Ecommerce offers lucrative space for SMEs
Export channels through e-commerce have opened up a fast growing business opportunity for firms, especially small and medium sized ones while acting as a method of branching out into foreign markets.
Cross-border ecommerce has yielded revenues of several trillions of USD in recent years with the figure expected to rise. Domestically the ecommerce scene has witnessed rapid growth in the past time, partly due to a young population and the dominance of smartphone users.
Vietnam’s ecommerce market made revenues of USD 7.8 billion in 2018, a 3.5 fold increase against the figure of 2013.
Addressing Vietnam Online Business Forum 2019 held recently in Hanoi, Lai Viet Anh, deputy head of the Vietnam eCommerce and Digital Economy Agency under the Ministry of Industry and Trade, said that if the current ecommerce growth rate of 30% is maintained, revenues would touch USD 13 billion by 2020.
According to a recently-announced Vietnam E-Business Index Report 2019, cross-border ecommerce has developed into an important channel for exports with some 32% of Vietnamese small and medium – sized enterprises (SMEs) establishing business connections with foreign partners.
Currently many of the world’s largest ecommerce platforms such as Amazon.com and Alibaba.com have made overtures about entering the Vietnamese market.
Grace He, Alibaba’s channel Manager in Vietnam, said that in recent years the Southeast Asian country has enjoyed a rapid economic growth rate while attracting large inflows of foreign investment and benefiting from better information technology development than regional peers.
Vietnam is one of Alibaba’s largest markets throughout Asia and is also one of the top 10 countries for export of garments, footwear, seafood, and handicrafts. These products are also suitable for Alibaba’s worldwide partners, said He.
According to the General Department of Vietnam Customs, the nation’s total trade turnover reached roughly USD482 billion last year.
Experts said that online export via ecommerce platforms would bring high levels of economic efficiency and is consistent with the capacity of Vietnamese enterprises, particularly SMEs.
They asserted that ecommerce enables local firms to send goods abroad at a low investment cost, claiming this is also an inevitable trend as worldwide importers are constantly searching for customers via the internet.
Data from the General Statistics Office of Vietnam show that only about 10,100 of enterprises among the total 517,900 firms nationwide are operating on a large scale, representing less than 1.9%, while local SMEs account for 98.1%.
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