E-business index increases, but regional gaps still remain

The e-business index improved remarkably, but there are still weak geographic areas

At the event, Vietnam E-Commerce Association (Vecom), which compiled the index for the last five years except for 2016, detailed that online retail revenue increased by 35 per cent and shipping services revenue grew from 62 to 200 per cent on-year.

Meanwhile non-cash payments are increasing in Vietnam and drive e-commerce growth. According to the National Payment Corporation of Vietnam, online transactions using domestic cards in the last year rose by nearly 50 per cent in volume and 75 per cent in value year-on-year. Several affiliated marketing companies posted 100-200 per cent growth.

Dang Thuy Ha, director of Consumer Behaviour Research at Nielsen Vietnam, mentioned that among four billion internet-connected people by 2020 worldwide, 59 million will be Vietnamese (60 per cent of the population of the country), with an average of 25 hours per week per person spent online, which is “a huge potential for ecommerce development.”

She emphasised, besides urban internet users, consumers in rural areas are becoming an attractive target to online retailers as 80 per cent of phone users in rural areas have a smart phone with internet-connection.

Welcoming the increase in the sector in Vietnam, Dang Hoang Hai, director of the E-commerce and Digital Economic Department under the Ministry of Industry and Trade, said that e-commerce still faces challenges in tax management, customs, and logistics capacity.

Vecom also said in the overall development of e-commerce, the northern port city of Haiphong produced the most impressive growth and is a rising star, swiftly catching up with Ho Chi Minh City and Hanoi. However, the gap in e-commerce was still wide between cities and provinces in Vietnam.

The provinces with the lowest indexes were ones in the northern mountainous region of Dien Bien, Son La, Cao Bang, Ha Giang, Lai Chau, and southwest Vinh Long, Hau Giang, Soc Trang, and Bac Lieu where all the factors related to e-commerce, such as connection infrastructure, website and mobile application development, as well as investment in e-commerce were of low quality.

Some logistics companies complained over inadequacies in infrastructure in these remote areas, claiming they faced many difficulties in serving e-commerce customers.