E-Commerce: Positive progresses

Online business or exchange floor activities have become more active. Especially, the year 2006 marked the legal recognition toward e-commerce after the Ecommerce Transaction Law, amended Commerce Law, amended Civil Code and Ecommerce Decree take effect. The year was also the first year Vietnam carried out the ecommerce development master plan in 2006-2010 approved by the Prime Minister.

 

 

The Ecommerce Department under the Ministry of Trade cooperated with IDG Vietnam to host the seminar and exhibition on Vietnam E-Business Forum (Vebiz 2007) in Hanoi on January 17-18, 2007. With the theme of “Enabling business innovation in the post-WTO area”, the two-day event focused on discussions over issues including overview of e-commerce after the WTO entry, e-commerce policies and legal systems, e-business security, key IT architecture for e-businesses development and others. Especially, attending senior experts deeply discussed value themes such as the “overview of e-commerce in 2006”, “e-commerce after Vietnam’s entry to the WTO”, “e-commerce development experience for developing countries,” and others.   In addition, solutions providers, members of Vietnam Small and Medium Enterprise Association and application providers shared comprehensive ecommerce experience with Vietnamese enterprises. Banks also brought online payment solutions - a core link in ecommerce development, to the conference.

Both enterprises and consumers are aware of the increasingly important role of electronic commerce nowadays. Together with the strong development of ecommerce by banks, providers of essential services such as electricity, water and telephone have begun accepting e-payment and the use of credit cards for transactions are becoming more and more popular in major cities. The following statistics of the Bank for Foreign Trade of Vietnam (Vietcombank) have proved these changes. In 2005, the payment through Vietcombank’s cards accounted for only one per cent of the total payment of cardholders with the bank. But the amount soared to 15 per cent as of July 2006. Regarding this matter, Mr Le Xuan Vu, Director of Techcombank Card Service - Technology Supply and Development Centre, said at the Vietnam E-Business Forum 2007 (VeBiz 2007) that “Banks are clearly aware of the roles as well as the development trends of e-commerce. Furthermore, the demand of the clients and the supplier community forces banks to join the business.”

 

As for businesses, they have understood the importance of e-commerce more deeply. Most of companies have got accustomed with this method of business and set up their own websites to give information to concerned people and carry out contacts and transactions with their clients. Besides, companies also understand the benefits from e-business environment. At present, Vietnam has about 30 e-commerce portals operated in the mode of B2B (business-to-business), some 80 companies using B2C mode (business-to-customer) and many companies using C2C mode (customer-to-customer). Companies in Vietnam have various options for big B2B e-commerce portals, such as www.ecvn.com.vn and www.vnemart.com. These e-commerce portals have brought numerous valuable contracts for their members. For example, Vietnam Industrial Technology and Equipment Joint Stock Company (Vintec jsc) has signed 15 big contracts, totally valued VND6 billion, with 12 large companies although it registered to the portal only from March 2006. Furthermore, the company can seek potential partners for the future cooperation.

 

The Ministry of Trade’s survey on investment for ecommerce in Vietnamese companies in 2006 showed that above half of surveyed companies said they spent less than 5 per cent of annual expenditures for e-commerce and 13.6 per cent of surveyed units (compared with 3.6 per cent in 2005) invested more than 15 per cent of annual expenditures. This showed that investment for e-commerce drew more concerns. In 2005, only 17.5 per cent of enterprises spent more than 5 per cent of its annual operational expenditures for e-commerce but the proportion soared to 51.7 per cent in 2006. Companies also made due investment for e-commerce personnel to realise their e-business strategies. Many companies have IT and business divisions capable of handling e-commerce at the medium level.

 

Online service supplying is also taking shape. Most services are digital contents (contents for mobile phone, computer games and online training). The revenues generated from digital content services were unavailable for 2006 but the sum was about US$76 milllion in 2005. This is a good result out of US$250 million from the software and software services.

 

 

The e-commerce propaganda and training in the past years has been intensified. Massive media have various forms of propagandas and reflections about the development of e-commerce, urgent requirements and participation methods. E-commerce training is booming, even free courses for enterprises. Basically, current short-term or long-term training methods meet the demand for e-commerce explorations of organisations and individuals in Vietnam. Universities and colleges nationwide are teaching e-commerce to their students. An academic survey in northern schools with economic or business administration departments showed that 75 per cent of school had e-commerce circulars.

 

The statistics from the Vietnam Internet Centre showed that Vietnam now has 15 million internet users, which will double in three years to come. The big market together with quick economic growth is a prerequisite for the strong development of e-commerce in the coming years.