E-commerce has become an important support tool, helping businesses to quickly and easily implement business activities on the journey of recovery and development in the new normal context.
According to Deputy Director of the Department of Business Development (Ministry of Planning and Investment) Nguyen Duc Trung, a strong wave of digital transformation in enterprises has taken place in recent years in response to the changes in consumer behaviour as well as management demand.
Enterprises have actively renewed their business models and gradually shifted business activities to digital platforms to cut costs and improve operational efficiency, competitiveness, and adaptation in the new context. In particular, promoting e-commerce is one of the popular solutions and is also becoming a mandatory trend to help businesses survive and develop.
Many new opportunities
According to the Vietnam E-commerce and Digital Economy Agency, the growth rate of e-commerce has remained steady at about 17% per year for the past two years. Particularly in 2021, retail e-commerce revenue reached 13.7 billion USD, accounting for 7% of the total revenue of consumer goods and services nationwide. The percentage of internet users participating in online shopping has also increased to about 90% (from 77% in 2019) with the average online shopping value of each consumer estimated at 270 USD.
It can be seen that e-commerce is bringing many opportunities for businesses. First of all, it is the expansion of the customers. According to Facebook research, more than 81% of consumers have seen a change in shopping habits since the pandemic broke out, shifting to online shopping, and 92% of them have said they will maintain that habit.
Moreover, in non-urban areas that previously had little access to modern forms of commerce, the habit of shopping and doing business online is gradually forming. Reports of major Vietnamese e-commerce platforms show that the number of online sellers in non-urban areas has increased by about 40% in recent time. Opportunities for businesses are also reflected in the variety of online business items. Previously, products sold online were mainly cosmetics and fashion items, but now many other items such as fresh food and fast food are also very popular on e-commerce platforms.
Head of IDEA Policy Office Le Thi Ha said that enterprises are now adapting very quickly to the transition from direct to online business models. The COVID-19 pandemic has become an opportunity for businesses to restructure their business activities, especially in the context that most of Vietnam's major e-commerce platforms, such as Shopee, Tiki, and Lazada, also have preferential policies to support businesses in online business participation.
More importantly, the legal infrastructure related to e-commerce such as taxes, customs, consumer protection, and so on, has basically been completed in a synchronous manner, creating favourable conditions for businesses to develop and increase their competitiveness.
Methodical strategy
So, what do businesses need to prepare to participate in the e-commerce market effectively? Sales Director of Tiki Hanoi Vu Thi Thu found that Vietnamese businesses often choose one e-commerce platform to approach and gradually get used to this new business method rather than entering all platforms at the same time. However, businesses should conduct their sales on many different e-commerce platforms because each e-commerce platform has its own advantages, policies, customer base, and way of operating.
For example, Shopee has a wide customer base, low-cost products and open operations, while Tiki is evaluated in the slightly higher-end segment with a majority of mid-range customers. Each platform has its own strengths, and when enterprises do business on multiple platforms they will quickly learn which trading floor and customers are the most suitable for them. Furthermore, when doing business on multiple platforms, businesses will make the best use of all potentials and make effective use of resources.
Businesses also need to build long-term development strategies, in which price strategy is the most important. On e-commerce platforms, there will be extremely fierce price competition, so pricing strategy is crucial to help businesses determine their position on the trading floor.
In addition, businesses should have a specific and long-term marketing strategy which will often be supported by the platforms where they register. Businesses also need to build a strategy to develop a new customer base from the gradual transition of traditional customers, and at the same time attracting a huge number of online shoppers to become their own potential customers.
“Businesses should not worry much because all e-commerce platforms have their own development strategy and they are always ready to support businesses, especially new brands, in joining e-commerce platforms. All businesses have the opportunity to promote their online business effectively if they have confidence, plans, and active connection with e-commerce platforms,” Thu said.
