Stakeholders see potential in cross-border e-commerce

At a workshop on promoting cross-border e-commerce two weeks ago, Nguyen Thi Minh Huyen, deputy director of the E-commerce and Digital Economy Agency under the Ministry of Industry and Trade (MoIT), stated that exports through such platforms are taking a significant share of total revenue in Southeast Asian countries. It is also one of the top priorities in economic development among countries in the region.

Stakeholders see potential in cross-border e-commerce, Photo: Shutterstock

“Cross-border e-commerce accounts for 30 per cent of the total e-commerce revenue in Thailand, while Vietnam records a rate of 37 per cent, and Malaysia and Singapore have the highest proportions with 44 and 60 per cent, respectively,” she said.

According to data from the MoIT, cross-border e-commerce accounts for over one-fifth of the global e-commerce value. Vietnam, as an export-oriented economy with strengths in textiles, footwear, rice, and agricultural products, possesses large potential and advantages in cross-border activities.

In 2022, the cross-border export revenue reached approximately $3.3 billion, and by 2027, this figure is projected to increase to over $11 billion.

“We have coordinated with Shopee, Lazada, Tiki, and international trading platforms to organise Vietnamese booths and goods weeks. We aim to introduce Vietnamese-made products to the international market and support small- and medium-sized enterprises along with manufacturers to sell their goods globally,” Huyen noted.

Mike Zhang, head of Vietnam Business at Alibaba.com, said international buyers on his platform have shown a strong acceptance of Vietnamese products, with a significant level of imports across various sectors. The main markets ordering Vietnamese goods include the US, Brazil, UK, Saudi Arabia, Australia, and Canada.

“Vietnamese products are most strongly ordered in sectors such as beauty, home and garden, food and beverages, consumer electronics, and agriculture. These sectors highlight Vietnam’s competitive edge of its products on the global stage,” Zhang said.

According to Metric statistics, in the first six months of 2024, the total revenue of the five largest e-commerce platforms in Vietnam (Shopee, Lazada, Tiki, Sendo, and TikTok Shop) is estimated to reach VND156 trillion ($6.25 billion).

In the context where they possess impressive growth potential and becomes a strong driving force for the digital economy, platforms are also leveraging existing advantages to enhance activities related to online exports, especially through foreign platforms.

Nguyen Lam Thanh, representative of TikTok Vietnam, stated that it aims to bring goods directly from manufacturers to consumers. TikTok will not limit this demand to one country but will expand to other nations in the region.

“TikTok is a new e-commerce platform, so we will prioritise development in domestic markets first, and then expand to export activities,” Thanh said.

“This year, we aim to bring goods and products from an ASEAN country to consumers across the region. Manufacturers will have the opportunity to expand their market and reach approximately 600 million people within the ASEAN bloc, while consumers in the region will also have increased access to quality items from neighbouring countries.”

Explaining the rapid acceleration of TikTok in the sector, according to Thanh, TikTok’s livestream sales format helps sellers easily convey the production process and their stories, thereby stimulating buyers to make decisions more easily. TikTok’s own advantages when expanding into cross-border markets will be retained and even more advantageous thanks to tech advancements, especially AI.

“Language barriers in cross-border e-commerce will be quickly resolved thanks to technological advancements. These are important reasons why TikTok has decided to prepare for the explosion of cross-border activities in the future,” Thanh noted.

Meanwhile, Shopee, a platform under the SEA Group from Singapore, has been operating in the Vietnamese market for seven years and has supported many small businesses to participate in the export race, specifically targeting the Southeast Asian market.

“Manufacturers can focus on production, while Shopee will take care of operating and promoting items to the market,” said Shopee Vietnam CEO Tran Tuan Anh.

According to Anh, Vietnam has great strengths in manufacturing, but the approach to consumers through e-commerce in Vietnam is still relatively new.

“We aim to have 1,000 export businesses through the Shopee platform by the end of this year and around 100,000 businesses capable of bringing products to the international market in the near future,” he stated.

Economic expert Vo Tri Thanh believes that cross-border e-commerce is a great opportunity for Vietnam, but in order to compete, Vietnam needs to have expanded technology platforms and distribution channels. Goods must have a sufficiently large production scale, ensure quality, and meet the growing trend of green consumption that is currently popular.

“When promoting products on such platforms, there should be stories associated with the goods, the people of Vietnam, and the culture and traditions,” Thanh said. “Furthermore, it is necessary to improve the regulations on electronic transactions, competition, intellectual property rights, ownership of assets, consumer protection, and issues related to digital infrastructure and logistics.”

A business index report by the Vietnam E-commerce Association indicates that the growth rate of Vietnam’s e-commerce in 2023 reached $25 billion, a 25 per cent increase compared to 2022, with online retail sales reaching $17.3 billion.

The latest figures from the MoIT indicate that the industry continues to be an important distribution channel, contributing to the development of supply chains and circulation both domestically and internationally. The revenue for the first six months of 2024 is estimated to reach $13.2 billion, a 28 per cent increase compared to the same period last year.

Tran Minh Tuan, director Digital Economy and Digital Society, Ministry of Information and Communications In Vietnam, the e-commerce sector contributes approximately 15-17 per cent of the total value of the digital economy by the end of 2023. Vietnam also aims to have e-commerce revenue account for 10 per cent of total retail revenue in 2025. We have closely collaborated with the MoIT to implement an initiative to promote digital transformation of enterprises, households, business households, and wholesale and retail stores. In addition, the ministry also collaborates with the Ministry of Agriculture and Rural Development and the MoIT to implement programmes to bring farmers and business households to e-commerce platforms. Currently, there are about 5.2 million farmer households running agricultural produce stores on platforms. Each year, over 1.1 million business households generate revenue from selling agricultural products through e-commerce transactions. The government considers e-commerce as one of the most important drivers to promote the development of the digital economy in the future, especially cross-border activities. Currently, Vietnamese digital technology enterprises have built up their business-to-business platforms, connecting with major platforms such as Amazon and Alibaba, so that Vietnamese goods listed on domestic platforms will also appear on corresponding foreign platforms, directly connecting buyers with sellers and manufacturers. Lai Viet Anh, deputy general director E-commerce and Digital Economy Agency, Ministry of Industry and Trade In 2023, Vietnam’s e-commerce achieved a growth rate of 25 per cent, making it one of the fastest-growing countries in East Asia and among the top 10 nations with the highest growth rates globally. The potential for development remains vast, as it accounts for approximately 8 per cent of Vietnam’s total retail sales and consumer service revenue. Currently, around 80 per cent of internet users have engaged in online shopping, and activities are spreading among the population. This trend has a strong appeal to small-and medium-sized enterprises and individual businesses. Meanwhile, the barriers to entry in the electronic market are lower compared to traditional markets, particularly when businesses aim to expand nationally or internationally through cross-border e-commerce. The MoIT is drafting a comprehensive plan for the 2025-2030 period, which will be presented to the government. The strategies for promoting cross-border e-commerce and exports will emphasise sustainable development, especially as green and sustainable consumption trends are prominent worldwide. In addition to focusing on sustainability, digitising production processes through technology in e-commerce will help businesses meet customer demand for traceability of goods, ensuring compliance with environmental requirements, preventing deforestation, and reducing waste. This approach will enhance the competitiveness of Vietnamese products in the international market.

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