According to a report by the Vietnam E-commerce Association (VECOM), as of March 2022, 44 out of 63 provinces and cities in the country had built their own e-commerce platforms.

Most of these platforms are developed and managed by local departments of Industry and Trade. Notably, up to 75% of these platforms use national domain names. Funding for construction and operation of these platforms mainly comes from the state budget.

According to VECOM, most e-commerce platforms built and operated by local governments are inefficient, with a low number of transactions, poor range of products, outdated technology, and a lack of support services such as marketing, payment, order fulfillment. Most of these platforms are just websites providing information about sellers and products.

One of the main reasons why e-commerce platforms run by local governments operate inefficiently is the shortage and weakness of e-commerce human resources. Many localities do not have staff trained in e-commerce.

Trinh Khac Toan, an expert in this field, said that many platforms do not have specialized personnel nor a product and brand strategy, and lack understanding of the regulations of the target market, especially when introducing goods to international markets.

Ms. Tran Nhu An - competitiveness advisor and manager of IPSC Project of the US Agency for International Development (USAID) – said that most businesses, especially small ones, cannot compete with global rivals, have not yet met user needs, and quality and design of domestic products do not make a difference.

In Vietnam, there is still a digital divide related to gender and geographical area. Most transactions are made in Hanoi and Ho Chi Minh City. In addition, despite the relatively high smartphone coverage, digital knowledge and skills are still a barrier for women and ethnic minority people to enter the field.

Take advantage of your strengths

While many provinces have set up their own e-commerce floors, Hanoi and Ho Chi Minh City, the two leading localities in e-commerce have said no to operating their own local e-commerce platforms. Instead, they take advantage of the professional e-commerce trading floors.

The northern province of Bac Giang is the most successful example in selling their agricultural products on e-commerce floors. Through online trading platforms, this province sold over 48,000 tons of oranges; 36,000 tons of pomelo, 4,000 tons of custard apple, over 60,000 tons of pork and about 17,000 tons of chicken and a variety of agricultural products… in the last months of 2021 and early months of 2022.

Deputy Minister of Information and Communications Pham Anh Tuan said that, as the focal point to implement the National Digital Transformation Program, accompanying the Ministry of Agriculture and Rural Development to promote the development of the agricultural digital economy, on July 21, the Ministry of Information and Communications issued Decision 1034 approving the "Plan to support agricultural production households on e-commerce platforms, promoting the development of the digital economy of agriculture and rural areas”.

The National Digital Transformation Program approved by the Prime Minister in June 2020 identified agriculture as one of eight priority sectors and fields for digital transformation. Towards the goal of training digital skills, e-commerce business skills and promoting new distribution channels, expanding domestic and international markets, the 1034 Plan has the participation of the Vietnam Post with its Postmart floor and Viettel Group with its voso platform.

In addition to being linked with the Portal of the Ministries of Agriculture and Rural Development, Industry and Trade, the Portal to support agricultural production households on e-commerce floors has also introduced the guidance for agricultural production households to trade and promote products on e-commerce platforms.

According to Metric’s study, Vietnam became the second largest e-commerce market in Southeast Asia in the first half of 2022, behind only Indonesia. Vietnam’s e-commerce market is expected to grow strongly and reach the value of US$39 billion by 2025.

According to the "SYNC Southeast Asia" report, Vietnam is expected to be the fastest growing e-commerce market in Southeast Asia in the next five years.

Duy Anh