e-commerce development in agricultural trade promotion in vietnam

LIST OF ABBREVIATIONS ARPANET Advanced Research Projects Agency Network Agritrade Trade Promotion Center for Agriculture APEC Asia-Pacific Economic Cooperation B2B Business – to – Busine

TABLE OF CONTENTS

ACKNOWLEDGEMENTS i

ABSTRACT iii

TÓM TẮT iv

TABLE OF CONTENTS v

LIST OF ABBREVIATIONS vii

LIST OF TABLES, FIGURES, CHARTS, DRAWINGS viii

INTRODUCTION 1

1 The imperative of subject 1

2 Establish the main research subject 3

3 Research’s objectives 3

4 Research scope 3

5 Delimitation of the research’s contents 4

5.1 The basic elements of E-commerce model 4

5.2 Assign content to develop E-commerce model for Agritrade 5

6 Research methods 5

6.1 Data collection methods 5

6.2 Data analysis methods 7

CHAPTER 1: THEORETICAL FRAMEWORK 8

1.1 E-commerce 8

1.1.1 The concept of E-commerce 8

1.1.2 Characteristics of E-commerce 10

1.2 The formation of E-commerce 10

1.2.1 The reasons of E-commerce 10

1.2.2 The formation of E-commerce 11

1.3 The situation of E-commerce development in Vietnam 12

1.4 The operation forms and E-commerce transactions 14

1.4.1 The forms of E-commerce activities 14

1.4.2 Transaction forms of E-commerce 17

1.5 Benefits of E-commerce for businesses 22

1.5.1 E-commerce reduces costs 22

1.5.2 Impact on enterprise architecture 24

1.6 The E-commerce requirements 25

1.6.1 Technological Infrastructure 25

1.6.2 Human Infrastructure 26

1.6.3 Security and safety 26

1.6.4 Automatic Financial payment system 27

1.6.5 Consumer Protection 28

1.6.6 Economic and legal infrastructure 28

1.7 Definition and content of Trade promotion 29

1.7.1 Definition: 29

1.7.2 The purposes of trade promotion 30

1.7.3 Types of Trade Promotions 31

1.8 Trade Promotion in E-commerce 32

1.9 The difference of E-commerce applications in agricultural trade promotion 33

CHAPTER 2: BACKGROUND AND REAL SITUATION OF AGRICULTURAL PRODUCTS PROMOTION OF AGRITRADE 34

2.1 Overall assessment of domestic market for Agricultural product 34

2.2 Overall assessment of agricultural trade promotion activity of Agritrade 38

2.2.1 Overview of Trade Promotion Center for Agriculture (Agritrade) 38

2.2.2 Agritrade’s main missions: 40

2.2.3 Recent years’ Main Activities: 42

2.2.4 Overview of agricultural trade promotion activities of Agritrade 43

2.3 Assessing the impact of external environmental factors to E-commerce application at Agritrade 46

2.3.1 Impact of economic environment 46

2.3.2 Impact of political legal environment 50

2.3.3 Impact of socio-cultural environment 51

2.3.4 Infrastructure and Internet services for E-commerce 52

2.3.5 Competitors 55

2.3.6 Customers 57

2.3.7 Human resources for E-commerce 59

2.4 Assessing the impact of internal environmental factors to the E-Commerce applications in trade promotion activities of Agritrade 61

2.4.1 Impact of human resources 61

2.4.2 Impact of financial resources 62

2.4.3 Impact of technology infrastructure 63

2.5 Analysis the results of survey and discussions 63

2.5.1 The results of survey 63

2.5.2 Results of expert interviews 75

CHAPTER 3: CONCLUSIONS AND THE PROPOSAL SOLUTION OF E-COMMERCE DEVELOPMENT FOR AGRITRADE 77

3.1 The conclusions and findings through the research process 77

3.1.1 The achievements and limitations of Agritrade 77

3.1.2 The findings of the research process 79

3.2 Orientation and perspective of development of Agritrade in the future 80

3.2.1 Development orientation of Agritrade 80

3.2.2 Agritrade’s views on the E-commerce application 81

3.3 Proposal solutions of deploying E-commerce application in Agritrade 81

3.3.1 Group of Human Resource solutions 81

3.3.2 Solutions related to infrastructure and technology 82

3.3.3 Solutions related to business processes 85

3.3.4 Solutions related to electronic marketing promotion 87

3.3.5 The other solutions: 89

CONCLUSION 91

LIST OF REFERENCES 94

LIST OF ABBREVIATIONS

ARPANET Advanced Research Projects Agency Network

Agritrade Trade Promotion Center for Agriculture

APEC Asia-Pacific Economic Cooperation

B2B Business – to – Business

E – commerce Electronic Commerce

ECM Enterprise content management

EDI Electronic Data Interchange

GSO General Statistics Office Of Vietnam

MARD Ministry of Agriculture and Rural Development

MoIT Ministry of Industry and Trade

MRO Maintenance, repair and operation

UNCITRAL United Nations Commission on International Trade Law

VECITA Vietnam E-Commerce and Information Technology Agency

WTO World trade Organization

LIST OF TABLES, FIGURES, CHARTS, DRAWINGS

Tables

Table 0.1 The basic elements of E-commerce model for agricultural

Table 2.1 Vietnam Rice production and exporting (2000 – 2009) Page 34

Table 2.2 Domestic consumption of cashew nut (1995-2010) Page 35

Table 2.3 East Asia and the pacific: GDP growth projections Page 47

Table 2.4 The reason for not participating in online purchases of

Table 2.6 Summary of survey results (Part 1): Page 64

Table 2.7 Summary of survey results (Part 2) Page 66

Table 2.8 Evaluation of Agritrade’s employees about necessary

level of contents of E-commerce application Page 69 Table 2.9 Summary of survey results (Consumers) Page 70

Table 2.10 Summary of survey results (Suppliers) Page 72

Table 2.11

Evaluation of Agritrade’s customers (consumers and suppliers) about necessary level of E-commerce application

Page 73

Table 2.12

Evaluation of Agritrade’s customers (consumers and suppliers) about necessary level of contents of E-commerce application

Page 74

Charts

Chart 2.1 Organization structure of Agritrade Page 40

Figures

Figure 1.1 Models of E-commerce transactions Page 18

Figure 2.1 GDP quarterly growth from 2008 – 2010 Page 47

Figure 2.2 Monthly CPI development in 2010 Page 48

Figure 2.3 Evaluation of enterprises of obstacles to e-commerce

Figure 2.4 Number of computers in enterprises through recent years Page 53

Figure 2.5 Computer usage in enterprises in different localities Page 53

Figure 2.6 Means of Internet access of households in Hanoi in 2010 Page 54

Figure 2.7 Households with computers per 100 households Page 54

Figure 2.8 Methods of Internet access of enterprises in 2009 Page 55

Figure 2.9 Number of E-commerce training schools between 2008

Figure 2.10 The proportion of E-Commerce schools by level Page 60

Figure 2.11 Enterprises’ IT and e-commerce training methods for

Figure 2.12 Ability to achieve the target set for trade promotion

Figure 2.13 Evaluation of Agritrade’s employees on whether to apply

E-commerce in agricultural trade promotion Page 68

Figure 2.15 The most important factor when apply E-commerce Page 69

Figure 2.16 Evaluation of Agritrade’s consumers on whether to apply

E-commerce in agricultural trade promotion Page 71

Figure 2.17 Evaluation willing level of Agritrade’s consumers to

INTRODUCTION

1 The imperative of subject

Internet was born as a turning point in communications history of mankind and plays more important role in all activities of man Experienced two boom in 1986,

1991 to date, the Internet has brought humanity to overcome many limitations of space and time Also, dependent on preeminent and universal primacy of Internet, it has quickly applied in many fields, especially economic activities and trade Since then, the term Electric Commerce (E-commerce) was born And today, the E-commerce has become a global trend, the rapid development, the motivation to help the world economy forward

In developed countries, E-commerce transactions through other forms of B2B, B2C,

or C2C has become very popular, becoming the new consumption habits, the proportion of E-commerce transactions compared to traditional trading constantly increasing With agricultural and food products manufacturing and trading sectors, the application of E-commerce in the distribution of products to help customers access to product quickly, and gives the company huge revenue such as alibaba.com, japonshop.com

In Vietnam, the E-commerce is in the process of formation and has taken huge strides in recent years According to the E-commerce report 2009 of the Ministry of

Industry and Trade (MoIT): “Along with the recent rapid development of Internet

and e-commerce, forms of trading via the Internet gradually developed and became popular to a segment of consumers, especially office workers and students in big cities

The most popular form of trading via the Internet was the sale and purchase of goods and services on e-commerce websites So far, many enterprises have sold their goods and services via e-commerce websites, especially enterprises in sectors

of aviation, tourism, general supermarket ”1

With the situation as on the development, sale and purchase of goods and services online has become a real trend, and certainly there will be strong growth in the

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Viet Nam E-Commerce Report 2009, Page vi

coming period as electronic payments become more popular and are familiar with both individual consumers and businesses

Trade Promotion Center for Agriculture (Agritrade) is a department under the Ministry of Agriculture and Rural Development (MARD) Agritrade has the functions to act as the implementation of trade promotion activities of Vietnam agriculture and rural development They also manage “the Exhibition Fair and Commerce Transaction Area” at No 2 Hoang Quoc Viet Street, Cau Giay District, Hanoi Every year Agritrade organizes tens of domestic and abroad trade promotion events in the agricultural sector The typical events are the International Agricultural Trade Fair (Agroviet), workshop and training in the provinces, Trade Fair and market research at foreign markets

Besides trade promotion programs, Agritrade also developed an important promotion activity that is agricultural products displaying Start this activity, Agritrade deploy a permanent display area at “the Exhibition Fair and Commerce Transaction Area” with the main objectives are displaying, introducing and selling agricultural products and local specialties to markets of Hanoi and neighboring provinces Through this area, many agricultural products find a foothold in market and gradually built a stable brands such as Gao tam Dien Bien, Seng Cu rice, Da Dui rice, Son La mushrooms On the rise of this area, Agritrade orient to develop

it into a great agricultural showroom for agricultural products and local specialties Thereby, showroom will become a frequent destination for both seller and buyer to come, exchange product information, and deal with each other The deployment of both display area and organizing trade promotion events, Agritrade will perform well as connections between producers and consumers

However, the effective of the current display area and traditional trade promotion programs are not really high and it also faces some restrictions Therefore, it is necessary to develop new models to improve the effective of trade promotion to the Agricultural products in particular and Vietnam Agriculture in general According

to the general trend of the times, E-commerce application seems to be the good solution for Agritrade

Due to these factors, along with experience on commerce application, using commerce model is extremely necessary, feasible in the present time; contribution help to Agritrade to accomplish its functions and duties of promoting and marketing

E-of regional agricultural products; realize the strategic expansion E-of business toward e-commerce applications

2 Establish the main research subject

Through the learning process, survey and investigation, the authors found that the required objectivity and subjectivity are imposed Agritrade in the short term (1-3 years) and long term are:

- AGRITRADE will become a focal point for trade promotion activities in Vietnam Agriculture

- Approach E-commerce development trend and apply IT into operation on promoting agricultural products and local specialties

- Develop E-commerce model to provide a link between producers, traders and consumer of agricultural products

So I would propose the subject of my graduate thesis is “E-Commerce development

in agricultural trade promotion in Vietnam”

- The scope of research in space: this is graduated subject so the scope of the

research only for micro and limited to Agritrade Specifically, the scope of the research is to study the basic concepts related to a review topic, agribusiness situation and propose solutions to develop E-commerce model for agricultural trade promotion activities of Agritrade

- The scope of research on time: The time for studying the subject and collecting

survey data from January to March 2010 at Agritrade This data combined with secondary outside data in last three years

5 Delimitation of the research’s contents

5.1 The basic elements of E-commerce model

Table 0.1: The basic elements of E-commerce model for agricultural trade promotion

Value targets

Developing a useful channel for both providers and consumers, ensuring that the process of resource management

is done strictly, comprehensively and effectively

Revenue models Products trading are agricultural products and local specialties

provided by the providers, producers and other source

Organizational

structure

The company wanted to sustainable development needs a well organized system to ensure effective implementation of plans and business strategy

Management

Team

Management Team responsible for making management strategy of enterprises Good team governance can make decisions to change or restructure business models when needed, contribute to build customers confidence

5.2 Assign content to develop E-commerce model for Agritrade

In this research, to develop E-commerce model for Agritrade, I will develop research methods to conduct surveys on the actual situation of Agritrade’s activities Overall assessment of the impact factors inside and outside the organization It also combined with analysis of results compiled from surveys, interviews with staffs and customers of Agritrade and agricultural expert Since then, I will assess the application ability and plans to develop an E-commerce model for Agritrade

Based on survey results, analysis of primary data and secondary sources, I will develop E-commerce model based on market factors, human resources, finance, and infrastructure for deploying this model Moreover, I will also improve sales process, handle orders, and deliver the product and other support services

6 Research methods

In the process of collecting data for the study and implementation of the thesis, the author has used the method of data collection as follows:

6.1 Data collection methods

6.1.1 Method of investigation of primary data

 For customers of Agritrade: The need of the applying E-commerce model

on promoting agricultural products

+ How to proceed:

 For Agritrade’s staff: issue and collect directly at the Agritrade’s office

 For customers of Agritrade: I focus on providers (in Northwest provinces), producers and consumers Most of questionnaires issued and collected directly when they visit and display in Agritrade’s trade fairs The others sent by email (to the customers who are officers and students)

The survey note will be collected, updated to the database of the Microsoft excel for processing and analysis The aim to apply this method is gathering information most quickly, most economical and precise handling in order to best assess and make the most accurate results

+ Advantages and disadvantages of this method

 Advantages: Fast, convenient and efficient

 Disadvantages: customers have little time to study carefully the questionnaire and they may feedback with incorrect answers

+ Sample of survey: I issue 45 questionnaires to Agritrade’s staffs and 30 copies to the Agritrade’s customers

- expert questionnaire

+ Content of Interview: Comments on the agricultural products and foodstuffs market in the future, the company's business strategic related to agricultural products, local specialties and food The needed of a suitable E-commerce model applying to current trade promotion activities of Agritrade; the difficulties and advantages of deploying E-commerce model in agricultural promotion at Agritrade (content expert interviewed is attached in Appendix) + Method of Investigation: Organizing Interview at Agritrade’s office

+ Objects of interview: Director and head of Business Department

+ Advantages and disadvantages of this method:

 Advantages: Observed visual attitude and the way to answer the questions, then we will assess the accuracy of the information and get the subjective comments of Agritrade on the agriculture

 Disadvantages: Difficult to get an overview and objective assessment of the market, the business model of Agritrade

6.1.2 Methodology of Survey with secondary data

Through documents, reports and statistical relevance of reputable sources such as commerce report of Ministry of Industry and Trade, the relevant documents on the website of Agritrade

E-6.2 Data analysis methods

6.2.1 Quantitative Methods

The method of synthesis and analysis data is based on the average value After all survey forms have been collected, results will be synthesized and analyzed by Microsoft Excel on the average value and statistical models The statistics from the performance of the company are handled by two methods: detailed analytical illustrations and diagrams

6.2.2 Qualitative methods

Analyzing and evaluating information through interview questions The interview questions are built from the whole industry to the intensive companies Meta-analysis method in the form of induction assess various issues, collect and release common identify and characteristics

CHAPTER 1: THEORETICAL FRAMEWORK 1.1 E-commerce

1.1.1 The concept of E-commerce 1

Electric commerce (E-commerce) is a relatively new field In the development process it has many different names: “Online trade”, “Cyber trade”, “Electronic Business”, “paperless trade or commerce” etc Recently the name “E-commerce” has become familiar and became the general convention, which appears in the international legal documents Besides, another name is still used and understood with the same content

- The concept of e-commerce in the narrow sense

In narrow sense, E-commerce merely restricted in sale and purchase of goods and services through electronic facilities, especially Internet and other communication networks

According to the World Trade Organization (WTO), “E-commerce, a new area of

trade involves goods crossing borders electronically Broadly speaking, this is the production, advertising, sale and distribution of products via telecommunications networks The most obvious examples of products distributed electronically are books, music and videos transmitted down telephone lines or through the Internet.”2

According to the E-commerce Commission of the Asia - Pacific Economic

Cooperation (APEC), “E-commerce is business that conducted through the data

transferring and digital information technology.”

- Broadly defined concept of e-commerce

In broad sense, E-commerce is financial and commerce transactions by electronic means such as electronic data interchange, electronic funds transfer, sending or withdrawals by credit card and other activities

According to this view, there are two definitions generalize the most complete range

According to the definition in Model law of UNCITRAL, the scope of E-commerce

is wide and covering almost fields of economic activity, among them the sale and purchase of goods and services is only a small range in E-commerce Model Law

defines “The term “commercial” should be given a wide interpretation so as to

cover matters arising from all relationships of a commercial nature, whether contractual or not Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation

or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road”1

According to the definition of European Commission, “E-commerce refers to

conducting business via electronic means It is based on the processing and transmission of electronic data in the form of text, sound and images.” Therefore

the term “Commerce” in “E-commerce” is not only normal trade in goods and services, but also covering a wider range The application of E-commerce will change the activity forms of most economies

Nowadays people usually understand the concept of E-commerce that is all business approaches and management processes through electronic channels in which the Internet or at least the techniques and protocols used in Internet plays a fundamental role and IT is considered as a prerequisite One other important aspect, E-commerce

is not to change the media, a feature of conducting traditional business To do this E-commerce requires extensive integration of the business features

If the system link from the fields of applications have different features or links through the boundaries of the enterprise for this purpose, this is a traditional application areas of enterprise application integration Enterprise content management (ECM) is considered one of the basic technologies for e-business

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UNCITRAL Model Law on Electronic Commerce with Guide to Enactment 1996, Page 3

1.1.2 Characteristics of E-commerce

E-commerce and traditional commerce, including the steps:

1 Consumers and providers find each other, consumers want to find a reliable supplier, while suppliers are conducting promotional activities, marketing, consulting and customer support, create trust and entice consumers to own

2 Evaluation, negotiations and discussions;

3 Organization coordination and delivery of goods;

4 Payment;

5 Confirm the correctness of every step in the purchasing process

However, the E-commerce still contains its own characteristics compared with traditional trade It is the ability to create a “virtual store” on the Internet The virtual store open 24 hours a day, 7 days a week, 365 days a year, and no days off (Death of time) It is potentially everywhere and not bound by geographical distance (Death of Distance) In the virtual store, it no needs to conduct transactions through intermediaries (Death of Intermediary) It can create an online marketing channels (Online Marketing) and can do online survey E-commerce is particularly suitable for providing online some materials (especially goods) or services such as movies, music, electronic books, software, consulting The successful factor in the network economy does not belong to large companies, rich in economic potential, it depends on the ability of companies to change flexibly and quickly adapt to changes

in the economy whether virtual or otherwise companies must have high sensitivity

1.2 The formation of E-commerce

1.2.1 The reasons of E-commerce

E-commerce was born as an inevitable development in the harsh competitive environment To survive, Businesses must apply technological advances in effective way IT brings the magic of transformation itself and affects most sectors including the economy It changes the world The development of mature tools such as Internet, Email, and World Wide Web is the reason to release a new trading method: E-commerce

Traditional transaction that includes document is more expensive and takes a long time This method has greatly hindered with the international trade, especially when the trading volume is increasing Moreover, traditional transactions reveal many weaknesses Therefore, this is the best time to launch new trading methods with more advantages

1.2.2 The formation of E-commerce

In 1969, the US Department of Defense established the Advanced Research Projects Agency Network (ARPANET) ARPANET was the world's first operational packet switching network and the core network of a set that came to compose the global Internet Along this time, the automation in the financial services industry began to take shape and develop, such as processing of checks, followed by processing credit cards and Electronic Funds Transfer (EFT) that allows online payment and taken to the escrow account and direct debit Early 80's, the E-commerce activities become expansion between businesses with the form of electronic data interchange (EDI) and electronic mail (E-mail) EDI allows companies to send and receive online business papers such as the command order Late 80's, E-commerce has become an important part in business activities, although it still did not make through the public Internet Around the same time, E-commerce technology came out in the healthy development of the global Internet However, it was new to the user and the majority of procedures are not convenient and automatic

In 1992 marked the advent of the global network (World Wide Web) It makes the Internet easier to use, interface and graphics are also better compared with the technical skills needed in the past

E-commerce is developing rapidly on the global scale based on the industrial development of information technology (IT) IT industry is gradually occupied the leading position in the national economy of many countries Especially the organic combination of three components: industrial computers (networks, computers, electronics, software and other services), communications (landline telephone and satellite) and internal information (databases, audio-visual products, entertainment,

publishing and providing information ) This combination is creating a new nature and role of the IT industry

1.3 The situation of E-commerce development in Vietnam

Although not a measure of the level of E-commerce application, the number and quality of the website is also an important criterion to evaluate the development of E-commerce When the connection between the systems of strategic partners to exchange directly electronic data in Vietnam is still developing, the website is the most popular channel for enterprises to advertise products, promote services and conduct E-commerce transactions both B2B and B2C form

According to E-commerce report in 2005 of MoIT, among 504 surveyed enterprises, 46.2% of businesses already have website However, most of the surveyed enterprises located in cities or the key industrial zones of provinces where the infrastructure of IT and communications are relatively well In 2008, with a survey of 1,600 companies across the country, the result showed that most businesses have implemented E-commerce applications in different levels Investment in E-commerce has been focused and it brings back effective to businesses Percentage of enterprises having website reached 45%, increases 7% over 2007 Rate of website that is updated regularly and has online ordering functions are increasing rapidly In 2010, almost 100% of businesses surveyed were implementing E-commerce applications in many sizes and different levels According to survey results, 100% of surveyed businesses were equipped with computers and each enterprise has 25.8 computers on average There are 98% of businesses have Internet connections in many different forms, in which 89% are connected by broadband (ADSL) and leased line Businesses have also focused on exploiting Email, the basic applications of E-commerce There are more than 81%

of enterprises use email for business purposes, in which, the rate of using of large enterprises is 96%, small and medium enterprises is 80%

After four years of implementing the overall Plan for E-commerce development from 2006 to 2010, E-commerce is not only located on two major cities, Hanoi and

Ho Chi Minh City, it has grown at most provinces of the country In the survey in

2009 of MoIT, there are 53% of the total surveyed enterprises located at other locations outside of Ho Chi Minh City and Hanoi The results show that, 100% Local businesses were equipped with computers Each enterprise, on average, has 21.5 computers (10.3 employees have one computer) Most local businesses are connected to the Internet, mainly using ADSL; only about 2% are connected to Internet by dial up line.

Based on the report, in recent years, with the strong development of Internet and commerce, online sales has gradually developed and become more familiar with officers, students and housewives in large urban areas Nowadays, the most popular online sales form is trading goods and services through E-commerce website Until late in 2009, the purchase through e-commerce website has become quite popular for some kinds of goods and services such as airline tickets, electronics, cell phones, computers, books, tour travel, hotel rooms, perfume, flowers, etc… Payment methods and delivery is also done very flexible by businesses to meet most requirements of buyers The most popular payment methods applied by sellers are online payment, bank transfer and pay by cash Besides the specialized E-commerce website, in recent years, there are many multiple social networks has appeared with thousands of members With a large number of members, the social networking is becoming real market for businesses Many businesses and individuals have the appropriate form of investment to capture this potential market segments such as setting topic and hiring permanent position in website to sale or advertising services The sellers exchange directly information and dealing with customers on the topic and the sale goods and services through flexible and multiple modes and acceptance by consumer With the development as above, the online trading of goods and services has become a real trend, and certainly it will be strong growth in the coming years when electronic payments become more popular and familiarity with consumer

E-According to survey of E-commerce website owners, 87.6% of businesses aim to the other businesses and organizations, while 65.7% of businesses focused on

consumer Thus, the method of B2B transactions will be the first choice for companies to deploy E-commerce applications in the future

One of the factors that help evaluate the quality and professional of a website is rate

of information updated In other words, it is the effort and time investment of the businesses to maintain their website More than half of businesses surveyed said that they only update the website once a month or less Less than 30% of businesses review daily the website Because there are only about 30% of these websites having E-commerce function Therefore, the statistics show that Vietnam businesses

do not proper recognized the role of the website as a channel of communication and permanent interaction with customers Thus, they do not invest appropriately the time and resources to build, maintain and exploit efficiently their website

Further analysis of the website management model of businesses showed that 56.2% of the businesses managing their website and 43.8% using the service of other providers This is one of the reasons why the information and communication features of the website are poor

About investment, the survey showed that the density investment of E-commerce application is fairly low in total annual operating expenses Over 80% of businesses said they invested maximum 5% the operational costs for deploying E-commerce, including purchase of E-commerce software, website maintenance and human resource for these activities Only about 14% of businesses invest 5-15% of total operating expenses and a very small percentage (3.6%) of total businesses surveyed invest more than 15% for E-commerce application

1.4 The operation forms and E-commerce transactions

1.4.1 The forms of E-commerce activities

a E-mail

Like ordinary correspondence, partners (consumers, businesses, government agencies) use email to send information to each other "online" through the network, called E-mail (Electronic mail) E-mail has faster transfer speed and it can be sent simultaneously a same content to multiple receivers at anytime, anywhere in the

world Moreover, the cost of E-mail is much lower than mailing by mail and telephone

b Electronic payment

Electronic payment is payment via electronic messages instead of cash handing With the development of E-commerce, electronic payment has expanded into new areas should be addressed:

 Financial Electronic Data Interchange (FEDI) specializes in serving the electronic payments between companies trading electronically with each other

 Internet cash is money to buy from a place of issuance (bank or credit institution), then freely convertible into other currencies through Internet Internet cash is widely use within a country and between countries, and all done with digitalizing technology, so internet cash is also called “digital cash” The buyers purchase internet cash by local currency then they use the Internet to transfer to the sellers Payment by internet cash is on the rise quickly, because a series of advantages:

o Can be used for payment of small value items, even paid subscription (due to transaction costs and purchase money is very low);

o Do not require a regulation to be agreed upon in advance, can take between two people or any two companies, the payment is unknown;

o Cash is guaranteed to receive real money, avoid the risk of counterfeit money

c Electronic purse

Electronic purse, known as electronic wallets, is a place for internet cash, mainly the Internet smart card The money is paid to anyone who read that card and the techniques applied to this purse similar to Internet cash

d Smart card

It looks like a credit card, but in the back of the card, instead of the magnetic strip, it contains an electronic chip with a small memory for storing digital money, money

that is paid only when used and the message (e.g confirmation of payment of invoices) be authenticated to be true

e Digital banking and digital securities trading

Electronic payment system of banks is a great system, which includes many systems: (1) Payments between banks and customers via telephone and Internet transactions, electronic funds transfer, credit cards… (2) Payments between banks and settlement agents (restaurants, supermarkets ); (3) a payment within the banking system; (4) payment between two banking systems

sub-f Electronic Data Interchange

Electronic Data Interchange (EDI) is the transfer of information from this computer

to other computers, among other companies or organizations have agreed to trade automatically with each other without human intervention (called structured data, because the parties of transaction have prescribed format of the information structure before) This is the form most commonly used According to UNCITRAL,

“EDI means the electronic transfer from computer to computer of information using

an agreed standard to structure the information” 1 EDI is widely used on the global scale, mainly for the purchase and distribution of goods (sending orders, the confirmation, shipping documents, invoices .) It is also used for other purposes, such as payment for medical examination and exchange of test results ate EDI mainly done through the external network (extranet) and often referred to

“commercial networks” (net commerce) EDI came out into society before Internet

At this time they use “Value Added Network” (VAN) to link EDI partners together The core of VAN is an electronic system that allows electronic computers communicated with each other, and act as a means of storing and searching When connected to the VAN, a business can communicate with computers located in

many cities around the world

g Digital Delivery of Content

Content data is the goods that people need its content (in other words, the content is

a commodity) not themselves carrying content such as news, books newspapers,

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UNCITRAL Model Law on Electronic Commerce with Guide to Enactment 1996, Page 4

music, movies, radio programs, television and software programs The advisory opinion, plane tickets, movie tickets, theater, the insurance policy now included

in the list of content data

Previously, Content data assigned in physical form by introducing disk, tape, printed books, packaging and handling to users or to distribution points (such as shops and stalls newspapers, etc.) The buyer will come to this point and purchase, receive contents directly Today, the content data is digitized and transmitted by the network (digitalizing delivery) So now all kinds of economic and business information on the Internet are very rich, and an important task of the communication today is Web exploitation and comprehensive analysis of information received

h Retail of tangible goods

Take advantage of multimedia of Web and Java, the sellers build online the “virtual store” to make the sale Users of Internet/Web search Website of the store; see the goods displayed on the screen; send the confirmation message to buy and pay by electronic payment Originally, purchasing is in such a primitive form, the buyers choose goods then order through the form that is placed on the Website

1.4.2 Transaction forms of E-commerce

The E-commerce transaction takes place between three main groups involved: business, government and customers These transactions took place by using active forms of E-commerce and are conducted at many different levels:

 Consumer to Business – C2B

Figure 1.1: Models of E-commerce transactions

In these types of transactions mentioned above, these are three types will be common applied in Vietnam

a Business to Business transaction (B2B)

“B2B describes commerce transactions between businesses, such as between a

manufacturer and a wholesaler or between a wholesaler and a retailer”1

Basically, electronic transactions between businesses is not new, they have existed for many decades Businesses sent and received orders, invoices and notice of receipt by the EDI from the late 1970s But at the time, only large enterprises participated because the cost of data transfer and training are very expensive

Currently E-commerce Business to Business development with rapid growth, because it brings many benefits to businesses, for example, businesses can shorten production cycle by combining with other businesses, each specializing in a field, or

1

Business-to-business: www.wikipedia.org

business can save time and cost to find and purchase materials for their production process by the business of buying raw materials providing the online sales network

About payment, in a form of B2B, payment is made on the basis of the clearing at the end of the period and it can implement following the traditional methods but still does not reduce its significance Meanwhile, in the B2C model, payment will

be attended specially, because the buyers will pay immediately for the goods that they order in the website This is radically different between B2B and B2C models There are several B2B models for different business types, in which the most typical models as following:

 Sales model through agents system

 Purchase model through a set of suppliers

 Mix model (Extended site)

 Auction modes

 Tender models

b Business to Consumer transaction (B2C)

B2C is transaction between businesses and consumers in which consumer purchases goods and services through the Website

Although the B2B method accounts for a large proportion of business transaction, but today there are many prospects for B2C method, because many families want to save shopping time and just sitting at home by clicking on the screen then they can ask the seller delivered to their door or consumers can use the service of provider,

typically, the fun activities and entertainment services such as music, reading, reading newspapers, watching movies etc

Nowadays, the goods that exchanged on the Internet are not only tangible goods but also intangible goods The traditional trading transaction lost their advantage over electronic transactions

+ Intangible Goods:

Most of the electronic transactions of intangible goods are brought directly to personal computers of consumer through network The merchandise consists of four areas: entertainment, travel, magazines and newspapers, financial services and email

+ Tangible Goods:

The goods that sold mainly by means of electronic are books, clothing, food and beverage It is expanding the online transaction of goods including household items

We can draw some comments as follow:

 The key factor to the success of a B2C E-commerce website is its ability to attract and maintain the interest of consumers

 The B2C E-commerce model is more suited to the traders and service providers

 The success of companies using B2C model is based on the advantages of buying products that they offer to customers This process is slightly similar

to traditional customer service Companies like Amazon.com, ebay.com, etc

have attracted a large number of online customers because they satisfy perfectly the online customer’s needs

b Consumer to Consumer (C2C)

Different from B2C and B2B, these models are based on business; C2C trading model takes place between individual consumers In this model, the sellers upload their products’ information into the internet; the buyer will search and look up information, negotiate with the sellers and order online

C2C model depends very much on the level of E-commerce It requires each member of transactions to have knowledge and clear understanding of E-commerce

At present, the numbers of website as well as information posted on these sites grow fairly fast These website provide mostly information about goods and services for sale, buying, along with some facilities such as research tool, consumer advice, etc There are some main features of this model:

This model includes transactions between customers Here, customers make purchases directly with the other customers Bazee.com and Ebay.com are typical cases, in which sellers can advertise and sell their products to other buyers However, to perform these transactions, the sellers and buyers must register with service providers on E-commerce website that they want to buy and sell Moreover, sellers have charged a fixed fee for the service provider (the E-commerce website); buyer can pay for the product without paying any extra fee

With the cases of ebay.com, Chodientu.vn, Half.com, in this model, objects are mainly businesses and customers The characteristics of this model are similar to the

B2C model, but the client (individual) is the seller, and businesses are buyers Specifically, the business (buyer) in this model will look up information of product that posted by seller and place an order, the customer (seller) receive and accept the orders and ship the product

1.5 Benefits of E-commerce for businesses

1.5.1 E-commerce reduces costs

E-commerce affects to most major types of business costs in the production process and conducting commercial transactions, including:

- Cost of sales:

The greatest impact on the cost of applying E-commerce is allowing businesses that can replace a range of grocery stores by the virtual in the website Because the website operates 24 hours a day, 7 days a week with the global market, so businesses can serve a larger set of customers Compared with the management of multiple stores, the management of a virtual store allows companies to cut more costs in the management process, especially the inventory cost Moreover, customers can access to the virtual store 24 hour per day This convenience is a preeminent characteristic of virtual business operations

With the provision of products or services’ information online, customers can develop their skills and knowledge to assess the prices of goods as well as characteristics of the implementation process In the future, the E-commerce environment would allow customers regular access to the website; understand more and more product information and pricing attributes Since then the communication between clients and professional sales or support staff will be made at higher levels Cost savings through applying direct payment in Website is significant amount for E-commerce enterprise For example, the bank service fee for payment by paper checks between banks and the seller is about $ 1.2 for a payment transaction, but the cost of electronic payments process via the Internet can be reduced to about $ 0.01

or lower

Clearly, E-commerce is changing fundamentally the sales process of the enterprise

It forced businesses operating in the market to reconsider how to communicate with

customers Even new businesses in the market also needs research to adopt commerce, exploiting the advantages of E-commerce to approach new customers

E Expenses related to procurement of the enterprise

The second sector of cost that E-commerce affected is the cost of procurement Procurement of businesses is including the purchase of products related to the maintenance, repair and operation (MRO) It is no mention to costs of buying final products and raw materials

In traditional commerce, when a business needs MRO supplied, the purchasing staff will fill in and submit a requirement form After that, staff will research the different Catalogues to find suitable products at reasonable prices This process includes several complicated stages, so the administrative costs for the purchase of indirect inputs often exceed their value According to The Organization for Economic Co-operation and Development (OECD) of the United Nations, on average a company with revenues greater than $ 500 million, the cost for each MRO products order will be from 75 USD-150 USD So the goal of applying E-commerce

in the procurement is directly connected buyers and suppliers And the entire purchase process is performed on the Website The connection of electronic catalogues will helps businesses quickly find products they need and check the accuracy of the product’s information, thereby reducing costs of inputs for enterprises

Previously, in large companies, the supply of MRO is done through the application

of EDI over particular proprietary value-added network (VAN) Now, the cost of EDI on the Website is only about 1/10 of the cost that performed on the VAN So many EDI users, the large organizations, are now moving MRO procurement on VAN to use the Web

- Expenses related to logistics

E-commerce has changed the logistics activities of business such as packing, delivery and turns it into information- business The impact of E-commerce to the cost of logistics enterprises is great significance, especially for logistic companies such as Federal Express (FedEx) or DHL

FedEx is a good example It began receiving orders online, shipping parcel packages and tracking them through their own networks since 1983 It took nearly

12 years to make the number of clients reached to 50,000 But after only three years (1995-1998), after applying FedEx similar services but through the Web, the numbers of its customers were up to 1 million Currently, based on the company's estimate, more than 70% of 3 million packages and parcels each day came from Internet

Due to Internet applications, enterprise has ability to respond quickly orders that are highly complex as well as the ability to track and monitor the orders So now, most

of logistic enterprises such as DHL, FedEx, and United Parcel Service (UPS) implement their logistics services: transport and distribution (packing, loading and unloading) of the package and parcel supporting services on the Website

Currently, businesses no longer have to worry about keeping track of their packages whether to move it anywhere in the world With the benefits the Web offers, monitoring shipping and inspection of goods delivery will become very simple, facilitating the payment process is done faster In addition, it also helps businesses get the flexibility in making decisions about production plans, while reducing unnecessary costs during transportation and unloading of cargo

In summary, by changing the structure, cutting costs of sales, cost of procurement and cost of logistics, E-commerce are making new success factors

1.5.2 Impact on enterprise architecture

IT and communications to allow businesses can trade and cooperate or compete with each other at high speed, lower cost and with amenities never before With E-commerce, began to appear business groups linked together by the type of network link, creating division and rules combined production and completely new business, more efficient than any real type of unstructured enterprise networking The mechanism of the “virtual networking” between enterprises allows businesses to share real business risks through new mechanisms of cooperation in all activities on the basis of comprehensive reform

Businesses applied early E-commerce is often have good conditions to make new business models But when the environment of E-commerce transactions taken from among large enterprises, create new business models is not simple anymore Enterprises who redefine their strategic based on technologies often face greater risks if the businesses leaders themselves do not specific identify the rationality of conversion strategic An interesting example that in 1996 IBM itself has implemented two important projects: informat-providing electronic content on the network and World Avenue- an E-supermarket But IBM had early realized that they lack editing capabilities, marketing and retailing capabilities So even in

1996, two projects are canceled

To become an enterprise that working 24h per day, 7 days a week, it is depending

on qualifications and adaptability of human resources and innovative capabilities Enterprises need to learn to be able to keep up with rapidly changing and complex

of the markets and technologies In E-commerce, businesses should be acquired, processed, using a wide variety of information, so they need to innovate constantly

to understand the basic knowledge and information about the enterprise itself, about customers, suppliers and markets

1.6 The E-commerce requirements

This infrastructure includes standards of the enterprise and whole country, linking these standards with the international standards, engineering and devices And not only for individual businesses, but it also be a national system, such as a module of the area and global information technology system (Internet-based broad sense, meaning that includes the distribution network, and telecommunications systems

worldwide.) And it has to be an individual trading system (up to the individual consumer)

Technological infrastructure not only means that the existence (availability), but also implies more economic use (affordability); means that the cost of equipment and means of IT (telephone, computer, modem, etc.) and cost communications services (telephone, Internet connection fees and network access) cheap enough to

be accessed by users This is especially significant for developing countries, in which the living standards are generally low

According to the growth of E-commerce, the current trend is adding up both security technologies and secure technology into infrastructure of E-commerce Security and safety are not only significant for the economic organization that also means national security

as well as be able to design software to meet the operational needs of a digital economy, avoid relying solely on the others

Moreover, if using Internet/Web, one more natural requirements of online business

is that all participants must be good at English - language used in traditional trade and E-commerce over the Internet This is a primarily “problem” of developed countries This requirement of E-commerce will lead to fundamental changes in education and training systems

1.6.3 Security and safety

Commercial transactions by electronic is setting up very high demands on security and safety, especially when it operates on the Internet/Web

Until now many people still do not dare to do business over the Web In the field of pure sales, the buyers are concerned the information in their credit card being

revealed, and the bad guys who have this information will withdraw their money The seller is concerned that the buyer does not pay for such contract (signed electronic style) via the Web In other fields, the most worrying thing is the safety and data security They have good ground for fear because the number of attacks on the Internet is increasing, even in the strictly protected network The hacker uses many different tricks: counterfeit relation, password cracking (especially weak passwords), virus and programs “from the inside out” such as fake Internet address (IP Spoofing), Denial of Service (DOS)

The modern encryption techniques (cryptography), including technical “encoding public key/secret”, with a minimum key length to 1024, even up to 2048 bits, plus the technology SSL (Secure Sockets Layer), SET (Secure Electronic Transaction) is helping to solve this problem In which, “electronic signature” or “digital signature”

is a signature that represented by the electrical bit and validated through decoding But the encryption itself can also be detected by sophisticated decoding techniques Therefore a national strategy on coded together with the safety information program

by agencies, enterprises and individuals is becoming a huge problem

1.6.4 Automatic Financial payment system

E-commerce can only be done when there actually exists a development financial payment system It allows automatic payments (smart cards that have special importance for retail business) Without this system, the E-commerce application is only exchange the information and transaction still ends with direct payment or the traditional means of payment Then the effects of E-commerce are lower and it may not enough to offset the costs of technology equipment spent

The finance payment system associated with the coding of entire goods, or product numbering is not only a national matter, it also global mater based on international standards and EAN International and Uniform Code Council institutions, expressed

in bar code Therefore, all the products and services are encrypted by using a 13 digit number, and all companies have their address with a code number from 100 to

100 000 digits The integration and establishing the system of product and

companies code (commercial coding) for an economy (especially the economies of developing countries) is not simple

1.6.5 Consumer Protection

Recognized based on trade theory and information theory from the past to the present, the underlying cause of a market collapsing is asymmetric information That is the different between what the seller knows with what the buyer said In that market, sellers have no way to convince buyers for the quality of their products The buyers only accept an average price paid for that product As a result, they only buy the low quality products (because high-quality products seller known.)

In E-commerce, information of goods are digital information, buyers does not have condition to taste or trial before purchasing goods It not mention to the possibility

of mistake the database, be deceived by the information and the illegal organization presence on the network Therefore, E-commerce needs an intermediate quality (quality guarantor) that operate efficiently and less expensive Because the actual risks increase sharply and they impact to the interests of consumers Quality assurance mechanisms have special significance for the developing countries, where until now people have practices in direct contact with the goods for inspection (see, touch, taste, smell ) to test (wear test, test team, to try ) before buying

1.6.6 Economic and legal infrastructure

First, each government must decide whether the information society and Internet are

a threat or an opportunity That decision is not easy, even a modern country such as France, until 1997 to 1998, they just have final decision and declared that “this is a chance” From the strategically asserted, France started to set up the economic environment, legal and social (including cultural, educational) for the digitized economy in general and for E-commerce in particular (for example, they decided to apply administrative services network, income tax services and other services such

as mail, weather forecasts, train cars )

About legal issues:

+ Recognize the legality of E-commerce transactions

+ Recognize the legality of electronic signatures- that the signature put on the form

of a data message and digital signature, and have the legal institution, the appropriate agencies for legal authentication/certification electronic signature and digital signature

+ Legal Protection of E-commerce contracts

+ Legal Protection of electronic payment (including the legislation of the agency issuing the payment card)

+ Legal Regulations for data that originate from state (government agencies and the Central Government), local government, state enterprises

+ Legal protection for intellectual property rights (including copyright) relating to all forms of electronic transactions

+ Protection of privacy (to prevent the secrets were posted on an illegal, not just names, the face which also includes other secrets relating to health Religion, political opinion adjustable, Gender, education )

+ Protect against legal information network, with crime prevention and intrusion of illegal purposes such as collecting confidential information, change information on the Web, enter data, copy software, transmitted virus … Each country has very specific rules about this crime, the issue will be included in the framework of criminal law

All the above can only be done on the basis of each country must establish a system

of “source code” for all digital information, then the State will have to shape a common strategy for forming and developing a digital economy Next, the policies, laws and specific regulations should be reflected in the corresponding adjustment of the entire system of civil law

1.7 Definition and content of Trade promotion

1.7.1 Definition:

Base on the Commercial Law 2005 of Vietnam, Trade Promotion means activities

of promoting and seeking opportunities for the purchase or sale of goods and

provision of services, including sale promotion, commercial advertisement, display and exhibition of goods and services, and trade fairs and exhibitions.1

Trade Promotion refers to marketing activities that are executed in retail between these two partners Trade Promotion is a marketing technique aimed at increasing demand for products in retail stores based on special pricing, display fixtures, demonstrations, value-added bonuses, no-obligation gifts, and more.2

1.7.2 The purposes of trade promotion

The purposes of trade promotion are supporting businesses to sell out their products when they face to the competition of others providers on the market

Trade promotion has a tremendous effect in the operation of the business and it is considered as an integral part of production There are many businesses and countries have set the cost for trade promotion activities a large proportion of total costs included in selling price (from 10-25%)

Trade promotion activities particularly developed in the capitalist countries, where competition is regular occurrence and very severe on the market

For that characteristic, the main purposes of using trade promotion as following:

* Promote the products consumption:

Promotion policies have a large role in marketing activities of business With these policies, businesses can impulse product offering and sales, increase revenues, and improve business efficiency

Promotion and business support activities will help trade process of the enterprises become more convenient and effective rely on the higher sales volume, and help enterprises penetrate new markets and increase market share, attract more potential customers Thence, the enterprises will grow steadily and overcome failures and obstacles on the market

* Create competitive advantage for businesses

Trade promotion activities not only attract attention and interest of customers, but also enhance the prestige and reputation of the business In the long run, trade

http://www.allbusiness.com/glossaries/trade-promotion/4944729-1.html >

promotion activities will create a good image for business and its products, and trust from customers Through trade promotion activities and the prestige of the business and products, they will find more potential customers That will help businesses get more competitive advantages compared to other businesses

* Communicate information about business and products to consumers

The purpose of the promotion policy is to communicate information about products and businesses to consumers Potential customers not only receive information but they should be aware of the information Information must be useful and it also promote consumer responding information in a positive way On the other hand, if there is no promotion policy, the business cannot get feedback from consumers for quality and design of products, before and after sales services, prices, distribution network…

1.7.3 Types of Trade Promotions

1.7.3.1 Promotion

Promotions are trade promotion activities of traders to promote the sale of goods or provision of services by giving customers with certain benefits The purpose of promotion is consumer stimulus; promote people to buy and buy more goods and services

1.7.3.2 Commercial advertising

Commercial advertising is the promotion activities of traders to introduce clients to their business goods and services Products of commercial advertising is including image, actions, sounds, voices, words, symbols, colors, lights that containing commercial advertising content

Means of commercial advertising is including: the mass media, the means of communication, the types of publications, all kinds of boards, signs, banners, panels, posters…

1.7.3.3 Displaying and introducing goods and services

Displaying and introducing goods and services is the trade promotion activity of traders that use goods, services and documentation to introduce customers those goods and services

The forms of displaying and introducing goods and services include: building the showroom, displaying and introducing at the trade center or in sports, culture and art events, organizing conferences and seminars, and introducing goods and services

on the Internet

1.7.3.4 Fairs and exhibitions

Fairs and trade shows are trade promotion activities done in a specific time and at a certain place In the fair and trade show, traders will display and introduce their goods and services aimed at promoting, search opportunities of signing goods or services contracts

1.8 Trade Promotion in E-commerce

Trade promotion in E-commerce is the method of using electronic means to introduce, offer and provide information about the product or service of producers

to consumers and convince them to choose it Through the common tools of commerce such as Email, Website etc, the businesses conduct introducing and advertising their product as well as prestige, reputation of the business, especially building business’s image, aim to people regularly access the Internet and using Email

E-Trade promotion in E-commerce is actually the way businesses use the Internet features to deliver the product or service to market

The rule of trade promotion in E-commerce as well as promotion in the traditional business environment is the order: Product - Price - Promotion – Place

However, promotion in E-commerce is facing to the difficulty in the technology infrastructure of the target market (the number of Internet users, usage levels, network access speed .) If the infrastructure is poor, the consumers do not have many opportunities to reach the Internet, finding information on the Internet, online shopping, auction online Therefore, the trade promotion activities in E-commerce can hardly affect consumers in that market

1.9 The difference of E-commerce applications in agricultural trade promotion

The trade promotion for agricultural products is very important Recently, recognizing its important role, the government has adopted policies to increase support for trade promotion activities at home and abroad These activities have immediate help for Vietnam agricultural products are exported to more potential markets, new and important Besides it also helps the agricultural products of local regions exploit and gradually dominate the domestic market

Most of our agricultural products have good quality but low value; added value in every product is lower than other industrial products In addition, agricultural products associated with the majority of small and medium enterprises, they are scattered at the local and tied to the interests of large producers are farmers Therefore, trade promotion activities not only contribute effectively to find new market for agricultural products, but also contribute to ensuring social security and rural development

Although aware of the role of trade promotion for agricultural products, but due

to funding for these activities is higher, the agricultural businesses are not actively involved and lack of supporting resources Thus, it requires us to search the new and reasonable method for agricultural trade promotion The application of e-commerce is a right direction to ensure effective and consistent implementation costs However, agricultural products are low-value products; the profit on each product is small, so the businesses are not eager to develop the complete e-commerce network for agriculture sector Therefore, it requires the Government agencies needs to be forefront in creating a suitable and effective channel for broadcast and trading agricultural products; a playing field for agricultural producers and trading enterprises to meet, exchange and trade directly

CHAPTER 2: BACKGROUND AND REAL SITUATION OF

AGRICULTURAL PRODUCTS PROMOTION OF AGRITRADE 2.1 Overall assessment of domestic market for Agricultural product

Vietnam is an agricultural country with many agricultural export products ranked

"top" of the world As reported by MARD, in 2010 the total turnover of all agricultural exports reached a record high, estimated 19.15 billion, an increase of 22.6% over 2009 In particular, exports of agricultural products still account for the largest share, estimated at USD 9.95 billion, compared to the same period last year increased 24.22% This year is a successful year for exports of agricultural, forestry and fisheries of Vietnam There are 3 items gaining export value is over $ 3 billion: seafood, wood products and rice, one is over $ 2 billion (rubber) and two gain over

1 billion (coffee and cashew nuts)

However, most agricultural products produced in our country that is export-oriented, only a tiny amount for domestic consumption To study more about the real situation

of domestic agricultural markets, we will evaluate and analysis based on group of four key export products of Vietnam: rice, pepper, coffee and cashew nuts

* Domestic rice market:

Table 2.1: Vietnam Rice production and exporting (2005 – 2009)

Year Farming area

(thousand ha)

Output (thousand tons)

Export (thousand tons)

Domestic Using (thousand tons)

Rate of domestic consumption (%)

Table 2.1 shows that annual domestic consumption of rice make up more than 70%

of total production The rate of domestic consumption is declining due to increasing production and the trend of using more food instead of rice

Moreover, despite being leading rice exporting countries in the world but imported rice dominates nearly high quality rice market In the southwest provinces, rice of Cambodia and Thailand accounts for 50% -80% total volume of market In the North, the Tam Hai Hau, Du Huong, Bac Huong rice are “top” brands in the last year, but now Thailand's premium rice is gradually dominate the market In Ho Chi Minh City, foreign rice is more diverse Beside the rice originating in Thailand and Cambodia, rice is also come from Korea, Japan, Taiwan, and USA

In fact, people like to eat import rice because of the reasonable price, smelling and more delicious than the same type of rice grown in Vietnam Meanwhile, the Vietnamese’s premium rice such as Nang Huong, Cho Dao, Nang Nhang, Tam Xoan are very tasty, but the farming area and output are small, so they are insufficient to meet premium rice demand of the market

sweet-* Cashew nuts:

Since the Prime Minister issued decision of development cashew nut industry into

2010, this industry has grown strong in yield, production of raw cashew nuts, and export turnover Two years ago, export turnover of cashew nut ranks fourth after rice, rubber, coffee, and it has competitive advantages on the world markets

Currently, Vietnam is one of three major exporter of world, but both Vietnam producers and traders are leaving out domestic market The data for that consumption as follows:

Table 2.2: Domestic consumption of cashew nut (1995-2010)