Vietnamese e-commerce firms face challenges

Speaking at the 2024 Cross-Border E-Commerce Conference in Ho Chi Minh City on May 24, Phung Quoc Man, vice chairman of the Ho Chi Minh City’s Handicraft and Wood Processing Association said, "Last year, the consumer demand for wooden products decreased sharply by around 16 per cent compared to 2022, reaching only $13.18 billion."

"Exports of traditional goods have been facing many challenges due to low global economic growth, weak consumption, increased protection barriers, and many countries maintaining tight monetary policies. Meanwhile, e-commerce sales of furniture and handicrafts have been growing rapidly," Man added.

However, Vietnamese e-commerce firms' participation in the export market remains limited, as most businesses predominantly process orders and designs on behalf of foreign distributors. Many firms are small in scale, do not have enough capacity to build brands, and are unable to resist against sudden and continuous fluctuations in the market.

"To promote Vietnamese wood products, businesses must constantly make efforts to research consumer tastes and invest in improving operating capacities to meet international technical standards," said Man.

Truong Van Cam, vice president of the Vietnam Textile and Apparel Association, emphasised the need for businesses to improve production capacity to meet the needs of international customers.

"As Vietnam integrates with the global economy through a new generation of free-trade agreements, digital platforms are being increasingly considered as an effective solution to penetrate new export markets," said Cam.

Meanwhile, Nguyen Thi Minh Huyen, deputy director of the Department of E-commerce and Digital Economy, Ministry of Industry and Trade, said that Vietnam's e-commerce is going through a period of strong growth and has become an important component of the economy.

"Retail e-commerce sales have grown at an average rate of about 20 per cent over the past 10 years, putting Vietnam among the countries with the fastest growth in the region and the world," Huyen said.

Effective connections from the Department of E-Commerce and Digital Economy, along with Amazon Global Selling, mean Vietnamese businesses can now reach out to the global market through cross-border e-commerce better than ever before.

Gijae Seong, head of Amazon Global Selling Vietnam, said, "We strongly believe in Vietnam's capabilities and are committed to empowering businesses to achieve category diversification, build their brands, and expand globally."

According to a report from Access Partnership, Vietnam's business-to-consumer e-commerce export value is projected to reach VND296 trillion ($12.3 billion) by 2027.

Despite ongoing challenges, the country's export e-commerce market has continually demonstrated growth potential, as evidenced by the consistent presence of healthcare, home and kitchenware, clothing, and beauty products from Vietnam among Amazon's top-growing categories over the past five years.

The global e-commerce market is forecast to show strong growth over the next few years, with expected revenue reaching $7.4 trillion by 2025.

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