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Vietnam’s journey through digital transformation and its dedicated commitment to ecological resilience is an inspiring narrative of progress and responsible growth. However, while the e-commerce landscape has surged with remarkable growth, its rapid trajectory harbours challenges that threaten its sustainability.
Nguyen Van Thanh, Director of the E-Commerce Development Centre within the Ministry of Industry and Trade’s Vietnam E-commerce and Digital Economy Agency, highlights significant concerns about the current state of affairs.
One of the primary issues stems from cutthroat competition among major online shopping platforms and e-commerce platforms. The abundance of suppliers vying for sales on these platforms intensifies competition and oversaturation, making it an arduous arena for sustainable growth.
Moreover, the management of e-commerce in Vietnam faces hurdles in policy formulation, tax management, origin regulation, and product flow control. Despite the opportunities e-commerce presents, the uneven development across different regions, with a substantial disparity between rural and urban areas, poses a potential threat to its future stability. As it stands, a significant chunk of online retail revenue is concentrated in major cities like Hanoi and Ho Chi Minh City, sidelining the potential for balanced nationwide growth.
Several factors compound these challenges. Issues like environmental repercussions from excessive packaging, inadequate regulations, high costs for setting up and maintaining online booths, and logistical bottlenecks act as barriers to sustainable e-commerce development in Vietnam.
Recognising these challenges, the Ministry of Industry and Trade is taking proactive steps. Their focus involves revisiting legal frameworks, especially laws pertaining to Electronic Transactions and Consumer Protection, and devolving certain management aspects to local authorities. Additionally, there’s a concerted effort to bolster supervision in the online sphere and collaborate with social networks and e-commerce platforms to remove illicit products and content, aligning with regulatory standards.
Despite the hurdles, the growth trajectory remains impressive. E-commerce revenue is forecasted to hit approximately US$ 20.5 billion this year, marking a significant leap from the 2018 figure of US$ 8 billion. The continuous surge in online retail revenue, accounting for 7.5% of consumer goods and services nationwide, underscores the sector’s pivotal role in driving economic development and digital transformation.
The dominance of platforms remains evident, with emerging contenders also vying for a share of the market. However, the exponential growth also poses challenges in terms of counterfeit goods and consumer protection.
Tran Huu Linh, Director of the Vietnam Directorate of Market Surveillance, emphasises the pressing need to tackle counterfeit goods in the e-commerce realm, underscoring that without stringent measures, the online environment could become a hub for counterfeit products, eroding consumer trust and impeding economic growth.
Advanced technological solutions are touted as the key to curbing counterfeit products. Le Duc Anh from the Vietnam E-commerce and Digital Economy Agency highlights the imperative of employing cutting-edge technology to trace goods’ origins and identify sellers and buyers in the online space.
Additionally, there’s a collective effort to fortify consumer rights, including the establishment of a digital ecosystem geared towards safeguarding consumer interests and redressing grievances in e-commerce disputes. Dinh Le Hai Ha from the National Economics University stresses the need for holistic management encompassing merchants, e-commerce platforms, and robust technical solutions to combat commercial fraud and ensure customer rights.
Building upon the momentum of Vietnam’s burgeoning digital economy, a recent conference organised by the Vietnam E-commerce and Digital Economy Agency echoed the projections of the e-commerce sector reaching an impressive US$ 20.5 billion this year, underlining its pivotal role.
Deputy Minister Do Thang Hai highlighted the evolution within the domestic e-commerce market, emphasising the emergence of a robust secondary service supply system, encompassing a gamut of technology platform services that facilitate transactions, marketing, communication, and delivery services, further solidifying the sector’s dynamic growth and multifaceted support structures.
While Vietnam’s e-commerce is riding a wave of impressive growth, the journey towards sustainability demands concerted efforts from stakeholders. Balancing competition, fortifying regulatory frameworks, leveraging advanced technology, and prioritising consumer protection will be instrumental in charting a sustainable course for Vietnam’s burgeoning e-commerce landscape.
