Exporting to all four corners

Many local SMEs have seen exports surge after teaming up with global e-commerce platforms.

Exporting to all four corners


The Vietnam Agarwood Center, one of the leading local agarwood manufacturers and suppliers, has sent its products and materials to over 40 countries and territories around the world since seeking out e-commerce platforms a few years ago.

Alibaba.com has become its major export channel, receiving some 100 inquiries a month, 60-70 per cent of which become orders. “Vietnamese small and medium-sized enterprises (SMEs) have strong manufacturing capabilities, while e-commerce is actually lowering barriers for the country’s more than half a million entrepreneurs to take part in global trade,” said Mr. Zhang Kuo, General Manager of Alibaba.com.

Reaching the world

Exporting to all four corners

Joining business-to-business (B2B) e-commerce platforms has helped many local exporters directly approach customers and seize opportunities in the global market while saving on traditional trade promotions.

“Online exporting has become the fastest way for businesses to procure orders quickly as e-commerce in the country has boomed in recent years,” said Mr. Pham Tan Dat, CEO of Miczone, the operator of cross-border trading platform Fado.vn.

“In the past, many businesses traditionally encountered cumbersome procedures and huge outlays of 15-30 per cent when seeking foreign partners or implementing trade promotion programs.”

M.i.i.n, an artificial eyelash manufacturer, also inspired other businesses with how its owner, Ms. Tran Bao Ngoc, saved her business from the brink within two weeks of working with Alibaba.com and is now receiving consistent large monthly orders from markets like the US and Russia.

Similarly, Mr. Vu Trung Son, Director of the Vietnam Agarwood Center, said 90 per cent of its customer portfolio now comes from Alibaba.com.

After officially setting up base in the country a few months ago, Amazon Global Selling Vietnam (AGSV), Alibaba.com’s largest competitor, has also been enabling local SMEs to expand their business to international markets.

The two giants have both committed to supporting SMEs by providing effective sales solutions on e-commerce platforms, like how to develop brands, find potential customers, and manage their online stores.

Vietnam has inherent advantages in manufacturing, especially in the fields of textiles, leather, shoes, and consumer products. “Together with local partners, AGSV will help businesses identify and seize opportunities to export domestic products, diversify global product lists, and contribute to the growth of Vietnam’s economy,” said Mr. Tran Xuan Thuy, AGSV Director.

“We have seen many succeed after launching or extending their business on Amazon, and the AGSV team will help them reach a wider marketplace, explore export opportunities, and receive educational support regarding professional cross-border e-commerce and operational skill sets.” 

Among the many success stories of local small and medium-sized enterprises (SMEs) that transformed their businesses via e-commerce are Paper Color, Mary Craft, and Babu Handmade. Selling globally helps all reach out to a huge number of customers around the world, while saving on sales and marketing costs.

“We learned how to operate the business professionally based on customer feedback,” said Ms. Le Thi Thien Ngan, Founder and CEO of greeting card supplier Paper Color.

“We now export to more than 30 countries and territories and are continuing to grow our own branding. If the number of your customers purchasing via Amazon is growing you will also have more opportunities to sell your products to millions of other customers.”

Mary Craft’s sales, meanwhile, have grown by more than 150 per cent each year since it started selling on Amazon in 2015.

“Amazon helps me reach a wider global market,” said Founder and CEO Ms. Mary Nguyen. “In particular, Fulfillment by Amazon (FBA) helps me meet orders from Amazon and other sales channels. FBA assists us in shipping products to customers within one or two days, which is great for business.” 

Opportunities ahead

Exporting to all four corners

Cross-border trade is growing strongly and together with traditional exports plays an important role in Vietnam’s international trade, according to data from the Ministry of Industry and Trade. Exports increased 2.51 times, from $96.91 billion in 2011 to $243.48 billion in 2018.

 

The Vietnam E-commerce Association (Vecom) has also noted that 32 per cent of all local SMEs have established business relationships with foreign partners through e-commerce channels.

Mr. Dat from Fado.vn said cross-border trade is still to catch up with the pace of the larger e-commerce sector in Vietnam, which grew at an astounding 35 per cent, but he believes it will see high growth in the time to come.

Underpinning this, authorities have been working on a legal framework for e-commerce and cross-border trade, and information and technology infrastructure and cross-border platforms in Vietnam measure up quite favorably against regional countries.

Moreover, Vietnam currently ranks fourth among the Top 10 countries globally with the largest number of suppliers on Alibaba.com, according to Mr. Tran Dinh Toan, Deputy CEO of OSB Holding, a local partner of Alibaba.com.

He also said exporting via e-commerce platforms brings economic efficiency and is suitable to the potential Vietnam’s SMEs possess. Looking to the future, Mr. Kuo from Alibaba.com told VET that it targets to work with 10,000 enterprises in Vietnam within the next five years.

“We have seen great potential in Vietnam as there are a large number of SMEs and they are boosting exports and moving into e-commerce,” said Mr. Thuy from AGSV.

“We also see some individuals looking to earn a second income from an online business. Feedback on Vietnamese products from global customers has been positive because of their high quality and reasonable prices.”

In view of the huge growth potential of Vietnamese vendors, AGSV expects momentum will continue into the future. “Vietnamese enterprises are well known for their manufacturing capabilities and Vietnam has a lot of young talent and strong online communities,” he went on.

“These are essential drivers helping manufacturers market and sell their products successfully on Amazon. We have seen many interesting stories in Vietnam over the last few years.”  

Cross-border barriers

Along with Vietnam’s strengths are also weaknesses, especially at SMEs, such as a lack of human resources support and technology, especially e-commerce and exporting tools, according to AGSV. Many also lack knowledge about cross border e-commerce and this is a focus for the Amazon company.

It plans to strengthen existing cooperative efforts with local partners such as the Vietnam Trade Promotion Agency (Vietrade), Vecom, local online communities, and service providers.

“At the same time, we will explore and establish new partnerships with more local partners to provide a comprehensive ecosystem, from finance, payment, logistics, and account management to brand registry, to make it easier for local vendor partners to grow their business globally with Amazon,” Mr. Thuy said.

Mr. Nguyen Ngoc Dung, Vice Chairman of Vecom, said local enterprises still have limitations in information and knowledge about e-commerce, especially cross-border trade, leading to difficulties and inefficiencies in online exports.

Online is yet to be common because businesses don’t have the skills to confidently sell their products via such channels. The Association has worked with many providers and consulting companies to support businesses in accessing websites to export products. 

There are also certain barriers in global trade that are challenges, such as fraud and trade disputes, according to Ms. Toan from OSB.

Transactions are conducted without face-to-face meetings, so if a business is not familiar with the online environment or equipped with the necessary skills and international trade experience, there are certain implicit risks it must tackle.

He recommended the government complete the legal framework for e-commerce and introduce a comprehensive system of regulatory documents, focusing on promoting the application of e-commerce in key export industries in order to enhance market access and further expand scale, as well as building and developing an e-commerce payment system.

There should also be more practical support for Vietnamese exporters to join cross-border e-commerce trading platforms, which would improve their competitiveness internationally. VN Economic Times

Hong Nhung

E-commerce: an inevitable integration trend

E-commerce: an inevitable integration trend

The application of new technologies - artificial intelligence, big data, cloud computing and Internet of Things - is taking place across the globe.

Year-end promotions heat up Vietnam's e-commerce market

Year-end promotions heat up Vietnam's e-commerce market

The year-end online shopping frenzy has kicked off with giant local and foreign players like Lazada, Tiki, Sendo, and Shopee rolling out promotions since the middle of last month.

 
 

Other News

.
Businesses say Health Ministry's guidance on ‘living together with pandemic’ is inflexible
Businesses say Health Ministry's guidance on ‘living together with pandemic’ is inflexible
FEATUREicon  27/09/2021 

The draft document that guides how to adapt to Covid-19 safely strives for ‘zero Covid’ goal, not ‘living together with the pandemic’, the business community says.

Hanoi authorities maintain consistent strategy in fighting pandemic
Hanoi authorities maintain consistent strategy in fighting pandemic
FEATUREicon  28/09/2021 

“My motto is deploying necessary measures drastically – narrow localization, quick tracing and large-scale testing,” Hanoi Party Committee Secretary Dinh Tien Dung said.

HCM City proposes cooperation mechanism when reopening economy
HCM City proposes cooperation mechanism when reopening economy
FEATUREicon  28/09/2021 

To effectively reopen the economy, HCM City has asked the Government to allow the city to apply its own regulations and a cooperation mechanism among localities.

Quarantine services: gold mine for golf tourism
Quarantine services: gold mine for golf tourism
FEATUREicon  27/09/2021 

In early 2021, 59 foreign tourists arrived in Phuket province in southern Thailand and were quarantined at a luxury hotel for 14 days. This is one of the first groups of international tourists to Thailand under the "resort quarantine" program.

HCM City needs help to rise up after the pandemic
HCM City needs help to rise up after the pandemic
FEATUREicon  27/09/2021 

According to the Ministry of Planning and Investment, Ho Chi Minh City and five provinces in the Southeast region will likely have negative growth in 2021.

A code of conduct for artists
A code of conduct for artists
FEATUREicon  25/09/2021 

The Ministry of Culture, Sports and Tourism is finalizing the draft code of conduct for Vietnamese artists.

VN enterprises can't produce because of lack of materials, parts
VN enterprises can't produce because of lack of materials, parts
FEATUREicon  26/09/2021 

A fish sauce plant using millions of tons of fish has had to close because it cannot buy stopples to bottle products.

Banks offer to sell consumer debts of only hundreds of thousand of VND
Banks offer to sell consumer debts of only hundreds of thousand of VND
FEATUREicon  26/09/2021 

Banks have put on sale consumer debts with no collateral with very small value. One of the debts has the value of VND483,000, including principal, interest and fine.

Seafood exports plummet under social distancing regulations
Seafood exports plummet under social distancing regulations
FEATUREicon  26/09/2021 

The lack of input materials and workers, the increase in production costs, and failure to fulfill orders of partners all have pushed seafood companies into a deadlock. Seafood exports have plummeted.

Hanoi isolation and vaccination strategy helped curb spread of Covid-19
Hanoi isolation and vaccination strategy helped curb spread of Covid-19
FEATUREicon  24/09/2021 

Hanoi's strategy of quickly isolating areas where positive cases were found and carrying out testing campaigns at "lightening speed" helped prevent the spread of the virus.

Investment in charging stations needed for electric car industry
Investment in charging stations needed for electric car industry
FEATUREicon  25/09/2021 

Experts believe that electrified vehicles will be a trend in the world’s automobile industry, including Vietnam.

Real estate market waits for amended Investment Law
Real estate market waits for amended Investment Law
FEATUREicon  24/09/2021 

The amended 2020 Investment Law is expected to expand housing supply.

Inflation arises after stagnation – difficult choice in pandemic
Inflation arises after stagnation – difficult choice in pandemic
FEATUREicon  28/09/2021 

In the US, policymakers are in a dilemma when they want to tighten money pumping into the economy to prevent the risk of high inflation, but they are afraid of losing the recovery momentum.

Vietnam changes way of thinking in fighting Covid-19
Vietnam changes way of thinking in fighting Covid-19
FEATUREicon  23/09/2021 

Since the day Prime Minister Pham Minh Chinh became the Head of the Steering Committee for Covid-19 Prevention and Control, there have been some fundamental changes made in the long march to fight the pandemic.

Domestic travel reopens, but under Covid-19 safety conditions
Domestic travel reopens, but under Covid-19 safety conditions
FEATUREicon  23/09/2021 

Some destinations are ready to reopen to receive travelers, while travel firms are preparing to serve domestic travelers with green cards.

The digital economy in the new normal
The digital economy in the new normal
FEATUREicon  26/09/2021 

Vietnam’s e-commerce has been growing rapidly, and when the pandemic is over, the e-commerce market is expected to be even more robust.

Vaccines arriving later this year to be used for both children and adults
Vaccines arriving later this year to be used for both children and adults
FEATUREicon  23/09/2021 

Dr Pham Van Phuc from the Central Hospital for Tropical Diseases said that research shows that Covid-19 is less dangerous to children than adults and infected children have fewer complications.

Factories with only a few positive Covid-19 cases should remain open under new rules
Factories with only a few positive Covid-19 cases should remain open under new rules
FEATUREicon  22/09/2021 

It’s unreasonable to close a factory with thousands of workers when only one positive case is found, officials have said.

Some cities reopen beaches, restaurants under new rules
Some cities reopen beaches, restaurants under new rules
FEATUREicon  21/09/2021 

The cities and provinces that have controlled Covid outbreaks have reopened some services and received their first travelers.

Tourism reopening: Phu Quoc’s problem, Vietnam’s lesson
Tourism reopening: Phu Quoc’s problem, Vietnam’s lesson
FEATUREicon  22/09/2021 

Reopening Phu Quoc to receive tourists has proven to be a big challenge.

 
 
 
Leave your comment on an article

OR QUICK LOGIN