to pay more attention to building and developing brands, investing in product design and packaging. Nevertheless, to be successful, products must rely on intrinsic product quality. They also need to comply with strict standards on contracts, import and export conditions, delivery, packaging and labels as required by importing countries.

E-commerce helps us promote our brands very quickly. But if there is any problem, it can seriously damage our brand. Special attention should be paid when we use digital tools to export our goods through e-commerce.

Source: Vietnam Business Forum