Barriers remain as firms pursue e-commerce growth with EU

Data from a mid-October seminar on e-commerce trends and implications for EU-Vietnam trade, organised by the Vietnam Institute for Development Strategy, highlighted the strong potential for cross-border e-commerce between the EU and Vietnam.

Barriers remain as firms pursue e-commerce growth with EU, photo: freepik.com

The seminar heard that the EU ranks as the world’s third-largest e-commerce market, offering significant potential for online retail growth. In addition, statistics from the Vietnam E-commerce and Digital Economy Agency, released in August, project that Vietnam’s cross-border e-commerce revenue will rise from $3.3 billion in 2022 to $11 billion in 2027.

Many Vietnamese companies are successfully capitalising on online export opportunities to the EU by researching and selecting products and markets with care.

Viet Coffee Co. Ltd. is investing in speciality green coffee beans, competing with major coffee-producing countries like Ethiopia, Panama, Costa Rica, and Kenya in the European market. For the 2022-2023 crop year, its Arabica Catimor Honey green coffee beans scored 81.83, earning speciality coffee status by the Coffee Quality Institute, an international non-profit organisation.

Similarly, DSW Co Ltd., an EU fresh fruit and vegetable exporter, shifted its focus from peppers and cashews to fresh fruit products meeting strict European standards after conducting market research in 2019. In the first half of 2023, DSW’s revenue on the Alibaba platform reached $2 million, a substantial increase from the $260,000 revenue recorded in 2020.

Also in the same year, DSW quickly gained prominence on Alibaba, with two product lines ranking among the top sellers out of 98.

CVI Pharma, a high-tech pharmaceutical and cosmetic manufacturer specialising in natural herbal products, has incorporated modern technology into its manufacturing process since acquiring the valuable Nano Curcumin compound technology transfer from the Vietnam Academy of Science and Technology over a decade ago.

Since its initial launch on Amazon’s e-commerce platform in mid-2023, CVI Pharma has achieved remarkable success within just one year, generating monthly revenues exceeding $20,000 from thousands of export orders to 22 countries, including Switzerland, France, and Norway.

Despite these achievements, Vietnamese businesses face challenges in online exports due to Europe’s unique and often difficult-to-access market. According to Tran Thi Thu Ha, senior researcher at the Vietnam Institute for Development Strategy under the Ministry of Planning and Investment, many businesses are struggling with high certification requirements, particularly concerning sustainable development and social responsibility.

“In the agricultural sector, companies face frequent changes in sanitary and phytosanitary certificates. Meanwhile, in wood furniture and handicrafts, firms must meet green energy standards, such as the Reach Certificate, FSC certification for sustainable forest management, and BSCI certification from the Amfori global business association, adding to their challenges,” Ha said.

She added that online exports to the EU also face legal hurdles around branding regulations and Europe’s meticulous shopping culture, which demands more detailed product information than other markets.

“The distance selling regulation requires sellers to provide comprehensive product details and disclose all costs, with buyers clearly agreeing to these terms. Exporters must also offer a minimum 14-day return and refund policy. Furthermore, branding regulations require exporters to ensure they do not infringe on registered trademarks and designs,” Ha said.

Sita Zimpel, project director at the German Development Agency, stressed the importance of fully understanding market requirements prioritising sustainability and social responsibility, particularly in the EU.

“Businesses must strengthen their digital capabilities and embrace the circular economy, with a focus on intellectual property rights and combating counterfeit goods, as the EU intensifies efforts in these areas. Organisations like the Agency for Enterprise Development can play a crucial role in providing companies with resources for regulatory compliance,” said Zimpel.

Zimpel also highlighted the government’s role. “Market access should be facilitated through matchmaking activities, trade fairs, and dialogues led by the Ministry of Industry and Trade. Rather than solely focusing on bilateral e-commerce, we should unite ASEAN stakeholders and use platforms like ASEAN Access to help entrepreneurs find partners,” she added.

Meanwhile, Nguyen Thi Thu Lien, vice chairwoman of the Vietnam Coconut Association, emphasised the role of intermediaries in supporting manufacturers. “Once businesses meet quality standards, intermediaries such as e-commerce platforms can help them fulfil strict requirements for goods, such as data security, allowing them to confidently enter the EU market,” she said.

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