Vietnam has one of the world’s fastest growing e-commerce markets, with an annual growth rate hitting double-digit levels, according to a government official.
“The country’s e-commerce market is growing 35% per year, 2.5 times faster than Japan,” said Lai Viet Anh, deputy director of Vietnam E-commerce and Information Technology Agency under the Ministry of Industry and Trade.
Anh told local media that Vietnam’s e-commerce retail sales growth in 2016-2020 is estimated at 20% per year, and the country’s total retail e-commerce sales would reach US$10 billion by 2020.
In 2017, e-commerce retail sales have expanded by 25% and will become an important part of Vietnam’s e-commerce sector. “E-commerce is expected to become an important infrastructure of Vietnam’s trade sector,” Anh added.
Vietnamese businesses capable of taking advantage of the internet and technology grow 2.1 times faster than others, Anh continued. Small and medium-sized enterprises (SMEs) that spend more than 30% of their budget on technological innovation grow nine times faster than those spending less than 10%.
However, e-commerce has seen some barriers that deter its sustainable development, including low consumer trust in products and services, and concerns over online payment security.
In addition, most Vietnamese e-commerce websites provide only basic services, such as information about products and modes of payment. Services such as digital marketing optimization and connecting online with offline sales need to be added.
Nguyen Quynh Nga, deputy director of the SME Department under Orient Commercial Joint Stock Bank, said one of the main barriers for SMEs was guaranteed assets. In addition, unclear financial reports and unsuitable business plans also made connections between banks and SMEs more difficult in developing e-commerce.
Nga said the participation of SMEs in the global supply chain was limited as the added value was low despite high export turnover.
Photo: Jack Moreh
