In September, GNN Express announced it would stop operations because of financial difficulties. The company could not balance receipts and expenditures, and it misused customers’ money paid for goods to cover the company’s operation costs.

VnExpress newspaper quoted sources as reporting that GNN had stolen VND5.5 billion worth of cash on delivery (COD) paid by customers to offset its expenditures. Apart from bank debts, GNN could not pay salaries and social insurance premiums.

Vietnam had only several small-scale delivery firms in 2013, but the figure has reached 60, many of which have larger scale of operation. 

The prediction by experts that the e-commerce market will continue witnessing the high growth rate of 30-40 percent per annum in coming years has encouraged more delivery firms to open.

Besides big freight and forwarding companies, numerous startups with technology apps have joined the fast delivery market.

As many new firms have been set up, the competition has become cutthroat. Many firms are willing to provide services below costs to scramble for contracts. That is why the firms cannot ensure high service quality, frequently losing goods or delivering them late. 

Just after a short period, many small and micro firms which provide COD services went bust as they could not manage the workforce and the cash flow.

Luong Duy Hoai, CEO of Giao Hang Nhanh (fast delivery), admitted that the service of delivering goods and collecting money from customers for suppliers is the ‘living land’ for professional forwarding companies. 

E-commerce firms need to use fast delivery services with high quality and low cost.

Nguyen Hong Long from the Vietnam Post Corporation commented that delivery firms, when established, all want to follow professional business strategies. But later, when they feel pressure from competition, it is more difficult to adhere to professional ethics.

Besides, as delivery firms collect money from customers for sellers, they have big amounts of cash on hand and only think of using money for short-term investments. This affects businesses’ cash rotation.

According to Long, e-commerce firms should choose prestigious companies with legal status as partners to be sure that goods can be delivered as requested and COD money can be taken as soon as possible.

As for the Vietnam Post Corporation, COD money is paid to sellers after 1-2 days depending on the importance of services defined by KPI (key performance indicator).

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