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Vietnam’s e-commerce application in 2021

From the first months of 2021, the Covid-19 epidemic began to enter Vietnam. In the midst of that, the government is continuing to implement solutions to effectively achieve the dual goal of “both disease prevention and economic development”. Accompanying the challenges during this period, Vietnam has witnessed many positive changes from shopping habits from traditional to online. This is considered an effective and timely solution in the context of the pandemic.

To get an overview of the situation of e-commerce application in the community and businesses, the Department of E-commerce and Digital Economy – Ministry of Industry and Trade continues to develop the publication of Vietnam E-commerce Report 2021 (White Paper). Vietnam e-commerce in 2021). This year’s publication will provide statistical data on e-commerce from many different angles in the context of Vietnam’s relationship with other countries in the region and the world.

1. Legal policies and management of e-commerce activities

On October 7, 2020, the legal infrastructure directly regulating e-commerce activities was added and improved. Below are updates on a number of important legal documents and policies related to e-commerce issued by the Government and Prime Minister in 2020 and the first and second quarters of 2021. Accordingly, the update Japan will have the following 4 changes:

1.1 Decree No. 126/2020/ND-CP guiding the Law on Tax Administration

Accordingly, Clause 3, Article 30 of Decree No. 126/2020/ND-CP stipulates the case of deduction and payment on behalf of payable tax obligations for overseas suppliers without a permanent establishment in Vietnam. having e-commerce or digital-based business activities with organizations and individuals in Vietnam (overseas suppliers) in case the foreign supplier has not yet registered, listed declare and pay taxes.

1.2 Handling administrative violations in e-commerce

On August 26, 2020, the Government issued Decree No. 98/2020/ND-CP stipulating penalties for administrative violations in commercial activities, production and trading of counterfeit and banned goods and protection of human rights. consumer benefit. At the same time, the lowest fine is 1,000,000 VND and the highest is 40,000,000 VND for individuals, the sanction is twice as high for violating organizations.

1.3 E-commerce is a conditional market access industry for foreign investors

Decree No. 31/2021/ND-CP detailing and guiding the implementation of a number of articles of the Investment Law as follows:

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1.4 Piloting Mobile – Money service

On March 9, 2021, the Prime Minister issued Decision 316/QD-TTg approving the pilot implementation of using telecommunications accounts to pay for goods and services of small value (Mobile Money).

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2. World e-commerce market size

Under the impact of the Covid pandemic, the world’s e-commerce market has experienced a sharp increase in the number of users and those numbers will remain until the new normal. It can be seen that the convenience of this type of online business is gradually replacing online buying and selling methods. Not only in business but also in service, garment, education, etc.

Check out the e-commerce sites with the most traffic in Southeast Asia:

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3. Consumers participate in e-commerce

3.1 Advantages

With a country that is developing strongly in internet services like Vietnam, the demand for online shopping is gradually becoming a trend. Moreover, under the impact of the pandemic, more and more people need to shop and pay online.

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Accordingly, the demand for shopping trends on e-commerce sites accounts for the highest, followed by forums, social networks and mobile applications.. This has helped Vietnam’s e-commerce market operate very actively. exploded in recent years.

Not only domestic shopping needs, many people have been shopping at foreign websites, ready to buy products of sellers on Vietnamese e-commerce exchanges for a number of reasons such as: Price both cheaper Product quality is better, goods have foreign brands, only foreign traders sell,..

3.2 Difficulties

But with that positive result, business and online shopping in recent years still face many difficulties and challenges. The simplest is that users are afraid of revealing customer information, the quality is often worse than advertising, the shipping and customer care is still limited, etc.

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Especially in the time of the epidemic, the source of goods is still rare and the price is often pushed up. makes many people more apprehensive about this type of shopping.

4. E-commerce application enterprises

4.1 Overview of the needs and current situation of e-commerce application of enterprises

According to the survey, most businesses participating in online sales on e-commerce trading floors are large enterprises from abroad.

In which, wholesale and retail is the industry with the highest proportion of 21%, followed by other service activities with 20%, etc. However, the business scale is all medium, small and micro.

It can be seen that the proportion of large enterprises participating in e-commerce trading floors is still low, despite being invested and has great potential for development. However, due to subjective reasons such as a lack of human resources in management and operation, many businesses have had difficulty recruiting these positions.

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The pandemic is gradually changing the trend of consumer shopping needs, online shopping is gradually becoming more popular than traditional forms. However, for businesses, the rate of receiving orders through e-commerce floors is low compared to other sales channels.

According to the survey results, it can be drawn that the low efficiency (26%) of doing business through the e-commerce floor accounts for a very high percentage and is the highest in marketing channels. This is a huge obstacle for businesses because this is a potential sales channel in recent years and in the future.

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4.2 Impact of the epidemic on businesses

It can be said that the pandemic has affected almost every field, from healthcare, education, business, etc. Most of the revenue and number of orders of businesses have been drastically reduced and greatly affected the economy. general business situation. According to statistics of the Ministry of Finance, there have been many service and business enterprises that have announced bankruptcy during the time of the ongoing epidemic because there are enough costs to maintain operations.

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However, the pandemic has also brought businesses good signals because of the efficiency in the online business situation. Whereby:

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5. Operational status of e-commerce websites and applications

Vietnam is currently only in the first stage of accessing e-commerce, while developed countries have passed the stage of trust and experience and transitioned to the familiar use stage. There are many barriers that make Vietnamese people afraid, such as 86% wanting direct advice when making a purchase, 85% of users want to touch the product in person before buying, and 84% of respondents said they are afraid of the quality. quantity of products purchased online.

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5.1 Utilities and support tools provided on website, mobile application

Accordingly, the percentage of websites and mobile applications with integrated social networks tends to decrease (from 77% in 2019 to 63.2% in 2020).

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It is not surprising that Facebook and Zalo are the two social networks most integrated into websites and mobile applications.

5.2 E-commerce on mobile platforms

Mobile is the most popular tool for online ordering with 81%, plus mainly people still use e-commerce websites to shop 74%, followed by Social networks with 36%, down from 51% In 2017, especially the signal from mobile devices increased by more than 10% to 52% compared to 2017.

This shows that the development of e-commerce on iOS and Android mobile platforms is considered a fertile and potential “land” that needs to be fully exploited for development.

According to the Vietnam E-commerce report 2021, there are:

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5.3 Payment methods on website/mobile application

Cash payment still accounts for the majority of purchases over the phone, however this number has decreased by 9% (from 61.5% to 51.5%). It can be seen that the form of using cards, transfers or e-wallets still accounts for a low rate.

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5.4 Business situation on enterprise website/mobile application

According to the survey results, businesses have the rate of ordering through the website is 51.9% and the rate of ordering through e-commerce trading floors is 7.3%.

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5.5 Difficulties

Enterprises evaluate difficulties and obstacles when operating websites and mobile applications on a scale of 0 – 2 (no hindrance: 0, many obstacles: 2).

The source of the article is compiled from: Vietnam E-commerce Report 2021

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