E-commerce wings Vietnamese goods to reach out to “big ocean”

Wednesday, 2019-10-23 17:27:34
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Amazon has brought about great opportunities for goods export businesses.
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NDO – Cao Sao Vang (Golden Star Balm), a Vietnamese brand, suddenly became “hot” again in 2017 when it was put up for sale on some major e-commerce channels such as Amazon and Ebay at much higher prices than in the domestic market. Realising the high potential when cooperating with these e-commerce giants, a series of Vietnamese businesses have been seeking to reach out to the “big ocean” through e-commerce.

Winging Vietnamese products

As the owner of a production establishment trading in handicraft products, Nguyen Xuan Chieu Han, General Director and co-founder of Andre Gift Shop, said that made-in-Vietnam handicrafts are being highly favoured on the world market. Along with the traditional export methods, in 2013, Andre Gift Shop found an opportunity to bring its products worldwide with Amazon.

“At that time, e-commerce was not really booming in Vietnam, but Amazon was already a well-known name globally. By “shaking hands” with Amazon, after only a short time, from being just a small-sized business facility, Andre Gift Shop has developed strongly and expanded its scale to 300 square metres with 35 employees. Sales from Amazon now account for 50% of the company’s online sales,” Han stated.

Ecomstone is also one of the handicraft & fine art businesses that have successfully utilised Amazon to conquer the global market. Tony Trieu, the owner of Ecomstone, recalled that before establishing Ecomstone, a company specialised in producing and supplying handmade products, he used to import handicrafts from China for sales, but it was not durable due to problems with goods sources and complicated procedures. With his past experience in running an online business on the e-commerce channel, Tony Trieu came up with the idea of ​​cross-border sales based on this channel and chose Amazon. At the beginning, he faced numerous difficulties in terms of small-scale business and the lack of experience and knowledge about the international market. However, with strong determination and persistent learning, Ecomstone has gradually asserted its reputation with consumers and stood firmly on Amazon. Currently, 90% of Ecomstone’s revenue comes from Amazon.

The aforementioned companies are only two of many Vietnamese enterprises who have made effective use of e-commerce to serve their business production and exports of Vietnamese goods to the world. Evaluating the effectiveness of this form of business, Vu Ba Phu, Director of the Vietnam Trade Promotion Agency – VIETRADE (Ministry of Industry and Trade – MOIT), said that the booming trend of internet and electronic devices is creating great opportunities for Vietnamese firms in accessing customers worldwide. E-commerce both enables businesses to overcome geographical barriers to find customers as well as helping them reduce costs. With a huge number of customers, e-commerce channels, such as Amazon and Ebay, are not only a fertile land but also a door for Vietnamese companies to reach out to the world market.

According to the feedback from businesses, Amazon’s attractiveness comes from the potential number of customers as well as its relatively perfect order fulfillment service (FBA), which helps businesses simplify a lot of stages in product sales. In addition to take charge of packaging and shipping orders, checking, receiving and aggregating payments from customers, FBA supports companies in terms of brand development, marketing and customer care. By this means, enterprises only need to focus on developing the best products.

Amazon currently has more than 175 order fulfillment centres around the world, supporting merchants to ship products to buyers in 185 countries and regions. That's why Amazon can help sellers in many countries to export their products across borders in an effective fashion.

Improving efficiency from e-commerce channels

Export efficiency through e-commerce channels has become conspicuous, but not many businesses have properly utilised this to their advantage. As shown in data from the Vietnam E-Commerce and Digital Economy Agency (MOIT), only 11% of Vietnamese businesses have registered to join e-commerce floors, while 35% of them have established a relationship with foreign partners via online channels. These figures are still too small compared to over 700,000 active businesses at the moment, which is attributed to the companies’ limited e-commerce application skills, poor IT infrastructure and language barriers, as well as the fact that they have yet to be updated with the effective marketing and brand promotion methods and tools.

There is great potential for Vietnamese handicraft products to be exported overseas through e-commerce.

Therefore, the MOIT is developing a cooperation programme with major e-commerce channels to help local firms to build their own brands and access customers, thereby expanding and accelerating their other sales channels to the global market.

Specifically, in its cooperation programme with Amazon over recent times, based on the criteria such as export experience, e-commerce capabilities and human resource qualification, the MOIT has selected 105 enterprises to participate in the training classes, lectured by Amazon experts, in terms of sales and advertisement skills on e-commerce. Up to now, more than half of the chosen companies have successfully opened their sales accounts on Amazon; 16 businesses have their products listed on the website amazon.com; and 14 enterprises have successfully conducted transactions with US consumers.

According to Vu Ba Phu, from the aforementioned results, within the framework of the Export Promotion Programme via Amazone in the 2020-2021 period, VIETRADE will coordinate with Amazon to support businesses to build and develop trademarks through specific activities, including instructing small and medium-sized enterprises (SMEs) to apply and use the Amazon Brand Registry 2.0 or Amazon’s Enhanced Brand Content. At the same time, the agency will work with Amazon to select the best-selling, prestigious Vietnamese products to bring them into the list of goods for prioritised display on Amazon. Through domestic and foreign trade promotion programmes and events, the MOIT will coordinate with Amazon to organise the advertising of participating businesses with best-selling products on Amazon, helping them reach more potential partners, both at home and abroad.

In addition, Amazon will support VIETRADE and other trade promotion organisations of Vietnam to open joint pavilions on Amazon. VIETRADE plans to set up a joint sales account and select a number of businesses with suitable products to co-use this account. This way, SMEs will have the opportunity to practice and learn from experience before independently using their own sales account. Accordingly, each of these joint stores will be the sales representative for dozens of businesses with hundreds of products.

Although the number of businesses who conduct successful sales on Amazon still remains modest, Vietnam’s SMEs have initially penetrated into the US market through e-commerce in the form of businesse-to-customer (B2C). This is also one of the goals that Amazon and the MOIT set out from the early days of negotiations. In the future, this programme promises to bring greater achievements to Vietnamese enterprises.