Amazon – a fresh breeze of the e-business in Vietnam
Having large market-share worldwide, Amazon takes a powerful attraction when targeting the Vietnamese market. Since then, there have been plenty of opinions assuming that Amazon aims at stimulating the market competition among Alibaba (Lazada), JD.com (Tiki), or Shopee (an ecommerce giant from Singapore). Whatever objectives set, the Amazon presence carries out both opportunities and challenges for the e-business in Vietnam.
1. The growth of e-business in Vietnam
One of the factors stimulating e-business growth is the high demand for the internet, in which Vietnam is the top-country in terms of internet users. Therefore, online selling has a fast-growing rate with impressive recorded statistics and contributes to the country’s market economy in many ways. The following is the large-scale blooming of e-business in Vietnam.
Besides, online businesses can easily access the market while just using about 1/10 of the cost for marketing channels. Low advertising costs have increased the popularity of online sales, which grows not only on the domestic scale but also in the global market.
Since 2016, e-businesses in Vietnam have undergone significant breakthroughs by cooperating with international partners, making businesses participate in the e-business market, and marking the premise for the outstanding growth of e-business in Vietnam at present.
2. Opportunities for e-business in Vietnam when Amazon enters the market
The Amazon penetration into the Vietnam market has come up with new opportunities for SMEs. The country has a strong potential for traditional handicrafts, which is considered unique and ideal for selling online. With that strength, Vietnam will promote domestic products to international markets at competitive prices.
Under the support of Amazon Global Selling, Vietnam brands can integrate with international e-markets with significant growth, which is a step forward for the digital economy in Vietnam.
Vietnam has expertise in producing goods, so the participation of Amazon Global Selling meaningfully contributes to accelerating the market-expanding process for both international partners and consumers. That contribution can boost the working process for Vietnam businesses as well as the ecommerce market share of the economy.
3. Challenges from the penetration
Besides wide-open opportunities, e-business in Vietnam quite faces significant challenges from the Amazon advent. Firstly, Amazon makes domestic ecommerce in the face of fierce competition. The Vietnam market had welcomed Alibaba previously. Nevertheless, it was not overly ambitious at that time because large enterprises had their proven capability in this field, namely Shopee, Tiki, Sendo. However, the long-term race invisibly extends a boundary for SMEs to cross over or at least get close to the same level.
Secondly, publishing products in the international ecommerce field increases expenses. The more giants join the ecommerce game, the more earnestly and competitively the race of spending money becomes. However, plenty of e-businesses focus on the spending process of selling 1 billion dollars of goods without having correct forecasts on long term expenses. In the long run, over-spending will require more investment, affecting the bottom-line growth, namely the net profits of the businesses.
On the other hand, the origin and quality of goods need to be guaranteed. Regarding the current ecommerce market in Vietnam, the issue of fake or counterfeit products has not been solved thoroughly up to now. As a result, selling on Amazon will face restrictions if businesses can not control the quality of their goods. Simultaneously, it requires policies from the government to promote ethical businesses within the Vietnam economy.
In general, Amazon has created a new breeze for the e-business in Vietnam. It plays a vital role in stimulating market competitiveness, improving product quality, and user experience for great customer-oriented support. However, to do that, businesses need to have the right strategies in addressing challenges and difficulties to shorten the cooperation process with both partners and international customers.