E-commerce threatens traditional markets, supermarkets in Vietnam

Some manufacturing enterprises are concerned about the possibility that goods will disappear from traditional distribution channels and will have to switch to online retail.

The representative of a consumer goods enterprise attending the FPT Technology Forum 2019 held days ago expressed his concern about the strong rise of famous online retailers, including Alibaba and Amazon.

E-commerce threatens traditional markets, supermarkets in Vietnam



He said the rapid expansion of the two retail networks is threatening manufacturers and traditional distributors. Together with luring customers through online channels, e-commerce firms also squeeze every dong out of enterprises before allowing them to bring goods to customers.

As a result, some manufacturing enterprises have to build up a new business model via electronic applications, provide a list of genuine goods and offer many attractive payment forms to lure customers.

E-commerce has step by step taken customers away from physical shops, traditional markets and supermarkets. A supermarket chain admitted that it has lost a high number of customers to the hands of e-commerce firms.

Previously, consumers only bought non-food products via online channels, but now, they buy everything online, through mouse clicks.

E-commerce has step by step taken customers away from physical shops, traditional markets and supermarkets. A supermarket chain admitted that it has lost a high number of customers to the hands of e-commerce firms.

Nguyen Anh Duc, deputy general director of Saigon Co-op, commented that online trade is the growing tendency all over the world. Retailers have to develop online sales to retain customers.

 


However, e-commerce platforms said they are not goods distributors, but they just connect sellers and buyers.

The representative of Lazada told Nguoi Lao Dong reporters that Lazada doesn’t have the strategy to gradually take up distribution channel. Instead, it just provides manufacturers with a new sale channel which allows them to connect consumers directly.

All enterprises can easily open online stores, with no limitation by geographical distance, and enjoy many preferences. They can also join online marketing campaigns to boost sales.

Affirming that his company began selling online in 2011, when online trade was still fledgling, the general director of a footwear company in HCM City said online sales bring 4 percent of total revenue.

“It is more profitable to sell online because of lower cost. Besides, online sale can help popularize brands,” he said.

Le Thi Thanh Lam, deputy general director of Sai Gon Food, admitted that e-commerce is full of potential but it is still difficult to exploit the channel. Sai Gon Food now has frozen food products on sale in large marketplaces such as Lazada, Tiki, Adayroi and Sendo, but the revenue from online sales remains insignificant.

However, Lam said in 2020, Sai Gon Food will still make heavier investment to develop online sales, a part of the strategy to expand market share. On 2020 Tet sale season, online buyers will be able to buy some kinds of frozen products at lower prices than buying from supermarkets.

Mai Lan 

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