Vietnam Sees Great Potential from E-commerce

While e-commerce has become an effective and potential business method around the world, in Vietnam most local enterprises do not yet understand this business method.

 

E-commerce has earned enterprises in the world huge revenues of US$700 billion in 2005. In economic powerhouses in the world, e-commerce has seen an impressive growth rate, 28 per cent in the US in 2005, and 44 per cent in France. With three kinds of transactions: B2B (business to business), C2C (customer to customer) and B2C (business to customer) and the Internet as a support tool, e-commerce has become a business method which has attracted millions of people in the world.

 

The success of the auction network e-Bay is an example of e-commerce’s strength. Offering auctions for second-hand items, e-Bay has attracted 150 million customers all over the world to join transactions. Five million items were sold in 2005, helping e-Bay become the world leading e-commerce network with impressive revenues of US$44 billion.

 

According to results of a survey conducted by the Vietnam Chamber of Commerce and Industry (VCCI), which was released at a seminar entitled ‘Helping enterprises apply IT for international integration and development,’ up to 97 per cent of Vietnamese enterprises are still on the sideline of e-commerce. Results of a survey conducted by the Ministry of Trade with 230 websites of enterprises show that 90 per cent of the websites just introduce products and enterprises only, over 40 per cent of the websites provide information about prices and have order forms. Furthermore, enterprises do not update their website regularly. According to reports of the E-commerce Department under the Ministry of Trade, only 28.7 per cent of enterprises update their websites daily; 17.6 per cent, weekly; 13.7 per cent, monthly and 39.9 per cent, occasionally.

 

Due to their neglect in updating information on their websites, local enterprises fail to attract customers to their websites. Some enterprises have paid attention to updating information and building attractive online stores but when customers want to place orders, they cannot. The website of the Phu Nhuan Gold and Jewellery Company (PNJ), for example, is very attractive with updated information and beautiful images and an online store function. However, customers cannot place online orders from the website. This is still popular for websites of many Vietnamese enterprises.

 

Having not been aware of development potential of e-commerce, many Vietnamese enterprises have missed opportunities to increase their sales without paying more for advertisement, marketing and products showrooms. They can save the costs if they use the existing advantages of the Internet.

 

According to the E-commerce Department, there are for reasons, including poor awareness of enterprises and people about e-commerce, poor development of e-payment system, imperfect legal environment, and a lack of human resources, technology infrastructure suitable with the requirement of e-commerce.

 

If Vietnamese enterprises understand more about e-commerce and have suitable investment strategies, they will see good results. The success of some auction websites, such as chodientu.com, heya.com.vn and nhatcuong.com.vn proves the great potential of e-commerce in Vietnam. At present, chodientu.com has become an attractive online supermarket with information updated minute-by-minute. Enterprises can hire online stores for themselves in the portal.

 

Apart from understanding the advantages of e-commerce, enterprises should pay attention to security for their websites and online transactions. Nguyen Tu Quang, director of BKIS, said that many enterprises have considered network security a major and costly issue. However, to secure their online transactions, they should only pay attention to information technology infrastructure and observe fully the regulations on safe operation, their networks will be secured.