Professionalism required in online exports as small firms expand market share

Boost for micro, small firms

The Covid-19 pandemic has heavily affected business operations, but opened up opportunities for online participation in the global supply chain as most buyers in the world are searching for products through search engines or e-commerce platforms.

Tran Xuan Thuy, director of Amazon Global Selling Vietnam, said the world’s e-commerce revenue would reach more than US$3.3 trillion in 2020. By 2022, the growth rate of e-commerce would exceed the growth rate of offline sales. On the Amazon platform, some small- and medium-sized Vietnamese enterprises are now exporting goods to 30 countries, and opening 4-5 factories in the country, Thuy said.

According to a Thach Ban Group representative, the group’s export volume used to account for only 5-7 percent. However, online exports helped its volume increase to 13 percent in 2019, and the figure is expected to reach more than 20 percent this year.

Vu Tu Thanh, director of the US-ASEAN Business Council, said the application of technology platforms in Vietnam’s exports has recorded remarkable progress compared to other countries in the region.

Thanh found that Thailand’s application of e-commerce in exports is not as high as Vietnam’s because the motivation for digital transformation is not as high, creating yet another opportunity to bring Vietnamese goods to the world, he said.

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry, said import and export activities previously were for large-scale businesses with high economic and financial potential. Today, online exports have completely changed this trend, with micro and small businesses given an equal opportunity to reach out to the world.

Changing mindset

However, participation in this new global supply chain also faces many limitations and risks for Vietnamese consumers, with both buyers and sellers encountering difficulties in terms of language and business culture. In particular, buyers often have difficulty in international payments as the number of Vietnamese people with international payment cards such as Visa and Master remains low. In addition, there are risks with billions of diversified products, designs, quality and reputable sellers on international e-commerce sites.

Thuy said that to achieve success in online exports, Vietnamese businesses should build a professional sales team to serve foreign customers.

Before making a big trade decision, they should seek legal advice, as well as ensure consistent and strict contract terms to avoid risks and fraud, Thuy added.

Hoanh Manh Hue, chair of the Union of Vietnamese Business Associations in Europe, said Vietnamese businesses have strengths in the EU-Vietnam Free Trade Agreement (EVFTA). However, they need to change their business methods - from packaging to interacting with customers - in order to promote online exports.

Dang Hoang Hai, director of the Vietnam E-commerce and Digital Economy Agency under the Ministry of Industry and Trade, said building a legal framework for cross-border activities is not easy, even in countries with advanced legal systems.

The Ministry of Industry and Trade is changing its approach to create a legal framework for all types of goods, starting with specific products with many advantages, Hai said, adding that the ministry is also developing policies to help firms implement e-commerce and support firms’ participation in international exhibitions, fairs and forums in order to promote exports.