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Vietnam's e-commerce grows quickly but unsustainably

Despite its very high growth rate, Vietnam’s e-commerce was actually growing unsustainably, said Nguyen Van Thanh, Director of the E-Commerce Development Centre under the Ministry of Industry and Trade’s Vietnam E-commerce and Digital Economy Agency.
Vietnam's e-commerce grows quickly but unsustainably ảnh 1Illustrative image (Photo: tapchicongthuong.vn)
Hanoi (VNS/VNA) - Despite its very high growth rate,Vietnam’s e-commerce was actually growing unsustainably, said Nguyen Van Thanh,Director of the E-Commerce Development Centre under the Ministry of Industryand Trade’s Vietnam E-commerce and Digital Economy Agency.

This is firstly because the competition on the e-commerceplatforms Shopee, Lazada, and TikTok Shop is currently very fierce.

"There are many suppliers operating on the same platform tosell the same goods, so the competition on the exchanges is huge,"commented Thanh.

According to Ho Chi Minh City’s Department of Industry and Trade,with the strong and rapid development of e-commerce activities, statemanagement of e-commerce is still limited, especially in promotion anddevelopment policies and tax management policies, origin management, and goodsflow.

The growth and development of e-commerce has created opportunitiesbut also challenges in state management, especially in building a healthybusiness environment, contributing to promoting the city's economy.

Besides, uneven development among localities is also said tocreate a threat to e-commerce in the future.

Currently, nearly 70% of the population lives in rural areas, butbig cities like Hanoi and HCM City account for 70% of online retail salesnationwide.

In fact, revenue on e-commerce platforms mainly comes from thesetwo cities, over 42 trillion VND (1.75 billion USD) in Hanoi and 57 trillion VNDin HCM City.

Not only that, issues such as environmental pollution due toproduct packaging; limited policies and regulations; high cost of creating andmaintaining a booth; and logistics issues are also reasons why it is difficultfor Vietnamese e-commerce to develop sustainably.

In order to improve the efficiency of e-commerce activities, theMinistry of Industry and Trade will focus on reviewing legal regulations,especially the Law on Electronic Transactions and the Law on ConsumerProtection; decentralisation to localities to comprehensively managetransactions between buyers and sellers online.

In the future, the industry and trade sector will strengthenmanagement and supervision activities in the online environment, proactivelyrequest social networks and e-commerce platforms to remove product informationand goods that violate the law.

The authorities will also enhance the sharing of connectiondatabases to exploit information to serve state management in this issue.

The Ministry of Industry and Trade (MoIT) said that e-commercecontinued to be one of the bright spots in Vietnam's digital economicdevelopment, with an estimated revenue of 20.5 billion USD this year.

In 2018, the country's retail e-commerce revenue only reachedabout 8 billion USD but by 2019, it had surpassed the 10 billion USD mark,reaching 10.8 billion USD and increased to 11.8 billion USD in 2020.

The number rose by 20% last year compared to the previous year,reaching 16.4 billion USD, accounting for 7.5% of retail revenue of consumergoods and services nationwide.

The number of consumers participating in online shopping is over54.6 million, with the online shopping value per person reaching nearly 270 USDper year.

From there, it can be affirmed that Vietnamese e-commerce hasgrown strongly for many years and is one of the pioneering fields of thedigital economy, creating motivation for economic development and leadingdigital transformation in business.

In fact, e-commerce sites have constantly been born and developedwith four applications Shopee, Lazada, Tiki and TikTok Shop being the mostpopular and constantly competing with each other to rise to a higher positionin the field of e-commerce.

In addition, there are many other new e-commerce sites that stillhave the potential to compete with major e-commerce sites, such as Sendo, andMobile World.

Anti-counterfeiting and consumer protection on e-commerce

E-commerce had been posing many new challenges for enforcementagencies in the fight against counterfeit goods and consumer protection, saidTran Huu Linh, Director of the Vietnam Directorate of Market Surveillance(DMS).

The DMS coordinated with the National Economics University toorganise a forum on anti-counterfeiting technology and consumer protection ine-commerce in Vietnam in Hanoi this week.

To prevent violations in the online environment, it was necessaryto have human resources, especially appropriate tools and methods, said Linh.

Without appropriate sanctions, the online environment would becomea place to store, distribute and trade counterfeit goods, thereby reducingconsumer confidence and hindering the development of the economy, he said.

Le Duc Anh, Director of the Centre for Information and DigitalTechnology (CID) under the Vietnam E-commerce and Digital Economy Agency(iDEA), Ministry of Industry and Trade (MoIT), pointed out that it wasnecessary to apply advanced technology solutions in identifying sellers andbuyers, and tracing the origin of goods in e-commerce to prevent counterfeitgoods.

Functional units of the MoIT had been making efforts to improvethe infrastructure, legal framework and policies to develop e-commerce anddigital economy, said Anh.

Most recently, this year, the iDEA built a digital ecosystem tostrengthen the protection of consumer rights including a system for managingand resolving complaints and online disputes in e-commerce between people andbusinesses.

Also at the forum, referring to anti-counterfeit solutions andconsumer protection on e-commerce, Dinh Le Hai Ha from the National EconomicsUniversity said that in e-commerce, it was not just about preventingcounterfeit goods, but it was necessary to ensure the full rights of customers.

He proposed that it was necessary to manage merchants providinggoods and services along with merchants organising e-commerce floors ande-commerce ecosystems.

It was also necessary to legally regulate the information use ofshop owner and customer at e-commerce platforms and application providers, headded.

Ha also recommended enhanced delivery invoice management;identifying joint responsibilities in anti-counterfeiting and consumer rightsprotection and technical solutions to provide warning levels and preventcommercial fraud in the online environment./.
VNA

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