How can Small Business in Vietnam Expand E-commerce Presence?
During the last years e-commerce has become one of the fastest-growing segments globally, with total sales about US$5 trillion in 2021. This phenomenon spreads across Vietnam as well, so small business here has a lot of opportunities to expand in e-commerce.
According to a report published by the Vietnam e-Commerce and Digital Economy Agency (iDEA), Vietnamese e-commerce market increased by 18%. It reached $11.8 billion, accounting for 5.5% of total retail sales of consumer goods and services within the country. Moreover, Vietnam is the second-fastest-growing e-commerce market in Southeast Asia with nearly 69 million internet users.
Read on to find out why small business in Vietnam should expand in e-commerce sector and how to do it.
According to a report published by the Vietnam e-Commerce and Digital Economy Agency (iDEA), Vietnamese e-commerce market increased by 18%. It reached $11.8 billion, accounting for 5.5% of total retail sales of consumer goods and services within the country. Moreover, Vietnam is the second-fastest-growing e-commerce market in Southeast Asia with nearly 69 million internet users.
Read on to find out why small business in Vietnam should expand in e-commerce sector and how to do it.
Reasons to start online sales in Vietnam
Smartphone penetration in Vietnam has recently reached about 63%. This fact is closely connected with a sharp increase of online purchases. Currently, more than 61 million of Vietnamese are active smartphone users.
- Information Technology Agency of the Ministry of Industry and Trade published a report. According to it, the majority of small business in Vietnam and medium-sized enterprises spend 30% of their budget on technological development.
- Numerous forecasts claim that 70.1% (up to 71 million) of Vietnamese will shop online by the year of 2025. It is 17% more than present numbers (53%).
- According to the forecasts, annual growth rate of Vietnamese e-commerce market will be 6-7% until 2025. Generally, it is extremely perspective and promising area for business development.
How to start an e-commerce business in Vietnam
To establish online presence through e-commerce in Vietnam, small business must be familiar with some features of running e-commerce business in the country. According to the Vietnamese law, foreign companies need to meet requirements before doing it.
First thing that needs to be done is registration of your company before making any transactions. To register e-commerce business the company needs an investment registration certificate (IRC) and an enterprise registration certificate (ERC). If you are going to sell products directly to the end consumers, you will have to acquire trading/retailing license. To receive direct payments from customers, the company must apply for an Intermediary Payment license. In other cases, it can cooperate with entities which already have an Intermediary Payment license such as Momo, and Zalo Pay.
First thing that needs to be done is registration of your company before making any transactions. To register e-commerce business the company needs an investment registration certificate (IRC) and an enterprise registration certificate (ERC). If you are going to sell products directly to the end consumers, you will have to acquire trading/retailing license. To receive direct payments from customers, the company must apply for an Intermediary Payment license. In other cases, it can cooperate with entities which already have an Intermediary Payment license such as Momo, and Zalo Pay.
Then, the company needs app or website registration as an e-commerce platform. It is necessary for websites that serve as platforms where other sellers and buyers conduct any transactions. You will have to prepare notarized copy of the Enterprise Registration Certificate (ERC), statute of management of the e-commerce service website and others. Medicine, cosmetics, processed foods, beverages, and others have to be registered too.
Channels for online sales
There are 3 most widespread types of e-commerce business in Vietnam.
Online retailers
They buy the products they want to sell and store them until they are sold to customers. Many online retailers are those who own traditional retail shops on the street.
Online marketplaces
Online marketplace provides a website or a platform for selling different products. Customers conduct all payments on this particular platform. The largest Vietnamese marketplaces are Sendo, Shopee, Tiki, and Lazada. Such international marketplaces as Amazon, eBay, and Alibaba are quite widespread among population in the country as well.
Online classifieds
They can be considered as an online classified listing service where advertisers post their advertisements of the particular commodities. The main difference between marketplace and classifieds is that the last ones do not receive payments, customers pay directly to the seller.
Awesome products Co. is a Vietnamese distributor that can help you to start business in Vietnam and sell your products here. We offer such services as comprehensive FMCG marketing support including merchandising, promo activities, and on-shelves promotions. Awesome products Co. can also help your company to enter major marketplaces in South East Asia, Europe, and North America. We have a rich experience of selling our brands on Lazada, Shopee, Tiki, Sendo, and Amazon in different countries.
Contact us and start your business in one of the most promising country in Southeast Asia!
Online retailers
They buy the products they want to sell and store them until they are sold to customers. Many online retailers are those who own traditional retail shops on the street.
Online marketplaces
Online marketplace provides a website or a platform for selling different products. Customers conduct all payments on this particular platform. The largest Vietnamese marketplaces are Sendo, Shopee, Tiki, and Lazada. Such international marketplaces as Amazon, eBay, and Alibaba are quite widespread among population in the country as well.
Online classifieds
They can be considered as an online classified listing service where advertisers post their advertisements of the particular commodities. The main difference between marketplace and classifieds is that the last ones do not receive payments, customers pay directly to the seller.
Awesome products Co. is a Vietnamese distributor that can help you to start business in Vietnam and sell your products here. We offer such services as comprehensive FMCG marketing support including merchandising, promo activities, and on-shelves promotions. Awesome products Co. can also help your company to enter major marketplaces in South East Asia, Europe, and North America. We have a rich experience of selling our brands on Lazada, Shopee, Tiki, Sendo, and Amazon in different countries.
Contact us and start your business in one of the most promising country in Southeast Asia!
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