Rapidly expanding: Vendors at their shop selling flags and t-shirts in Hanoi. Vietnam’s eCommerce sector grew by 25% last year, making it the fastest-growing market in east Asia. — Bloomberg
HANOI: In the era of globalisation, eComerce is rapidly becoming a popular shopping channel in Vietnam.
However, the strong presence of international eCommerce giants, particularly from China, poses significant challenges for Vietnamese enterprises.
Domestic businesses are not only at risk of losing market share but also face stiff competition in terms of pricing, technology, and logistics.
The expansion of large Chinese platforms like Taobao, Tmall, Pinduoduo, and JD.com, with Vietnamese-language interfaces, signals their intent to dominate the market.
Recently, Vietnamese consumers have become increasingly familiar with Chinese retail platforms such as Taobao, 1688 and Temu, which support direct purchases.
Temu, for instance, offers attractive discounts, free shipping, and promotional codes for buyers across Vietnam, while 1688 has fully localised its transactions, making it easier for Vietnamese customers to shop without language barriers.
The localisation of these platforms gives Chinese companies a competitive edge, forcing Vietnamese businesses to contend with fierce international rivals.
Vietnam’s eCommerce sector grew by 25% last year, making it the fastest-growing market in east Asia and one of the top 10 fastest-growing eCommerce markets globally.
Currently, over 80% of internet users in the country shop online, and eCommerce continues to expand, attracting small and medium-sized enterprises, as well as individual businesses alike.
The Vietnam Industry and Trade Information Centre under the Industry and Trade Ministry forecast that total eCommerce revenue from retail sales of goods could increase by 45% this year, reaching nearly US$30bil and accounting for about 14% of the country’s total retail sales.
This robust growth has drawn not only domestic businesses but also international giants, especially from China.
Experts believe that the increasing number of players in the eCommerce field will lead to positive competition, offering consumers more choices.
More diversity in options enhances the shopping experience and accelerates the development of Vietnam’s eCommerce market, experts say.
Additionally, the presence of foreign platforms compels domestic businesses to innovate, improve product quality, and enhance services.
Phan Danng Tuat, chairman of the Vietnam Association for Supporting Industries, expressed concern about the entry of Chinese retail giants, as reported by Dai Doan Ket.
Meanwhile, BigX chief executive officer Nguyen Van Vung, a service partner of TikTok Shop, remained optimistic, stating that the market still has significant growth potential.
“With more consumers using online shopping, and others gradually joining the trend, the eCommerce market pie will continue to expand,” Vung added.
One of the main advantages of Chinese platforms is their ability to offer competitive prices due to low production costs.
This puts pressure on Vietnamese businesses to adjust their pricing strategies to avoid losing customers.
International platforms also have a technological advantage, applying innovations like artificial intelligence, big data, and automated logistics systems.
Without prompt digital transformation, Vietnamese companies may struggle to keep up, experts warn.
Moreover, while international businesses can easily expand globally due to their infrastructure and partner networks, Vietnamese companies often face challenges in scaling regionally or internationally due to limited resources.
Despite these challenges, there are significant opportunities for Vietnamese enterprises to leverage the global ecosystem and expand their market presence.
Metric business director Pham Bao Trung suggested that domestic sellers should focus on optimising internal capacities and promoting local specialities to adapt and thrive.
“Consistency in product quality and proper brand-building can help local businesses survive and grow in the face of competition,” Trung added.
Information Technology Application Centre deputy director Nguyan Thanh Duong, under the Vietnam Trade Promotion Agency, said that global eCommerce platforms like Alibaba, Amazon, and eBay were opening doors for Vietnamese businesses to export their products.
Cross-border eCommerce is no longer a novel concept, and many Vietnamese businesses have successfully tapped into this channel, particularly in developed markets such as the United States, Europe, and Japan.
Sustainable consumption trends are gaining traction globally, and products from Vietnam including handicrafts, agricultural goods, and wooden products, are increasingly attracting international customers.
Building a strong “Made in Vietnam” brand on eCommerce platforms will help enhance the value of Vietnamese products, creating a competitive edge over goods from other countries.
At the same time, competition with international platforms will drive Vietnamese businesses to accelerate their digital transformation efforts. Instead of viewing international platforms solely as competitors, local businesses can explore partnerships.
Many global platforms are looking for local suppliers to meet diverse consumer needs, offering Vietnamese companies access to global distribution networks and logistics systems to scale up rapidly.
The competition between domestic and international eCommerce businesses will undoubtedly intensify in the coming years.
However, the opportunities for Vietnamese businesses to grow stronger are immense particularly when they harness the power of global eCommerce channels.
Participating in global supply chains, building international brands, and adopting modern technologies will help Vietnamese businesses overcome challenges and integrate them into the global ecosystem. — Viet Nam News/ANN
