CPTPP offers opportunities for e-commerce

08:25 | 24/05/2018 Trade

(VEN) - The recently signed trade agreement among Pacific Rim nations known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is expected to have a strong impact on Vietnam’s e-commerce.

cptpp offers opportunities for e commerce

Opening up opportunities

Dang Hoang Hai, director of the Department of E-commerce and Digital Economy under the Ministry of Industry and Trade, said the CPTPP is a new-generation free trade agreement with a high level of commitment covering trade and non-trade issues. The main objectives of the CPTPP are to eliminate tariffs and technical barriers to import and export goods and services, to agree on common rules and regulations among member countries, and to promote the development of digital commerce.

Chapter 14 of the agreement signed in March deals with e-commerce. It prohibits the imposition of customs duties on digital products, to ensure that products distributed electronically, such as software, music, video, e-books, and games are not disadvantaged. To facilitate digital trade, the chapter includes provisions encouraging CPTPP member countries to promote paperless trading between businesses and the government, such as customs forms in electronic format, as well as providing for electronic authentication and signatures for commercial transactions. In addition, the CPTPP contains commitments on simplification and transparency of customs procedures to facilitate the development of e-commerce.

Chapter 14’s Article 13 stipulates that no party shall require a covered person to use or locate computing facilities in that party’s territory as a condition for conducting business in that territory. In addition, it should ensure the free flow of data (subject to public-interest regulation, for example to prevent spam, protect privacy, and fight crime), prevent the spread of ‘forced localization’ of technologies and servers, such as redundant data centers, and help to more effectively guarantee the security and privacy of internet users through consumer protection laws.

These regulations will strengthen the belief of Vietnamese consumers in e-commerce. The trade pact also provides opportunities for Vietnam to review e-commerce rules in line with the CPTPP regulations.

Taking the initiative

Vietnam’s e-commerce has seen a fast pace of development and become increasingly popular. Vietnam’s e-commerce growth in 2017 was estimated at over 25 percent, among the fastest in the world, and the rate is expected to be maintained during the 2018-2020 period. This means that Vietnam’s e-commerce is well positioned to take full advantage of the opportunities provided by the CPTPP.

Vietnam’s e-commerce growth is attributed to the spread of internet and technology services. In 2017, Vietnam had 53.86 million internet users. This figure is projected to grow to 59.48 million by 2022.

In addition to the enthusiasm of network providers with the goal of 4G coverage nationwide, the government’s macroeconomic policy plays an important role in online business. According to the master plan of e-commerce in the 2016-2020 period, Vietnam’s online shopping is projected to continue booming, with online sales estimated to reach US$10 billion by 2020, and up to 30 percent of the Vietnamese population will be involved in online shopping by 2020.

However, to make full use of opportunities provided by the CPTPP and compete with big foreign names, domestic companies need to acquire knowledge and skills, and formulate business strategies with long-term goals. In addition, state management agencies need to study reforms and innovation, especially improving the legal system, mechanisms and policies to implement the CPTPP commitments effectively, in order to create a fair and transparent business environment, and encouraging the development of e-commerce and digital economy.

About 55 percent of local consumers surveyed by Nielsen Vietnam confirmed their willingness to use IT devices to access online shopping. In addition, the number of social network users in Vietnam reached 35.8 million, with an average of 24.7 hours per week online. By 2025, about 49 percent of the Vietnamese population will live in urban areas, and high-income households are expected to increase to nearly 25 percent, pointing to a huge potential for e-commerce development.

Quynh Nga & Lan Anh