PROMOTING CROSSBORDER ECOMMERCE: CURRENT SITUATION AND SOLUTIONS FOR VIETNAM

Crossborder ecommerce is a more complicated form of business than traditional businesses, Vietnam also faces some difficulties such as financial capacity, and qualifications. If Vietnam has no appropriate policies, this will be a great challenge to approach the international markets. Recognizing that perspective, I decided to choose Promoting crossborder ecommerce: current situation and solutions for Vietnam as the research topic with the desire to find out the opportunities and challenges of Vietnam. Besides, this research will provide solutions to help Vietnam improve the quality of its ecommerce industry and compete in the international market.

BANKING ACADEMY

INTERNATIONAL BUSINESS FACULTY

BACHELOR’S THESIS

PROMOTING CROSS-BORDER E-COMMERCE: CURRENT SITUATION

AND SOLUTIONS FOR VIETNAM

Student’s name : Hoang Thi Thao

Student’s ID : 20A4050322 Supervisor : M.A Ngo Duong Minh

Hanoi, May 2021

BANKING ACADEMY

INTERNATIONAL BUSINESS FACULTY

BACHELOR’S THESIS

PROMOTING CROSS-BORDER E-COMMERCE: CURRENT SITUATION

AND SOLUTIONS FOR VIETNAM

Student’s name : Hoang Thi Thao

Student’s ID : 20A4050322 Supervisor : M.A Ngo Duong Minh

Hanoi, May 2021

ACKNOWLEDGEMENT

I would like to thank teachers in Banking Academy, especially lecturers of Faculty of International Business for their devoted guidance throughout the course of my study process Thanks to the teachers' support, I have gained more useful and relevant knowledge to complete this research topic

I want to give my sincerely thank to M.A Ngo Duong Minh - who has always

devoted and supported me to complete my thesis During the research process, I tried to implement this topic completely However, due to the limitation of knowledge and reality experience, this research cannot avoid the shortcomings I look forward to receiving the comments from teachers in the Faculty of International Business to help improve the quality of my thesis

DECLERATION

I assure that my graduation thesis with the topic "Promoting cross-border

e-commerce: current situation and solutions for Vietnam” is my personal research with the

guidance of M.A Ngo Duong Minh - Lecturer of the Faculty of International Business

at Banking Academy Data sources and information used during the study are derived

and cited in accordance with regulations These findings have not been published in any

other studies before at the time of this thesis’s completion I take all responsibility for

my thesis

Student’s signature

Hoang Thi Thao

CONTENTS

ACKNOWLEDGEMENT i

DECLERATION ii

TABLE OF ABBREVIATIONS vi

LIST OF FIGURES vii

LIST OF TABLES vii

INTRODUCTION 1

1 The research motivation 1

2 Research subject and scope 2

3 Research question 3

4 Research objectives 3

5 Research method 3

6 Literature review 4

7 Structure of the topic 9

CHAPTER 1: OVERVIEW OF PROMOTING CROSS-BORDER E-COMMERCE 10

1.1 OVERVIEW OF E-COMMERCE 10

1.1.1 Background of e-commerce 10

1.1.2 Cross-border e-commerce 13

1.2 PROMOTION OF CROSS-BORDER E-COMMERCE 18

1.2.1 Concept of cross-border e-commerce promotion 18

1.2.2 Criteria for assessing cross-border e-commerce promotion 19

1.3 INTERNATIONAL EXPERIENCE IN PROMOTING CROSS-BORDER E-COMMERCE 22

1.3.1 Experience from Singapore 23

1.3.2 Experience from Malaysia 25

1.3.3 Lessons for Vietnam in promoting cross-border e-commerce 26

CHAPTER 2: SITUATION OF CROSS-BORDER E-COMMERCE PROMOTION IN VIETNAM 28

2.1 CURRENT SITUATION OF CROSS-BORDER E-COMMERCE PROMOTION IN VIETNAM 28

2.1.1 The legal framework 28

2.1.2 The infrastructure 30

2.1.3 The human resources 36

2.1.4 Popular e-commerce model in Vietnam 37

2.1.5 The results of cross-border e-commerce promotion in Vietnam 40

2.2 EVALUATE THE CROSS-BORDER E-COMMERCE PROMTION IN VIETNAM 43

2.2.1 Strength 43

2.2.2 Weakness 44

2.2.3 Opportunity 45

2.2.4 Challenge 47

CHAPTER 3: ORIENTATIONS, SOLUTIONS, AND RECOMMENDATIONS IN PROMOTING CROSS-BORDER E-COMMERCE IN VIETNAM 49

3.1 THE DEVELOPMENT ORIENTATION OF CROSS-BORDER E-COMMERCE IN VIETNAM 49

3.2 SOLUTIONS TO PROMOTE CROSS-BORDER E-COMMERCE IN VIETNAM 50

3.2.1 Solutions to improve information technology infrastructure to take

advantage of the international cooperation 51 3.2.2 Solutions to improve the quality of human resources to take advantage

of the FTAs 52 3.3.3 Solutions to develop the quality of the Vietnamese products under the impact of the Covid-19 pandemic 53 3.3.4 Solutions to improve the infrastructure to restrict challenges 54

PROMOTION OF CROSS-BORDER E-COMMERCE IN VIETNAM 54 CONCLUSION 56 REFERENCE

TABLE OF ABBREVIATIONS

APEC Asia-Pacific Economic Cooperation ASEAN Association of Southeast Asian Nations

EDI Electronic Data Interchange

EFT Electronic Fund Transfer

EVFTA European-Vietnam Free Trade Agreement

IMF International Monetary Fund

SMEs Small and Medium Enterprises

VECOM Vietnam E-commerce Association

LIST OF FIGURES

Figure 1.1: Malaysia E-commerce value (MYRbn) period 2016-2020 25 Figure 2.1: The rate of businesses having website 34 Figure 2.2: The frequency of updating information on the website of

INTRODUCTION

1 The research motivation

In recent years, the economy is growing day by day and Vietnam has shown a stable development through numerous trade and finance figures According to the International Monetary Fund (IMF), Vietnam's GDP per capita will increase from 3,416 USD (2019) to nearly 3,500 USD (2020) That figure shows that the size of Vietnam's economy tends to exceed Singapore ($337 billion) and Malaysia ($336 billion) In particular, thanks to the application of the internet and science and technology, Vietnam's e-commerce industry also contributes significant profit to the overall economy of the country Cross-border e-commerce, in particular, has great support in promoting trade, import and export, and at the same time strengthening the cooperative relationship between Vietnam and many countries around the world Vietnam is considered as a country with great potential to promote cross-border e-commerce

Firstly, the demand for e-commerce of consumers is increasing With the advent

of the internet and the development of science and technology, people gradually turned towards convenience not only at work but also in daily living habits Instead of just shopping by traditional methods, consumers can easily access international products and services using technology equipment connected to the network That is also a driving force for businesses to seize opportunities and promptly bring their products to international customers Statistics from VECOM (2018) show that in the period 2014 -

2020, the e-commerce growth rate of Vietnam averaged over 30% per year It is expected that this market size will reach 33 billion USD by 2025, ranking third in Southeast Asia after Indonesia and Thailand

Secondly, Vietnam is actively expanding cooperative relations with many

countries around the world by signing free trade agreements and participating in economic forums In 2020, according to WTO Center Report, Vietnam signed a Free

Trade Agreement (EVFTA) and an Investment Protection Agreement (EVIPA), opening

up opportunities for comprehensive and stronger cooperation between Vietnam and EU EVFTA is a comprehensive, high-quality, balanced agreement of interests for both Vietnam and the EU, and following the provisions of the World Trade Organization (WTO) For Vietnam's exports, as soon as the Agreement comes into effect, the EU will eliminate import duties on about 85.6% of tariff lines, equivalent to 70.3% of Vietnam's export turnover to the EU The expansion of international cooperation has a great influence on the business activities of individuals and organizations, especially in cross-border e-commerce industry

Thirdly, there are few studies on the current situation of cross-border e-commerce

in Vietnam Previous studies were mainly carried out the general theory of e-commerce

or addressed a few minor aspects of e-commerce promotion In addition, many studies

on promoting cross-border e-commerce were conducted more than five years ago, so the data is not updated in the current period

Cross-border e-commerce is a more complicated form of business than traditional businesses, Vietnam also faces some difficulties such as financial capacity, qualifications If Vietnam has no appropriate policies, this will be a great challenge to approach the international markets Recognizing that perspective, I decided to choose

"Promoting cross-border e-commerce: current situation and solutions for Vietnam"

as the research topic with the desire to find out the opportunities and challenges of Vietnam Besides, this research will provide solutions to help Vietnam improve the quality of its e-commerce industry and compete in the international market

2 Research subject and scope

2.1 Research subject

The research subject of this topic is the current situation of cross-border commerce promotion of business organizations, individuals, and the government

e-2.2 Research scope

About the spatial scope: studying individuals and organizations that promote

business through cross-border e-commerce

About the time scope: Collect data and evaluate the current situation of

e-commerce promotion and cross-border e-e-commerce in Vietnam in the period 2015-2020 Since then, solutions and recommendations for Vietnam, development orientation to

In order to clarify that research questions, the research focuses on some objectives

1 Clarify the theory of e-commerce and cross-border e-commerce Besides, find out criterias that affect to cross-border e-commerce promotion

2 Evaluate the current situation, determine the strengths, weaknesses, opportunities and challenges of Vietnam's cross-border e-commerce, specifically in the period 2015-2020

3 Propose solutions for individuals and businesses in Vietnam, make recommendations to relevant ministries, departments in promoting cross-border e-commerce

5 Research method

The research uses a combination of these following research methods

Firstly, the theoretical analysis and synthesis method: Collect mainly from

secondary information sources, commerce documents, focus on cross-border

e-commerce of Vietnam, learn carefully deep into the current situation of Vietnamese individuals and businesses in the cross-border e-commerce promotion; then synthesize that information and documents into new complete and in-depth theory about the object

Secondly, the method of analyzing and summarizing the experience: Deeply

understanding the implementation of e-commerce promotion of countries around the world, from there draw lessons and experiences that applied to Vietnam

Thirdly, the method of data collection: Based on information collected from

available references to build evidence to support the hypotheses The assessment of the current situation of Vietnam in e-commerce should be clearly described through specific data and reports Therefore, the method of data collection is necessary and effective

Fourthly, model-based analysis method: Evaluate problems through building

SWOT model to identify strengths, weaknesses, opportunities and threatens of Vietnamese businesses in cross border e-commerce promotion

6 Literature review

The development of the economy made the international trade expansion become popular in every country in the world Understanding that, they are focusing on promoting e-commerce, especially cross-border e-commerce, enhancing the position in the overall economy There are many articles and researches on e-commerce topic in Vietnam as well as abroad

6.1 Foreign research

According to the research titled “Cross-border e-commerce makes the world

flatter” published in 2014 by the authors Heel, B et al from The Boston Consulting

Group, although e-commerce is the fastest-growing retail channel by far, its growth is being constrained by barriers to cross-border transactions Barriers to cross-border e-commerce promotion are pointed out with some implications for sellers and carriers to compete in an effectively borderless world

The study "The development of Cross border e-commerce" by Juliana, C et al

(2017) shows an increasing amount of people are shopping online across the borders By systematic review recent academic papers and research reports, the current situation of its development was identified Supported by advanced technology, growing demand and advantageous policy, cross-border e-commerce is booming globally However, culture and consumer behavior, laws and regulations, marketing issues, payment conditions and logistics limitations were identified as the main obstacles to its success Because the products in cross-border e-commerce often require long distance transport, the logistics-related issues showed to be still the strongest concern to be addressed and overcome in order to allow such a movement, wherein, long transportation times, bad return service and high shipping costs are increasingly prominent Therefore, a need for international cooperation between all involved parties - governments, merchants and service providers, is called In the end, a proposed responsibility assignment for its development is presented

The importance of developing cross-border e-commerce, particularly in China is

identified by the authors' Ma, S et al (2018) on the topic "Rise of Cross-border

E-commerce Exports in China" Besides, they have given the operational structure and

proved that China is doing effectively this e-commerce promotion In this paper, the author uses quantitative research methods The data utilized for constructing the prosperity index and the risk index for China’s export e-commerce industry are derived from the hosted enterprise database of Jiangsu BizArk E-commerce Co., Ltd BizArk is currently the largest total solution provider of overseas marketing and cross-border e-commerce hosting service platform in China The results show the current situation of China's cross-border e-commerce and the risk of this industry From there, the author proposes solutions to develop e-commerce Besides, they also proposed future researches

Author Shiu-Li Huang, Ya-Chu Chang in the topic "Cross-border e-commerce:

Consumer's intention to shop on foreign websites" (2019) has investigated how

consumers decide to shop across national borders The purpose of this paper is to explore the factors that impact consumer’s intention to shop on foreign websites A conceptual model is developed from the perspectives of consumer perceived trustworthiness and value The authors also examine how vendor signaling and consumers’ attachment styles affect perceived trustworthiness, as well as how benefits and costs affect perceived value This study conducts an online survey to test the research model Perceptions of the vendor’s trustworthiness can increase or decrease depending on consumers’ perceptions

of the level of legal structure and national integrity in the vendor’s country, as well as the vendor’s website policy and reputation Consumers with low levels of attachment avoidance or anxiety also perceive a foreign vendor as being more trustworthy Price competitiveness, product uniqueness, communication cost and waiting cost determine the perceived value of shopping on a foreign vendor’s website This study advances the understanding of cross-border e-commerce in the B2C context The findings can help researchers and practitioners understand the barriers to cross-border e-commerce, and devise strategies to overcome these barriers However, the author only analyzes the customer without mentioning other factors affecting cross-border e-commerce such as infrastructure, human resources, legal system

6.2 Local research

Thesis "E-commerce: The current situation and solutions in Vietnam" (2009) by

Tran Thi Thu Hien has explored the origin of e-commerce, factors affecting the development of e-commerce, and prospects of this industry in Vietnam In this research, the author has given the infrastructure of Vietnam in e-commerce promotion activities, including information technology, human resources, economic, social, and political Regarding Vietnam's opportunities, the author believes that Vietnam will participate in developing e-commerce activities in the future Therefore, it is necessary to improve infrastructure and the quality of human resources as soon as possible However, this research was done in 2009, the author used data and gave solutions for Vietnam from

2005 to 2010 Therefore, the data has changed and is not updated with current trends

Regarding promoting activities, author Bui Duc Tuan (2009) in the study

"E-commerce - Choosing export promotion channels and human resources" focuses on

analyzing the benefits of using e-commerce to access international markets of import and export businesses The study shows that export activities are playing an important role in the Vietnamese economy E-commerce promotion opens up new markets, new partners for the businesses Exporters can use e-commerce as a channel to quickly and cost-effectively expand the market However, in order to succeed in e-commerce, businesses need to choose the appropriate promotion channel, focus on that channel In this study, the author only mentioned the promotion channel aspect and the human resource system, there are no other factors in supporting the export activities such as infrastructure

In the research titled "Discussion about e-commerce promotion tools" written by

Vu Thu Ha (2014), E-commerce promotion tools mentioned include: online advertising, e-sales promotion, e-public relations marketing, direct e-marketing In this paper, based

on development of information technology, telecommunications and the Internet, trade promotion according to traditional methods no longer able to make a strong competitiveness for businesses as before E-commerce promotion using websites, electronic media and telecommunication networks help to reduce costs, improve the efficiency of introducing products/ services and establish stronger relationships with customers in your business Today, the current numbers of Vietnamese business applies promotional tools in electronic trade is still limited and not have good results This paper analyzes the characteristics and advantages of the application of electronic promotion tools From this, the authors hope Vietnamese businesses have the great appreciation with the e-commerce promotion tools and applying them in the development strategies

of the enterprise businesses usefully

The article titled “E-Commerce Platform – Road To Success In Vietnam And

Cross-Border Trading”, which was written by ASL LAW and published on Vietnam

Law Magazine in 2019, demonstrates some difficulties and challenges for the success of

cross-border e-commerce in Vietnam The article highlighted that e-commerce is

“internet-based service” and without internet, e-commerce cannot develop and spread its influence on the global economic and Vietnam’s economic today After presenting statistics of the current situation of Vietnam’s e-commerce, ASL LAW analyzed drawbacks of Vietnam’s legal framework on e-commerce and gave demonstration This helps the author identify the lack of a united legal document as the main barrier to Vietnam’s cross-border e-commerce However, this article focused on the status of e-commerce within Vietnam and only mentioned cross-border e-commerce in few paragraphs, which is not sufficient to help readers comprehensively understand Vietnam’s cross-border e-commerce Besides, the author only presented the current issues but did not suggest any solutions to improve the situation

The thesis "Cross-border e-commerce: Promote Vietnamese goods to the global

market" by Nguyen Ha Minh Hanh (2020) found that cross-border e-commerce is a new

trend of the economy In this paper, the author used quantitative methods, collecting data from businesses and the Government's reports to make assessments The author explores the current situation of Vietnam's e-commerce promotion based on the following factors: legal framework, payment system, logistics system Besides, the author also analyzes some case studies of Vietnam in promoting the export of Vietnamese products at e-commerce floors like Amazon, eBay, Etsy It can be seen that Vietnam still has many limitations in boosting exports in e-commerce The author has given solutions and recommendations for the Government of Vietnam and related agencies to develop this cross-border e-commerce industry

6.3 The literature gaps

In general, there has been very little in-depth research on the current situation of Vietnam’s cross-border e-commerce over the last 5 years Although the number of e-commerce articles in Vietnam is relatively large, these studies are mainly done at the level of general theory of e-commerce or refer to a few aspects of Vietnam's cross-border e-commerce promotion (customer’s perspective, legal system, logistics,…) If the study

is about the promotion of cross-border e-commerce, it is already conducted more than 5 years ago, so the data are not updated in the new period Therefore, it is necessary to do the research about cross-border e-commerce in Vietnam with the data in 2015-2020 period This thesis will focus on the current situation of Vietnam’s e-commerce promotion with all of these aspects: the infrastructure, the human resourse, the Government’s policies

7 Structure of the topic

Chapter 1: Overview of promoting cross-border e-commerce

Chapter 2: Current situation of cross-border e-commerce promotion in Vietnam Chapter 3: Orientations, solutions and recommendations to promote cross-border

e-commerce in Vietnam

CHAPTER 1: OVERVIEW OF PROMOTING CROSS-BORDER

E-COMMERCE

1.1 OVERVIEW OF E-COMMERCE

1.1.1 Background of e-commerce

1.1.1.1 Origin and definition of e-commerce

a The origin of e-commerce

EFT (Electronic Fund Transfer) was released in the 1970s, which means the whole process of processing a money transfer over a computerized network from the time it receives a money order from the sender to the completion of the order the payment to the payee or the collection of the debt from the receiver This positively supports payments between businesses and organizations Banks use this system to exchange account information on highly secure networks Next is EDI (Electronic Data interchange), a technology used to transfer documents and data between large enterprises

In 1969, the internet was released Initially, the internet was only used by the US government, then expanded into universities and research institutes In the 1990s, the commercialized internet led to the introduction of the World Wide Web Since then, it began to take shape with the name e-commerce

Despite the fact that the internet was ready to use in 1995 and became popular in

2000 in Vietnam, the concept of e-commerce was still unfamiliar to many people in the period 2000 – 2003 Since 2004, e-commerce has become popular

b Definition of e-commerce

According to the World Trade Organization (WTO), “E-commerce includes the production, advertising, sales and distribution of products that are bought and sold and paid for on the Internet, but tangibly delivered, both forwarding products as well as digital information via the Internet”

The E-Commerce Committee of the Asia-Pacific Economic Cooperation (APEC) defined that “E-commerce refers to the exchange of goods and services between groups (or personal) is electronic primarily through Internet-based systems.” Communication technologies are email, EDI, Internet, and Extranet that can be used to support e-commerce

In Vietnam, according to Decree No 52/2013/ND-CP on e-commerce: commerce is the conduct of part or the whole process of commercial activities by electronic means with the connection to the internet, mobile telecommunications networks or other open networks"

“E-1.1.1.2 Characteristics of e-commerce

Firstly, the development of e-commerce is closely linked to and interacts with the

development of information and communication technology E-commerce is the application of information technology to all commercial activities, so the development

of information technology will promote e-commerce development

Secondly, e-commerce transactions are processed via the Internet In traditional

commerce, the parties must meet face to face to negotiate, transact and sign contracts However, in e-commerce activities, they do not need to have direct meetings but can negotiate and close the deal even though they are in any country

Thirdly, the market in e-commerce is a global market This shows that people in

all countries of the world do not need to move to any location but can participate in the same transaction by visiting commercial websites, e-commerce trading floors, social networking sites, or mobile apps Traditional commercial transactions are carried out with the existence of national borders, while e-commerce is carried out in a market without geographical barriers (global market) E-commerce directly affects the global competitive environment

Fourthly, the parties in e-commerce activities must have at least three

participants They are the seller, the buyer, and the third party is the network service

providers, the authentication agency These are the actors that create the environment for e-commerce transactions The parties conducting transactions in e-commerce do not contact each other directly and do not require to know each other in advance

Fifthly, transaction time is not limited The parties related to e-commerce

activities can conduct transactions 24/7 within 365 consecutive days, wherever there is

a telecommunications network and electronic facilities that connect to these networks This is a great advantage of e-commerce business for both sellers and their customers

Lastly, in e-commerce, the information system plays an important role In order

that the subjects do not need to meet face to face but can negotiate and sign contracts, the parties must access the partner's system via the internet to find out data In traditional commerce, the information network is only a means to exchange data, while for e-commerce, that is the transaction place

1.1.1.3 Classification of e-commerce

a Classifying e-commerce according to the type of products

Firstly, the physical goods These are the typical online tangtible products

Shoppers can buy physical goods through online stores by visiting the store’s websites, adding items in their shopping cart, and making a purchase Once the shopper has made

a purchase, the store delivers the item directly to them There are also online stores where customers can make an online purchase but go to the store themselves to pick up the products

Secondly, the e-tailing services Aside from products, services can also be

purchased online The buying process for services depends on the merchant Some may allow the customers to purchase their services straightaway from the company’s website

or platform Some service providers, on the other hand, require customers to get in touch with them first to determine their needs

Thirdly, the digital products E-commerce transactions are conducted via the

internet The term digital products refer to all items that are in a digital format including ebooks, online courses, software, graphics, and virtual goods

b Classifying e-commerce according to the parties involved

There are three main participators involved in e-commerce transactions: Government (G), business(B), and individual customer (C) With the combination of each object, different business models are formed:

Table 1.1 The types of e-commerce by the parties involved

Government (G) Business (B) Customer (C)

Source: Tran Ngoc Thap (2018)

B2B and B2C are the two most prominent types of e-Commerce in the world today and they are the traditional transaction types that most people think of when they hear the word "e-commerce" B2B is when businesses sell to other businesses and B2C

is the most commonly thought of business model where merchants sell to consumers who buy a small amount of product

1.1.2 Cross-border e-commerce

1.1.2.1 The concept of cross border e-commerce

The term “cross-border e-commerce” existed around a decade ago Cross-border e-commerce today is totally different to the international electronic trade discussed, for instance, in Bradley et al (1999), as its key function has shifted from exhibiting information of online sellers and buyers to fulfilling online exchange of funds (Terzi, 2011; Wang, 2014) Cross-border e-commerce is a novel form of trade, which has developed with the spread and advancement of the Internet

Cross-border e-commerce generally refers to transactions between different countries or regions who communicate via the Internet, email or other forms It is a new

international trade patterns which is smaller, more often and faster than before (The Development and Current of Cross-border E-commerce - Wanxin X., 2018)

According to “Cross-border e-commerce total page” (Janine N., 2016), “The term cross-border e-commerce generally defines international online trade It entails the sale

or purchase of products via online shops across national borders Buyer and seller are not located in the same country and are often not ruled by the same jurisdiction, use different currencies, and speak different languages

Cross-border ecommerce can refer to online trade between a business (retailer or brand) and a consumer (B2C), between two businesses, often brands or wholesalers (B2B), or between two private persons (C2C), via marketplace platforms”

E-commerce, just like the Internet, is a borderless market, which enables customers do shopping via the Internet from the furthest corners of the world Although most customers who do shopping online still choose national Internet shops, purchases from shops located outside the country enjoy more and more popularity This is called cross-border e-commerce (Arkadiusz K & Wojciech Z., 2016)

1.1.2.2 The benefits of cross-border e-commerce

The rapidly growing of cross-border e-commerce in the world has opened up many opportunities for businesses and individuals, and at the same time brought benefits

to them, making a significant contribution to economic development

a Benefits for businesses

Firstly, cross-border e-commerce not only helps businesses expand domestic but

also international markets With cross-border e-commerce, businesses can access many suppliers and buy products around the world, so they can buy and resell goods at a better price Besides, this is a great opportunity for SMEs to reach international markets, directly approach end-users, build relationships with foreign customers without a meeting, have no barriers, and costly as the traditional method

Secondly, cross-border commerce has impact on production Cross-border

e-commerce creates changes in the production system, such as from mass production system to market-driven production, as well as the application of control methods such

as time management (JIT) In addition, the production line is integrated with the finance, marketing, and other functional departments Information exchange, cooperation, and operational coordination become key elements in the linking system

Thirdly, cross-border e-commerce helps businesses gather information

E-commerce helps businesses gather a lot of information about markets and business partners, from which they can build up production and business strategies suitable for the development trend of the domestic and international markets In addition, cross-border e-commerce also helps businesses collect feedback from customers, which is the foundation for changes and improvements to perfect the customer services In traditional commerce, the process of collecting customer feedback is often difficult and takes place longer than in e-commerce

Fourthly, cross-border e-commerce helps businesses reduce costs E-commerce

creates changes in the structure of the business: With the feature of promoting direct relationships between customers and suppliers via the Internet, e-commerce can eliminate the role of intermediaries in traditional distribution channels This has reduced the distribution costs of the business

Fifthly, cross-border e-commerce helps businesses bring better services to

customers Customer service can be understood as all activities that a business needs to

do to meet the demand of its customers In the increasingly competitive environment, customers become more and more sophisticated, so customer service becomes an important factor for businesses in finding and keeping customers With its outstanding features and advantages, e-commerce gives businesses the tools to satisfy customers Indeed, with cross-border e-commerce, businesses can provide catalogs, information, and quotation quickly, which can assist foreign customers to buy directly from the Internet In addition, with e-commerce, all information about businesses, products, and

services is regularly updated to create conditions for customers to access the latest information In particular, it is much easier to receive customer feedback

Sixthly, cross-border e-commerce helps businesses increase their competitive

advantages SMEs often find it difficult to compete with large-scale enterprises because

of many reasons such as lack of capital, lack of market share, human resources, and small customers quantities Thanks to cross-border e-commerce, these difficulties and gaps are narrowed because these businesses can reduce several costs when conducting e-commerce transactions, helping businesses create their new business method, thereby supporting competitive advantages, helping businesses, especially SMEs, can compete with other competitors

Lastly, border e-commerce helps businesses increase revenue In

cross-border e-commerce, business and customers are no longer limited in terms of geography

or time Enterprises can actively seek and communicate with their foreign customers Therefore, the number of customers will increase, contributing to boost revenue for the business However, to maintain that, the quality and price of the products and services

of the business must always meet the needs of the market

b Benefits for customers

Firstly, cross-border e-commerce makes it easier for customers to choose

products and services In traditional commerce, customers are hindered by time, space, delays, and lack of information making their buying decision not optimal, while in e-commerce, there is more information (such as prices, features, additional services .) about the products and services It helps customers to search, consider and make decisions about the brand and product supplier by themselves In addition, the customer's choice of products, services, and suppliers is not confined to a certain geographical area They can choose products from foreign markets (Conditions can be met for online purchases)

Secondly, thanks to cross-border e-commerce, customers can minimize their

buying costs In traditional commerce, to buy the desired products and services, customers sometimes have to pay a lot of expenses, such as the costs of searching for products or services information (phone costs, travel costs to check the goods), the transportation cost However, with the development of e-commerce, especially cross-border e-commerce, these costs are significantly reduced For example, with only a small fee for Internet access, customers can check a wide variety of items without having to call the company or go directly to the store

Besides, e-commerce helps customers save a lot of time to buy With a personal computer connected to the Internet and under the enabling conditions of e-commerce, customers can quickly go through the entire purchasing process (search, review, compare and make payment) When cross-border e-commerce becomes a popular business method, customers no longer lack information about the international products or services they want to buy, spend a lot of time searching for goods, visit to the store to buy themselves

Thirdly, cross-border e-commerce contributes to satisfied customers

Cross-border e-commerce makes it easier for customers to choose products and services as well

as save purchase costs including money and time The faster buying process will make customers feel satisfied when making online purchases

c Benefits to the economy

Firstly, cross-border e-commerce facilitates the national economy to access

knowledge and integrates it into the world economy International economic integration has become a consistent foreign economic policy of many countries, including Vietnam

In particular, the development of e-commerce will stimulate the development of information technology, data mining, and knowledge discovery This benefit has great implications for developing countries as without rapid access to the knowledge economy, developing countries could be lagged behind Some economic experts believe

that the early transition to a knowledge economy can help a developing country to catch

up with developed countries in a shorter time

Secondly, cross-border e-commerce helps to reduce traffic congestion and

accidents The foundation of e-commerce is the computer network, including the Internet and modern devices of communication such as telecommunications satellites, cables, radio, and others Due to the development of computer networks, everything can be handled through the home network, so the number of people and vehicles on the road will be reduced, thus avoiding congestion, accidents, and reducing the environmental pollution

Lastly, raising living standards and increasing social welfare E-commerce

enables low-income people, and those who live in remote areas to access goods at suitable prices, thereby helping to improve people's living standards and awareness In addition, e-commerce also gives third-world countries and remote areas access to products and services that are not normally intended for these markets (including education and training services); Facilitate the distribution of public services such as health care, education, and government social services at preferential prices and high quality

1.2 PROMOTION OF CROSS-BORDER E-COMMERCE

1.2.1 Concept of cross-border e-commerce promotion

E-commerce promotion can be known as all the measures that can influence, and encourage the development of a part of or the whole process of commercial activities by electronic devices that are connected to the internet

Cross-border e-commerce promotion, which could make distance shorten between product and market in time and space It will be the main means to facilitate trade, upgrade trade development and promote the effective implementation of national policy There is a new development of cross-border e-commerce and it also spawned a new ecological model It will help cross-border ecommerce develop better through

building a new ecosystem based on cross-border e-commerce business model (Wanxin X., 2016)

Cross-border e-commerce is playing an important role in transforming traditional international trade and boosting economies In traditional cross-border trade, customers can purchase overseas products through a long supply chain involving several intermediaries Cross-border e-commerce shortens this supply chain by involving cross-border e-commerce platforms as the intermediaries along the supply chain, which also substantially reduces customer's waiting times (Xu, 2017) This trend of consumption upgrading is regarded as another driver for the promotion of cross-border e-commerce (Nielsen, 2017)

Cross-border e-commerce promotion is the implementation of measures to support import and export activities through electronic means, between parties in transactions from different countries Cross-border e-commerce promotion includes two activities: export promotion and import promotion through e-commerce Promotion of export (import) through e-commerce is the activities aimed at increasing the export (import) of a country or a business through e-commerce platforms (Le Hong Nhung, 2019)

1.2.2 Criteria for assessing cross-border e-commerce promotion

a) The infrastructure

E-commerce is gradually taking an important role in the overall economy Therefore, to assess the development of this industry, especially in promoting cross-border e-commerce, it is obligated to mention the infrastructure

Firstly, the information technology system Information technology drives

innovation in businesses That is demonstrated through intelligent applications, improved data storage, faster processing, and wider distribution of information The rapid growth of the internet created an exaggerated expectation that it would enable companies to create a new, standardized mode of communication (Sinkovics, 2007) The

development of information technology also helps to improve the working system, support businesses to operate more efficiently In promoting cross-border e-commerce, the application of information technology greatly supports the process of buying, selling, and exchanging goods, especially through international e-commerce floors, websites

Secondly, the payment system Cross-border e-commerce is the implementation

of transactions between different countries, so the payment process is also different from domestical trade Electronic payments can be understood as a payment mechanism using electronic media that does not involve cash E-payment is an important aspect of e-commerce (Fatonah S., 2018) Electronic payment is increasingly popular because of its convenience and shortens transaction time and order fulfillment for businesses as well

as customers In the past, the purchase and sale of goods were normally exchanged for cash, but in e-commerce, consumers aimed for safety, convenience and transparency, so there were many forms of electronic payment such as card payment, gateway payment, e-wallet payment, mobile app payment (mobile banking, QR code, )

Thirdly, the logistics system Logistics is an important link in the supply chain,

this is the movement of goods to the end customers However, in cross-border commerce, customers are in different countries, so it will be more difficult to transport goods compared to buying and selling domestically Since the operations of e-commerce logistics system directly affect the realization of transactions and the experience of the customers, it is an important assurance for supporting the development of cross-border e-commerce business (Jiao Z., 2015) The development of strategies to improve the quality of transport forwarding and administrative procedures will actively support the promotion of e-commerce

e-b) The human resources

The importance of human resources has increased significantly due to new places and the role of the human in all sectors of society (Jurčević, 2009) Cross-border e-commerce promotion requires high-quality human resources, deep expertise in professional knowledges, international law and regulations, foreign language skills, and

the ability to apply information technology Improving the quality of human resources has a great influence on the construction of cross-border e-commerce systems

c) The size and growth rate of the industry

This is a criterion to evaluate the development of e-commerce in general and cross-border e-commerce in particular The use of growth rate is one of the simplest methods to estimate the future growth of an industry, helping to determine whether the industry has growth potential or not, and then come up with building strategies to overcome, improve efficiency The scale and growth rate are shown in reports and statistics of agencies, organizations, or enterprises Cross-border e-commerce promotion will be assessed focusing on the following subjects:

First, import-export enterprises: This is an important subject in the cross-border

e-commerce system Import-export enterprises are the owners of products They devise strategies aimed at bringing goods to consumers in other countries around the world, while also importing goods from foreign partners Import-export enterprises can actively promote cross-border e-commerce through email offers, or use international e-commerce floors, websites to post products and get close to the targeted customers

Second, e-commerce enterprises: This is the enterprise that owns the e-commerce

floor They are responsible for connecting sellers and buyers through the e-commerce floor system and websites The famous international e-commerce floors are Amazon.com, Alibaba.com, Ebay.com, The quality of e-commerce floors has been upgraded and improved to suit consumers or business partners using a floor service Enterprises providing e-commerce services are an important link in promoting e-commerce, especially cross-border e-commerce

d) The industry development policies

The burgeoning cross-border e-commerce industry has become an essential impetus of the innovation-driven development strategy of the economy However, sustainable healthy development of this industry requires regulation as well as support

from policies (Ma, S & Zhang, H., 2018) Government policies and the legal system at the national and international level play an important role in implementing sector development strategies, especially for cross-border e-commerce The essence of cross-border e-commerce is transactions made through the internet and between entities in different countries, so it is also governed by domestic laws as well as international law

If there is a response and support from the government, e-commerce promotion will become effectively

The Government plays a key role in trade promotion They enacted policies, build legal systems to support and develop e-commerce development That is reflected in activities such as: Supporting the construction of infrastructure; Establishing the legal basis for cross-border e-commerce; Administrative reform; Expand international cooperation relations and sign cross-border e-commerce agreements with countries in the world; Organizing seminars and training courses to improve the quality of the cross-border e-commerce industry; Actively build a website to promote online export activities

1.3 INTERNATIONAL EXPERIENCE IN PROMOTING CROSS-BORDER COMMERCE

E-E-commerce has strongly contributed to Vietnam's economic development Therefore, the development of e-commerce systems, especially cross-border e-commerce is an important issue on which the Government has always focused In the context of Vietnam's global economic integration, this will be a great opportunity for building and developing a sustainable e-commerce system

Although Vietnam has not achieved great achievements like some other countries

in the world, this is an advantage of the latecomer that Vietnam can learn from their experiences and methods and avoid the mistakes In fact, each country has different economic and social characteristics, so the model and strategy for e-commerce development will also be different However, if we apply the appropriate ways, Vietnam can still inherit lessons from countries that have developed high-level e-commerce

systems Singapore and Malaysia represent the largest e-commerce markets in South East Asia They account for more than 50% of total online retail sales in the region despite being home to just 8% of the Southeast Asian population

1.3.1 Experience from Singapore

a) The current situation of Singapore

Despite its small geographical footprint and a population of just 5.6 million, Singapore is a major e-commerce market in South East Asia Singapore is one of the developed countries in e-commerce with a 2020 revenue of $6,029 million (Gogloble, 2020) The Singaporean B2C market is worth 4.9 billion USD (2020) and is expected to grow at a compound annual growth rate of 8.35% to 2021 Cross-border shopping makes

up a significant part of the overall e-commerce market, at 29% of total spend Singapore online businesses see a world of opportunity for cross-border sales

According to The Visa Global Merchant E-commerce Study (GME Study), commerce leaders globally view international expansion and finding new cross-border customers as critical to driving growth, particularly heading into the prime holiday shopping period While 87% of leaders surveyed believe expanding cross-border e-commerce is one of their company’s highest growth opportunities, 96% of Singapore business owners agree that having an international presence is key to their company’s success in the years ahead

e-Nowadays, 66% of businesses that sell online have international customers These sales account for nearly 31% of those businesses’ revenues In Singapore, almost 72%

of e-commerce businesses are already engaging in cross-border sales On average, these sales account for over 35% of revenue Unlike any other countries surveyed, 50% of those e-commerce businesses found cultural barriers to be an issue when expanding overseas

Table 1.2: Singapore’s Leading e-commerce players (2020)

Rank E-commerce

Platform

Monthly Web Visits Percentage

Increase Q1 2020 Q2 2020

Source: iPrice Group (2020)

b The strengths of Singapore’s cross-border e-commerce

Firstly, the growth of Singapore’s e-commerce market is supported by the

country’s excellent internet technology Fixed internet connections are almost triple the speed of the global average The country enjoys highly reliable secure information and communication technology infrastructure These factors have promoted high internet (87%) and mobile penetration (75%) levels among citizens

Secondly, the growth of the online shopping market in Singapore is encouraged

by a young, tech-savvy population with 80% of Singaporeans are aged under 54, and a growing middle class The country is one of the wealthiest nations in the world as the seventh-highest gross domestic product per capita globally Its consumers have high disposable income with which to apply to electronic retail

Thirdly, Singapore has the most mature e-commerce payment infrastructures in

Southeast Asia Singapore’s various payment systems are reliable and the overall credit card penetration is very high, which is attractive as a target market for cross-border e-commerce

Fourthly, Singapore has strong, cost-effective logistics for cross-border

e-commerce with small geography and an efficient port

Sixthly, Singapore stands out in the Asia region with strong clarity and

consistency of the customs and borders process Customs and tax procedures are straightforward and corruption is at a global record low

In addition, Singaporeans are more tech-savvy and have shown more willingness

to engage in cross-border e-commerce There are rooms for cross-border consumer protections to improve

1.3.2 Experience from Malaysia

Malaysia is a country located in Southeast Asia Deloitte (2020) reports that the contribution of e-commerce to Malaysia's GDP has grown steadily, reaching $28 billion

in 2018 In 2020, the Malaysian e-commerce market value reached $4.3 billion and is predicted to grow to $8.1 billion by 2024 In Malaysia, 40% of all e-commerce transactions are cross-border

Source: Globaldata.com (2020) Firstly, Malaysia has a developed logistics system To increase freight

volume and structural e-commerce growth, Malaysian logistics has evolved in recent years Large-scale e-commerce platforms such as Lazada and Shopee have set up their

warehouses across Malaysia to help provide platform-operated logistics distribution These leading platforms are snatching up as many merchants as possible, even offering free shipping and warehousing

Secondly, Malaysia focuses on controlling taxation Malaysia currently

imposes two taxes relevant to overseas companies wishing to sell their products in the country: import tax and sales & service tax (SST) Only import tax is charged on cross-border e-commerce products, and SST is not charged on these That is an advantage for businesses, and an opportunity to promote cross-border eCommerce in Malaysia

Thirdly, developed payment infrastructure In Malaysia, bank transfers and

digital wallets are the most preferred payment method Interestingly, credit cards are the most preferred payment method in Penang (28%), Perlis (40%), Selangor (25%), and

WP Kuala Lumpur (34%) Digital wallets, known as complete digital in Malaysia, are the fourth most-used payment option However, their usage is predicted to grow by 53%

by 2021, at which point it will take a 16% share of the Malaysian payments market

1.3.3 Lessons for Vietnam in promoting cross-border e-commerce

Currently, many countries recognize the benefits of e-commerce to the whole society, such as e-commerce can enhance the competitiveness of the economy, and at the same time bring the ability to improve the environment E-commerce will create the premise for early access to the digital economy or knowledge economy E-commerce stimulates the development of the information technology industry - one of the important industries in the modern economy However, for developing countries such as Vietnam,

if there are no proper strategies, it will reduce competitiveness and lag behind With a population of nearly 100 million people, Vietnam is considered one of the countries with

a fairly decent digital economic growth rate in the ASEAN region From the experiences

of the above countries, lessons for Vietnam in promoting cross-border e-commerce are

as follows: