Vietnamese Startups Unlocking their Potential through E-commerce Exports

Tuesday, 09/08/2022 19:42 (GTM +7)

Amazon Global Selling Vietnam’s report “Local Sellers, Global Consumers” acknowledges the significant growth of e-commerce in Vietnam, particularly in the export sector, through cross-border sales. The report highlights the immense potential of e-commerce in Vietnam for global consumers.

To gain insights into the growth forecast, current situation, challenges, and proposed solutions for leveraging this potential e-commerce export market in Vietnam, let’s read the below information with ITI Fund.

ITI FUND_ECOMMERCE EXPORT Amazon Global Selling Vietnam’s report acknowledges the growth of e-commerce in Vietnam’s export sector and its potential for global consumers.

E-commerce Export Sector – Growth Forecast

The Amazon Global Selling report predicts that the e-commerce export sector (cross-border sales) in Vietnam will grow by over 20% annually and is expected to generate revenue of VND 256.1 trillion (equivalent to USD 11.1 billion) by 2026, with more than 64% of the total revenue generated by micro, small, and medium-sized enterprises (MSMEs).

The report also suggests that if the B2C e-commerce sector is considered an export industry, it is predicted to be the fifth most vital export industry in Vietnam in the next five years. Currently, cross-border sales account for approximately 36% of the total revenue of the e-commerce industry in Vietnam.

ITI FUND_ECOMMERCE E-commerce export helps businesses enter complex markets with high costs and barriers while reducing operating and distribution costs for end-users.

Furthermore, leveraging e-commerce export will enable businesses to penetrate complex markets with many barriers and high costs associated with traditional trade. This sector also helps to reduce operating and distribution costs for products to end-users.

Actual Status of Vietnam’s E-commerce Exports

According to PwC’s data, at the end of 2021, the percentage of consumers who shop directly at physical stores has decreased to 67% (compared to 76% in 2019), while online platforms and smartphones have increased from 55% to 69%.

Moreover, based on a survey of over 300 MSMEs in Vietnam in 2021, AlphaBeta reported that cross-border retail goods (B2C) revenue reached VND 75.4 trillion (USD 3.3 billion). Of these, 88% of companies stated that e-commerce is crucial to their export activities, and payment is higher than domestic online transactions.

SokFarm exports via Amazon and has branches in several countries, with cross-border sales making up 5% of revenue and targeting 15-20%.

For example, SokFarm, a coconut candy company in Tra Vinh, is actively exporting through Amazon and has branches in the Netherlands, France, Switzerland, Thailand, Japan, and the Americas. The company stated that cross-border retail sales currently account for 5% of total revenue and aim for 15-20%.

Challenges for Vietnam’s E-commerce Exports

Despite the potential opportunities for development and market expansion through e-commerce export, there are still some challenges that Vietnamese startups must face, mainly related to information, capacity, costs, and regulations.

According to the Amazon Global Selling Vietnam report, up to 80% of businesses believe that they lack information about regulations in foreign markets, 85% of companies face barriers to competitiveness in the region and globally, and 81% admit that they are not prepared to meet the preferences and consumer psychology of foreign markets.

To achieve this long-term goal, it is essential to equip businesses and the community with updated information, knowledge about policies, skills in implementing e-commerce and applying digital economic applications.