Statement of originality I hereby declare that this study is my original work and the results of my ceaseless working days under pressure to address my curiosity and desire to better und
E-commerce, which began in the 1960s with electronic data interchange (EDI) primarily used by banks for electronic funds transfers (EFTs), has evolved into a crucial component of the global economy According to the 2009 Background Report on Strengthening Consumer Protection in the Internet Economy by the Organization for Economic Co-operation and Development (OECD), an average of 34% of citizens in OECD member countries engaged in online commercial transactions, highlighting the significant role of e-commerce in modern commerce.
The number of internet users is expected to rise significantly in the coming years, reaching approximately two billion by the end of 2010 This increase, driven by improvements in internet infrastructure, will facilitate easier electronic commerce (EC) transactions.
Since its emergence in the mid to late 1990s, electronic commerce (EC) has become increasingly significant in Vietnam's economy (Trần, C.N., 2005) According to the 2010 annual report by the Vietnamese Ministry of Industry and Trade (MOIT), 81 percent of surveyed enterprises have partially integrated EC into their operations The rapid growth of internet users in Vietnam further underscores the robust development of EC, which is evident in the evolving legal framework, supportive government policies, improved infrastructure, digital lifestyle trends, and overall economic conditions.
The Vietnamese Government has prioritized the legal framework for electronic commerce (EC) by issuing numerous legal acts to establish a robust legal foundation for EC activities Vietnam recognizes the internet as a vital component of its national information infrastructure, safeguarded by law, with strict prohibitions against violations (as stated in Decree No 55/2001/ND-CP on the Management, Supply, and Use of Internet Services) This commitment underscores the importance of a secure and regulated environment for the growth of electronic commerce in the country.
Organizations and individuals are entitled to select any methods that ensure their security and safety, provided these methods comply with the law, as stated in the Vietnamese National Assembly's Law on Electronic Transactions (2005) Additionally, other legal regulations support this right.
The legal framework for electronic commerce (EC) activities in Vietnam is established by key legislations, including the Information Technology Act (2006), the Decree on Digital Signature and Digital Signature Authentication Services (2006), and the Commercial Law (2005).
The Vietnamese Government is actively promoting e-commerce (EC) as a strategic tool for business cost reduction and adaptation to international trade practices This initiative is supported by various plans and programs, including the IT development plan and international cooperation efforts with organizations like WTO, APEC, ASEAN, ASEM, UNCTAD, UNCITRAL, and UNCEFACT The primary goal of these initiatives is to enhance the competitiveness of Vietnamese enterprises in the global economy, particularly following Vietnam's accession to the WTO, as outlined in the Prime Minister’s Decisions No 222/2005/QD-TTg and No 1073/QD-TTg on EC Development for the periods 2006-2010 and 2011-2015, respectively.
The Vietnamese Government has enhanced the infrastructure for e-commerce activities by ensuring nationwide access to telephone, internet, and Asymmetric Digital Subscriber Lines (ADSL) Key developments include the establishment of the Electronic Commerce Vietnamese Gate in 2004 and the Department of IT Application in 2005, as highlighted in the Vietnamese Ministry of Trade and Industry’s Report on E-COMMERCE from 2005.
In 2005, the Vietnamese government laid a strong foundation for e-commerce (EC) by developing application software for business activities and training human resources for EC applications These initiatives reflect the government's commitment to integrating EC into enterprises, with a specific goal of achieving 100 percent adoption of EC by businesses by 2015, as outlined in the Prime Minister’s Decision No 222/2005/QD-TTg and Decision No 1073/QD-TTg on the Master Plan for EC Development for the periods 2006-2010 and 2011 onward.
The digital revolution has significantly transformed lifestyles, primarily driven by IT advancements that cater to human needs, particularly in commerce By 2010, internet users surged to approximately 26 million, representing about 26% of the population Activities such as web surfing, emailing, and chatting have become daily routines for many, especially office workers This global trend has made these practices essential for businesses, offering low-cost communication tools Consequently, as Vietnamese companies engage in global trade, adapting to these digital demands becomes crucial for their success.
EC in business and take advantage from it
The current financial and economic crisis significantly impacts the development of e-commerce (EC) in Vietnam, where high inflation and declining exports pose major challenges To survive and thrive, Vietnamese enterprises must enhance product quality, delivery times, and business reputation while also cutting costs to maintain a competitive edge against both local and foreign competitors, particularly from China and ASEAN The widespread use of the internet enables EC applications to substantially reduce costs, especially in administrative and advertising expenses, potentially saving up to 80% This cost reduction allows businesses to offer lower-priced products and improve their market competitiveness, which is crucial for small and medium-sized enterprises (SMEs) with limited resources in a highly competitive environment.
The Business to Business (B2B) model is a vital component of electronic commerce (EC) that facilitates direct transactions between businesses online, allowing them to sell products or services to one another through e-marketplaces In 2007, B2B sales in the U.S reached approximately $6.8 trillion, representing 49.3% of the nation's Gross Domestic Product, highlighting its significant impact on commercial activities In Vietnam, the government aims for 70% of businesses, including 30% small and medium-sized enterprises (SMEs), to adopt the B2B model by 2015, as outlined in the Master Plan on EC Development.
Despite the significant role of B2B in the economy, its contribution to Vietnam's GDP was only 2.2 percent in 2007, falling short of government and business expectations regarding economic cooperation activities Many businesses, particularly SMEs, have yet to leverage the B2B model, which offers opportunities for increased turnover and profit at minimal costs To achieve the goals outlined in the economic cooperation development plans, especially in enhancing exports through B2B, substantial efforts are required from both the government and businesses The key challenge lies in determining the necessary actions for both parties to meet these targets.
The major research question of the study is “How may the effectiveness of B2B Model in the exportation Capacity of Vietnamese Small and Medium Enterprise be evaluated?”
Specifically, the study needs to answer the following sub-research questions:
1 How can B2B help SMEs enhance export capacity through its marketing tools?
2 How should SMEs prepare for B2B application in terms of organizational readiness, perceived ease of use and external pressure (customer demand)?
3 What are the benefits that SMEs may have through the application of B2B model?
This study aims to address the lack of comprehensive research on economic competitiveness (EC) relevant to Vietnam's economy It focuses on understanding the Vietnamese Government's master plans for EC development and seeks to improve the competitive and export capabilities of small and medium-sized enterprises (SMEs).
The following stakeholders may benefit from the study:
Vietnamese SMEs can leverage the B2B model outlined in this study to reduce costs and access export markets, presenting significant opportunities for business growth and market expansion.
This chapter outlines the research methods and techniques employed in the study, detailing the population, sample, and research locale It describes the instruments utilized for data collection, along with the procedures for gathering and processing the data Additionally, the chapter specifies the statistical treatments applied to the data.
METHODS AND TECHNIQUES OF THE STUDY
The research employed a blend of descriptive and exploratory methods The descriptive method focuses on detailing the characteristics of various subjects, including individuals, groups, organizations, and environments, by answering key questions such as who, what, when, where, and how (Zikmund et al.).
The explorative method enhances the understanding of concepts by clarifying ambiguous situations and uncovering potential business opportunities (Zikmund et al., 2010) This study employs two distinct methods to achieve these objectives.
This study aims to conduct a comprehensive analysis of the current e-commerce activities of SMEs, proposing a B2B model to improve their exporting capabilities To achieve this, various data collection methods were employed, including in-depth interviews, survey questionnaires, and secondary data analysis.
Data of the study comes from three sources, including in-dept interview, survey questionnaires, and secondary data study
The article highlights an in-depth interview conducted with top management of SMEs, aimed at exploring their activities and assessing the feasibility of a B2B model to enhance exports The interviews were carried out with CEOs and managers of the enterprises, providing valuable insights into the realities faced by these businesses.
The in-depth interviews provided detailed insights into SMEs, while the survey questionnaire targeted a larger sample to offer a broader perspective The survey results complemented and clarified the findings from the interviews, presenting a more objective view of the situation By integrating the survey data with the interview insights, the author was able to draw conclusions that closely reflect reality, enhancing the feasibility and practicality of the study.
Secondary data, including documentation and archival records available in libraries and online, played a crucial role in complementing the study This data encompassed textbooks, research studies, reports, and articles relevant to the research topic It effectively integrated with the primary sources of interviews and survey questionnaires to enhance the overall data collection for the study.
POPULATION AND SAMPLE OF THE STUDY
The samples were conducted from one hundred and ninety-eight (198) SMEs Those SMEs operated in handicraft industry (109), in textile industry
(68) and in trading & service (21) SMEs operating in handicraft included hand-made/fine-art pottery (39), decorative furniture (21), bamboo/rattan
(19), lacquer wares (14), lighting-lamp/lantern (9), and candle (7) Similarly, the SMEs in textile and garment included clothes (31), stuffed plush toys
The article highlights the diverse landscape of small and medium-sized enterprises (SMEs), detailing that there are 16 in bags, 12 in other products, and 9 in footwear In the trading and service sector, 11 SMEs focus on agricultural products, 7 on handicrafts, gifts, textiles, and garments, while 3 are involved in travel and brokerage services These SMEs operate under various enterprise types, including 13 private enterprises, 162 limited liability companies, and 23 shareholding companies, with 8 being state-owned.
(191) belonged to private sector All of these belonged to domestic investment area (none of them operates in foreign direct investment area)
In a study involving 198 SMEs, in-depth interviews were conducted with 21 participants, including 10 CEOs, 2 CEO assistants, and 9 managers, all from Ho Chi Minh City Among the managers, 7 were from the Marketing and Sales Department and 2 from Human Resources Additionally, 177 SMEs responded to survey questionnaires, comprising 14 CEOs, 43 CEO assistants, 6 managers, 58 secretaries, and 56 staff members from various departments The survey included 136 SMEs from Ho Chi Minh City and 41 from Hanoi, with a summary of the respondents provided in Tables 4a and 4b.
Respondents of In-dept Interview
Notes :P.E is short for Private Enterprise
LLC is for Limted Liability Company
Respondents Position Form of Enterprise Business Field
CEOs (5) Assistants to CEOs (1) Managers (5) (Sales & Marketing)
Pottery (2)/ Furniture (1)/ Candle (1), Art Lighting (1) Bamboo (1)
CEOs (3) Assistants (1) Managers (4) (2Sales & Marketing, 2HR)
Table 4a Respondents of In-dept Interview
Respondents of the Survey Questionnaire
Notes: P.E is short for Private Enterprise
LLC is for Limited Liability Company
Respondents Position Form of Business Business Field
CEOs (11) Assistants to CEOs (14) Manager (1) Secretaries (21)
Pottery (6)/ Furniture (3)/Lacquer ware (2) Furniture (6)/ Pottery (4)/ 4 Bamboo (4) Candle (1)
Pottery (12)/ Furniture (3)/ Lacquer ware (3)/ Candle (1), bamboo (1)/ lighting (1)
Pottery (14)/Bamboo (11)/ Furniture (8)/ Lacquer ware (8)/Lighting (7)/ Candle (3)
Stuffed toy (1)/ Bag (1) Clothes (9)/ Bag (5)/ Stuffed toy (3)/ Footwear (1) Footwear (2)/ Clothes (1)/ Bag (1)
Clothes (19)/ Stuffed toy (8)/ Foot- wear (2)/ Bag (2)
Stuffed toy (3)/ Foot- wear (1)/ Bag (1)
Table 4b Respondents of the Survey Questionnaire
The selected enterprises were situated in Hochiminh City and Hanoi, Vietnam's two largest administrative and commercial hubs, which boast well-developed IT infrastructure conducive to B2B model implementation For a detailed overview, refer to Appendix K Figure 5 illustrates the locations of Hochiminh City and Hanoi from which the samples were drawn.
Figure 5 Vietnam Map for research locale of the Study
The selection of Hochiminh City and Hanoi as representatives for Vietnamese SMEs was based on three key reasons: first, time and financial constraints limited the study's scope; second, these cities host the majority of enterprises, facilitating data collection; and finally, the availability of robust IT infrastructure, particularly high-speed internet, ensures that results from these cities can be generalized to other provinces.
The study utilized two primary instruments: in-depth interviews with top management of SMEs, including CEOs and managers, and a structured survey questionnaire completed by various representatives such as CEOs, assistants, managers, secretaries, and staff The content of both the interview questions and survey items was informed by the conceptual framework illustrated in Figure 4 (pp 46-50) and distributed to respondents in Ho Chi Minh City and Hanoi Notably, some open-ended questions from the interviews were incorporated into the questionnaire to gain deeper insights into the current status and future goals of SMEs regarding B2B export growth.
Focused Interview Questionnaire (See Appendix I)
The Focused Interview Questionnaire was utilized to engage with top management of SMEs, employing an explorative research method that included nineteen open-ended questions The questionnaire began with a definition of the B2B model to ensure respondents understood the interview's context It was structured into two sections: Part I focused on personal profiles, while Part II addressed the study area, which encompassed six key items: organizational benefits, organizational readiness, external pressure, perceived ease of use, marketing tools (including web presence, e-marketplaces, and e-marketing), and additional related issues These related issues featured four supplementary questions aimed at delving deeper into SMEs' experiences, achievements, solutions, and recommendations for enhancing B2B application effectiveness, particularly regarding its relationship with export The questions were meticulously crafted to guide respondents during the interview, allowing the interviewer to pose additional queries as needed to clarify focused questions and obtain accurate responses.
The study utilized a survey questionnaire, structured similarly to the interview questionnaire, consisting of two parts This tool featured thirty primarily closed-ended questions aimed at providing a comprehensive overview of e-commerce within SMEs' business activities Respondents were prompted to assess the suitability of various aspects for their enterprises Additionally, the final question sought to gather insights on contributions, expectations, and recommendations from SMEs to the Vietnamese Government, focusing on enhancing the legal framework and infrastructure for B2B/e-commerce development.
The survey questionnaire comprised four primary types of questions: five-scale (ranging from 5 to 1), level of importance (from 1 to 4), multiple-choice, and specific information inquiries from enterprises In the five-scale questions, a rating of 5 indicated a very necessary response.
This chapter provides an analysis of data collected from 198 participants through interviews and surveys, focusing on five key determinants outlined in the study's conceptual framework It discusses the results and interprets the findings derived from the data analysis, which is structured around the five components defined in the framework This analysis aims to assess the current status of B2B applications in selected SMEs, addressing the study's five hypotheses and offering insights into their validity.
Organizational benefits, as outlined in the Conceptual Framework, encompass profit, competitive capacity, and brand recognition This study highlights the significance of B2B in corporate activities, particularly in export, which is crucial for business development, market expansion, and sales growth These benefits are vital for enhancing exports through competitively priced manufacturing products or services and effective marketing strategies Ultimately, they serve as the primary factor influencing whether an SME should adopt B2B practices.
The importance of B2B to organizational benefits
The survey revealed that all SMEs highly valued the benefits of B2B, with a mean score of 4.83 from 177 respondents Interviews with CEOs and managers emphasized the necessity of IT in modern business, highlighting that tools like emails and websites are crucial for operations Respondents recognized practical advantages of B2B, including cost savings and convenience, and acknowledged its vital role in business development, even among those who had not yet adopted these technologies.
The importance of B2B to the core benefits of SMEs
In order to understand better the benefits brought by B2B to SMEs, the survey went deeper into details of the benefits, where it defined four core
Co st reduct io m T ime - Sa v ing B us ines s P ra ct ice Co mp et it io n ones, including time saving, cost reduction, competition strengthening, and business practice matching
The study found that SMEs identified cost reduction as the primary benefit of B2B transactions, with a mean score of 4.69 based on 177 responses (Table A2, Appendix A) Interviews revealed that SMEs were actively seeking to minimize expenses due to the ongoing economic crisis, leading to a heightened focus on cost calculations for both current operations and investment plans Consequently, cost reduction emerged as the most significant factor influencing SMEs' decisions regarding B2B engagement Figure 7 illustrates the importance of B2B in relation to the core benefits for SMEs.
Figure 7 The level of importance of B2B to the core benefits of SMEs
The second most significant benefit identified by SMEs was time saving, with a mean score of 4.24 (MA2a, NA2a = 177, Table A2, Appendix A) Interviewees indicated that time saving translates to cost reduction, highlighting its importance in the context of B2B usage While cost reduction ranked as the top benefit, time saving followed closely, as both survey and interview results aligned on this priority The gap between the first and second benefits was notable, yet the difference between the third (business practice, MA2d = 3.17) and fourth (competition strengthening, MA2c = 3.13) benefits was minimal Additionally, interviews revealed that competition strengthening is more influenced by an organization's financial capacity and core values than by B2B practices.
The third evaluation of B2B's impact on organizational benefits highlighted its essential role in facilitating exports for companies engaged in international trade Respondents with export activities rated the importance of B2B highly, with a mean score of 4.62, indicating its significant contribution In-depth interviews revealed that B2B effectively promotes export activities, allowing SMEs to market their products and capabilities through their websites These platforms enable customers to purchase products or services that meet their needs, serving as ideal venues for information exchange between buyers and sellers, thereby enhancing business opportunities Additionally, the widespread use of B2B tools such as email, online marketing, and professional software has become standard practice in the business world Overall, both interviews and survey results demonstrated that exporting businesses recognize B2B as a vital and effective means to boost their export opportunities.
The surveyed SMEs recognized the significance of B2B transactions, particularly the advantages they offer for enhancing business operations They identified B2B as a crucial element in boosting their export capabilities.
External pressure on B2B applications refers to the influence from the external environment that compels SMEs to adopt B2B practices This factor significantly impacts top management's decisions regarding B2B implementation and often serves as the primary motivator for businesses to transition to B2B models The study evaluates external pressure by examining the external determinants that affect SMEs' decisions to adopt B2B and assesses the importance of these determinants.
External determinants significantly influence the adoption of B2B models among SMEs, varying based on individual business contexts Key factors affecting this choice include competition, the demand for e-commerce from firms already utilizing it, governmental policies, and other relevant influences A survey revealed that 80% of SMEs cited competitive pressure as a primary factor, while 77% pointed to business practices In contrast, only 11% and 3% attributed their decisions to governmental policies and other determinants, respectively.
External determinants to B2B application Freq Valid % a Competition/ cost reduction b Common practice c Governmental polices d Other (the industry’s demand, support of internet providers, partners/ customers)
Note: The total validity can be more than
100% as a respondent can have more than one choice at the same time
Table 5 External determinants to B2B application
Other determinants, due to these enterprises, were the industry’s demand, support of internet providers (i.e promotion), of partners or customers (technical or financial supports) (see Table 5, Table B4, Appendix B)
Many SMEs adopt B2B models primarily due to competitive pressure and industry norms, reflecting the realities they face In contrast, governmental policies and other factors play a minimal role in influencing their decision to implement these models.
Level of importance of the determinants
The significance of external determinants reflects businesses' perceptions of their impact on B2B applications Recognizing the importance of each determinant is crucial for informed decision-making.
Figure 8 Frequency of external determinants
Competitive pressureCommon practiceGovermental policyOthers build a model applying B2B matching the purpose of improving the export capacity for Vietnamese SMEs
The analysis reveals that the primary factors influencing the outcomes are common practice, with a mean score of 4.55, and competitive pressure, scoring 4.51 (Table B5, Appendix B; Figure 9) In contrast, governmental policy emerged as a less significant determinant, with a mean score of 2.26 (Table B5, Appendix B; Figure 9).
9) and others, i.e the industry’s demand, support of internet providers/ partners/ customers (MB5c = 2.21, NB5a = 177, Table B5, Appendix B; Figure 9.) These facts can be better explained by the opinions of the firms in the interview, where the researcher went deep into details of each situation
Figure 9 Level of importance of external determinants to B2B application
Competitive pressureCommon practiceGovermental policyOthers
Common practices are essential for B2B application adoption, as firms must align with partners and customers using B2B tools like email and websites to avoid becoming outdated Competitive pressure also plays a significant role, with businesses recognizing the undeniable cost-cutting benefits of B2B, especially during crises, which enhances efficiency and convenience Governmental policies further influence B2B adoption, as incentives such as free online transactions and low-cost website development encourage businesses to engage in B2B practices However, while government mandates like online tax and customs declarations exist, they are not the primary drivers for B2B application, as many SMEs still rely on service agencies to meet these requirements Other factors, such as industry demand and support from internet providers, are less frequently cited as determinants in the decision to adopt B2B solutions.
The SMEs studied recognized the significant impact of external pressure, considering it a crucial factor for B2B application They identified competitive pressure and business practices as essential determinants in this context.
PERCEIVED EASE OF USE TO B2B APPLICATION
The research identified two key barriers hindering the export capacity of SMEs: their understanding and application of B2B practices (internal barrier) and the influence of the social environment (external barrier) While the social environment operates at a macro level and is beyond the control of businesses, SMEs can enhance their export capacity by effectively utilizing their internal resources to capitalize on B2B opportunities It is crucial for SMEs to learn how to implement B2B strategies effectively and to revise any ineffective practices Therefore, recommendations for improving export performance through B2B should focus on strategies that enable businesses to better engage with and leverage the B2B model.
Upgrading the whole operating system of the business toward comprehensive application of B2B to satisfy the international practice of e-commerce.