EU-Vietnam e-commerce shows promise

This was highlighted at a seminar on October 18, organised by the Vietnam Institute for Development Strategies (VIDS) and Konrad Adenauer Stiftung, attended by researchers and policymakers.

At the event, VIDS presented figures demonstrating the cross-border e-commerce potential between the two markets, indicating growth prospects in the near future.

In his opening remarks, Nguyen Quoc Anh, deputy director of the VIDS, said, "Four years after the EU-Vietnam Free Trade Agreement (EVFTA) took effect, EU-Vietnam trade has achieved significant accomplishments, with Vietnamese firms gradually building e-commerce business models with the EU."

Nguyen Quoc Anh, deputy director, Vietnam Institute for Development Strategies. Photo: Phuong Uyen

Whilst global trade has slowed since before the pandemic, e-commerce has increased rapidly, averaging around 20 per cent. E-commerce revenue is expected to reach 24.5 per cent of total global retail sales in 2025, with cross-border e-commerce accounting for 22 per cent of total e-commerce revenue worldwide.

In alignment with this growth trend, the EU market records the world's third-largest e-commerce revenue, with online shopping rates increasing from 66 per cent to 76 per cent from 2018 to 2023.

Last year, Vietnam surpassed South Korea and the US to become the world's eighth fastest-growing e-commerce market. Vietnam's total e-commerce revenue is projected to reach 14 per cent next year, with cross-border e-commerce accounting for 37 per cent of total e-commerce revenue.

Tran Thi Thu Ha, senior researcher at the International Department of the VIDS, said, "EU-Vietnam cross-border e-commerce growth has achieved initial success thanks to e-commerce commitments in free trade agreements, particularly the EVFTA."

The EVFTA's regulations on cross-border e-commerce address issues of taxation, product quality management, consumer rights protection, and responsibilities of suppliers and intermediary trading platforms.

The potential is there for Vietnam's wooden furniture and handicrafts, food products, beauty products, natural herbal supplements, and jewellery sectors to record even higher revenues through e-commerce in the European market.

"Vietnam needs to prioritise policies that encourage the export of items of high demand to the EU," said Ha

Vietnam currently has policies encouraging cross-border e-commerce. Under Decree 80/2021, small and medium enterprises wishing to participate in cross-border e-commerce markets receive up to 50 per cent support for costs of establishing and maintaining accounts on international e-commerce platforms.

The Ministry of Information and Communications has also promoted cross-border e-commerce through ensuring postal infrastructure, digital infrastructure, telecommunications infrastructure, digital transformation, and information security, as outlined in the Plan for Vietnam's Information and Communication Infrastructure 2021-2030, with a vision to 2050, issued earlier this year.

Stakeholders see potential in cross-border e-commerce Realising the expectation of achieving over $11 billion in e-commerce exports by 2027 is a long-term challenge and requires timely support policies from platforms as well as state management agencies.

The tasks to tackle in global e-commerce In recent years, e-commerce generally and particularly in Vietnam has developed at a very fast pace and become an irreversible trend. According to reliable analysis, the global e-commerce market could reach $7.4 trillion of revenue in 2025, of which online sales account for 24.5 per cent of the total sales revenue of the entire retail industry.

Vietnam's e-commerce industry breaks new ground Amazon Global Selling Vietnam hosted the 2024 Cross-Border E-commerce Summit in Hanoi on October 9 to hear the latest results from Vietnamese-based sellers on Amazon and announce the company's strategic focus for next year.