E- Commerce Development Needing Quick Changes to Legal Environment

One workshop on “Master planning for electronic commerce development of in 2006 - 2010” has been held in Ho Chi Minh City . This plan was initiated by the Electronic Commerce Department - Ministry of Trade with the objectives of having 70 per cent of large enterprises applying electronic commerce, 90 per cent of small and medium enterprises acknowledging its benefits and 15 per cent of households and individuals getting into the habit of online shopping. However, in reality, electronic commerce has only reached its initial phase and needs a favourable legal environment for development.

The visionary pioneers

Acknowledging the increasing importance of electronic commerce in the international trade and the demand of enterprises on high quality supporting services, the B2B Technology Company has introduced an electronic commerce transaction gate at www.worldtradeb2b.com. This is a global e-commerce transaction address with 27 major and more than 1,500 secondary products. The customers can easily find the products they need as well as offer their own products for sale. The initial step in formulating the current e-commerce is the online selling network. Presently, there are more than 10 supermarkets on the net including two virtual supermarkets such as the GOLMART (www.golmart.com.vn) of Uy Tin - GOL Company and VDC supermarket (vdcsieuthi.vnn.vn) of the Informatics and Data Transmission Company. Apart from that, there are supermarkets at www.vietnamshop.com of the Pacific Dragon Company, www.bancanbiet.com of Sai Gon Lien Phuong, www.sieuthitainha.com.vn of the Company for home services and supermarket, www.camnangmuasam.com.vn of P.H.I Consulting and Investment Company and www.thienhoaelectric.com of Thien Hoa Machineries and Interior Decoration Centre. Currently, the VDC Supermarket has set up close cooperation with nearly 100 suppliers as official distributors of electronic appliances of LG, Electrolux, Sony, Panasonic and Sanyo; cosmetics of Pupa, Londa and Averin. GOLMART provides materials and spare parts, office equipment and stationery, consumption goods as well as gifts delivery services. All electronic supermarkets have accepted different methods of payment. Customers can transfer money via the post office, pay by cheque or with their credit cards. Some of them even accept the demand deposits with ATM cards like Golmart (Golmart has opened its account at Vietcombank, therefore, the transactions made with the ATM Connect 24/24 cards are very easy). In reality, the www.golmart.com.vn is only part of G.O.L Informatics Trade and Services Company. This company is capable of developing and providing the solutions for e-commerce as well as successfully applying these solutions to business practices such as international trade promotion (www.goodsonlines.com) or online international transport services (www.weixin.com.vn). It can be said that these businesses have enterprisingly invested in developing e-commerce in the current context of . However, this is only one aspect of e-commerce. The actual benefits and effects of e-commerce in the world are greater and open for all enterprises.

The actual development of e-commerce in enterprises

Currently, about 175,000 websites of Vietnamese enterprises operate with 59.3 per cent using the ADSL transmission line. Last year, state organs actively developed many draft laws for creating legal environment for e-commerce including the Committee for Sciences, Technologies and Environment of the National Assembly with the draft on electronic transactions, the Ministry of Trade with the modified Trade Law and the Ministry of Post and Telecommunication with the draft Decree on electronic signatures and notarisation services. However, all have to wait until the normative acts come to reality. According to the Ministry of Trade, the awareness on e-commerce of enterprises is changing very fast. In 2002, nearly 800 enterprises had websites, and by 2004, this figure had increased to more than 3,000. Coming to 2005, in the B2B commercial transaction trend (the e-commerce transaction between enterprises), series of concrete purchasing and selling contracts have been made. However, the popular application of e-commerce by enterprises has stopped at the preliminary level. Most websites providing the information on enterprises and products have not fulfilled the interactive instruments for e-commerce.

Mr. Tran Thanh Hai, Deputy Director of the E-commerce Department of the Ministry of Trade revealed, “Enterprises provide more and more attention to the application of information technology in enhancing the productivity and expanding the market, reflected through the increasing number of informatics cadres in enterprises. Beside that, some domestic economic and commercial colleges are teaching e-commerce as a subject in the official training curriculum”. In addition, many banks have met the technical infrastructure conditions for supplying useful electronic facilities like Internet Banking and Internet Home Banking. However, they cannot be implemented as perfect services due to the lack of a law on electronic transactions. Though the Governor of the State Bank has signed the approval on using electronic documents within the banking sector, according to the Accounting and Statistic Law, banks should print out, stamp and sign the transaction documents for ensuring the legality of vouchers. Beside that, the telecommunication infrastructure conditions, Internet, informatics equipment and applicable software have created certain impacts on e-commerce development.

How can 2010’s objectives be achieved?

The development potential of e-commerce in developing countries is very high due to fast growth of Internet connections, stable economic growth and increasing awareness of the opportunities and benefits brought about by e-commerce. The B2B trading method continues its domination over B2C (e-commerce transaction between individuals and enterprises) in global commercial transactions. In the B2C method, the general retail form (e-commerce supermarket), though it makes up a modest ratio in the total online retail stores, still holds the majority of B2C transaction values on the virtual market. The combination between online retail stores and traditional distribution canals is the best trading method selected by most enterprises. Mr. Le Danh Vinh, Deputy Minister of Trade said that high economic development objectives for 2006 - 2010 and attention to trade development, especially deeper and more comprehensive export and international integration upon the admission to WTO by the end of 2005 or beginning of 2006, set up by Vietnam, are the conditions for e-commerce development. The National Assembly and the Government have committed to creating a favourable legal environment for e-commerce. Therefore, the period from 2006 - 2010 will witness a boom in e-commerce’s development.

Mr. Tran Thanh Hai concluded that, to facilitate the development of e-commerce, the following solutions are needed: broadly announcing the master development planning for the e-commerce, creating a favourable legal environment for its development, adjusting some policies to match the practical situation, supplying online public services, developing human resources, supporting research, technology transfer and investment for e-commerce.

Song Phuong