Cross-border e-commerce opens door to global market

06:09 | 23/09/2020 Trade

(VEN) - Cross-border e-commerce is rapidly becoming an indispensable trend in the global economy, and digital transformation is a necessary step for increased exports.

cross border e commerce opens door to global market

Cross-border e-commerce is an indispensable trend

The importance of cross-border e-commerce

According to an assessment by the Vietnam Ecommerce and Digital Economy Agency (IDEA) under the Ministry of Industry and Trade ( MoIT), cross-border e-commerce yields many benefits for both buyers and sellers. With the advantages of cost saving, it helps distribute directly to end-users and is highly suitable for small and medium enterprises.

Vietnam is regarded as one of the fastest growing e-commerce markets in the world at a rate of 35 percent per year, 2.5 times higher than Japan’s. According to Dang Hoang Hai, Director of IDEA, digital transformation will help Vietnamese enterprises, especially small and medium enterprises, find flexible business models, reduce costs, and optimize resources to access global supply chains, and cross-border selling.

According to Hoang Long, Business Development Director of Alibaba Vietnam, despite the outbreak of Covid-19, still achieved good growth with an absolute rate of buyers and more than 15 percent of new sellers. The online market is still growing while the traditional market is affected by the pandemic. According to Tran Xuan Thuy, CEO of Amazon Global Selling Vietnam, e-commerce is developing strongly and the growth rate of cross-border e-commerce will exceed the growth of business activities at points of sale.

Lever for cross-border e-commerce

According to Tran Thanh Hai, Deputy Director of the MoIT’s Foreign Trade Agency, one of the solutions to improve the competitiveness of enterprises is to promote the development of cross-border e-commerce, expanding output markets for Vietnamese products and goods.

Although cross-border e-commerce has generated billions of dollars for Vietnam’s economic activities in recent years, participation in this new global supply chain still faces many limitations and risks. Specifically, both buyers and sellers have encountered difficulties in language and business culture. Buyers often have difficulties in international payment because most Vietnamese do not have international payment cards such as Visa and Mastercard.

Dang Hoang Hai also explained that building a legal framework for cross-border activities is not easy, even in countries with modern legal systems. Therefore, the MoIT will start from specific products that have advantages, and then gradually adjust to suit the market.

The ministry will continue not only to create favorable conditions for businesses to implement e-commerce, but also to reform administration and improve business support in providing opportunities for contacts, exchanges and import partners.

According to the MoIT, focusing on digital transformation, promoting cross-border e-commerce will help businesses participate strongly in new supply chains, replace traditional supply chains that are interrupted and stalled by the pandemic as well as help businesses diversify import and export markets, reducing their dependence on one source.

Lan Anh