CHAPTER 2: SITUATION OF CROSS-BORDER E-COMMERCE
2.1 CURRENT SITUATION OF CROSS-BORDER E-COMMERCE
2.1.4 Popular e-commerce model in Vietnam
As discussed in Chapter 1, e-commerce exists and develops with the internet platform. It helps to connect sellers and buyers without being hindered by geographical distance. Based on classification by participants, e-commerce includes seven forms, but in Vietnam, e-commerce activities exist mainly under two models, these are B2C and B2B.
2.1.4.1 B2C model (Business to Customer)
B2C is a model understood as trade between businesses and consumers, in other words, the commercial transaction between businesses and consumers through the internet. The main feature of the B2C e-commerce model is that the customers are individual users. These users only need to use the internet and buy products to serve their
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Using e-commerce application skill Website and e-commerce floors management skill E-commerce project implementation skill Database administrator skill Online marketing skill Online payment processing skill
Figure 2.3: Skills relate to e-commerce are difficult to recruit
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needs for consumption. Because of individual users, there is no need to negotiate too much between the two parties. All purchase conditions, prices, and commodity policies are updated in detail on the website. Customers need to read the terms and prices and decide whether to buy or not.
* The development situation of the B2C e-commerce model in Vietnam
According to data from the "Vietnam e-commerce white paper 2020", B2C e- commerce revenue achieved a positive growth with 10.08 billion USD (2019), which shows that Vietnam's e-commerce industry is developing well and tends to increase in the future. In addition, according to this report, the number of Vietnamese people using the internet has increased significantly from 60% (2018) to 66% (2019) with an estimated value of $225 online shopping per person.
Source: Vietnam e-commerce White paper 2020 B2C e-commerce business is a popular form used by stakeholders. This model development is mainly assessed on the following factors: The website of the enterprise, the business situation on social networks, the business situation on e-commerce floors, Business on mobile platforms. According to a survey conducted by the Vietnam E-
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Figure 2.4: Revenue of B2C e-commerce in Vietnam 2015-2019 (billion USD)
B2C Revenue Growth rate
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commerce Association on more than 4,000 enterprises across the country, the results are as follows:
Regarding the establishment of an enterprise's website: 42% of enterprises participating in the survey said that they have built a website. This rate is slightly lower than the rate of 44% in 2018. A part of enterprises has many effective channels to do business instead of focusing on online businesses only. However, the survey also showed that the majority of enterprises that had websites are focusing on promoting their website: 46% of enterprises said that they updated information daily and 24% said that they had updated weekly on their website.
Regarding the business situation on social networks: Business trends on social networks in 2019 still increase steadily because this is an effective channel with low costs, attracting not only small businesses but also large businesses. Among the surveyed enterprises, 39% said they sold goods on social networks (an increase of 3% compared to 2018).
Regarding the business situation on e-commerce floors: 2019 marked the emergence of business models through e-commerce floors. With the fierce competition among floor suppliers, vendors have multiple choices of channels with the best support policies for business on multiple platforms. Accordingly, among the surveyed enterprises, 17% said they did business through e-commerce floors, increase 5% from the previous year, had the highest rate within the last 5 years. Hanoi and Ho Chi Minh are the two cities with the highest proportion of enterprises doing business through e- commerce floors at the same level of 23%.
On mobile business: Consumers are changing the way they search and place orders from traditional ways to new methods that have more convenient experiences.
However, it seems that the application of mobile platforms still only stops at large enterprises with advanced business strategies and appropriate resources. The survey showed that in 2019, about 17% of businesses said they had a mobile version website.
This rate has been fixed for many years. Similar to the mobile version website, the
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proportion of businesses with a mobile sales application in 2019 increased slightly from the previous year, from 14% in 2018 to 16% in 2019.
2.1.4.2 B2B model (Business to Business)
This is a business model predicted to strong develop in the future by experts in the e-commerce industry. The reason is a cooperation between enterprises will bring more diverse benefits as well as high efficiency. Some websites following the B2B model are Hotdeal, Foody, Lazada, Tiki,... At these websites, businesses desiring to sell products will post product information (image, dimension, status,...) and promote regularly. Businesses wishing to buy will see reviews and place orders directly under the protection of rights and compliance with the rules of these intermediary B2B e- commerce websites.
According to the E-commerce Index Report (VECOM, 2020), the efficiency of selling through online tools is highly appreciated. 40% of businesses participating in the survey highly appreciated the effectiveness of selling via social networks, followed by the effectiveness of selling through their websites (26%), through mobile applications (20%) and through an e-commerce platform (19%).