Ecommerce

Barriers to the ecommerce industry in Vietnam

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With impressive recorded statistics, ecommerce businesses are increasingly asserting their essential role in the economy. However, together with positive development, the e-business field contains various challenges, evolving into barriers to the ecommerce industry and getting even more complicated in the Vietnamese market.

1. Quality of goods – one of the barriers to the ecommerce industry

The variety of products published on every ecommerce website is always diversity-guaranteed to meet almost the market needs. However, ensuring the criteria of goods quality has been an unresolved question up to now. The burning issues of low-quality products, counterfeit consumer goods are eventually uncontrollable and exist in the market. In-depth, those effects can be derived from a couple of factors that can be analyzed from the perspective of the sellers, ecommerce enterprises, and consumers.

quality of goods

Low-quality products are considered to be the factor that most affects the business-reputation

The seller’s consciousness

The low-quality of goods has come from the traditional trading model operated offline, and merchants inevitably take responsibility in that case. With the offline model, although consumers can contemplate seriously, the product quality is still sellers’ responsibility and control. Uncontrollable-quality sources become a critical issue when merchants provide goods with a profitable price to get much higher returns, by selling fake or inferior quality products with very attractively “inexpensive” prices. In the flourishing process of online business, those unsolved issues have the chance to spread across the online-offline frontier and lose control.

The perception of ecommerce enterprises

When the quality issue emerges, e-firms are the first to be impacted. Those types, namely B2C and C2C, act as middlemen for merchant support to sell products on ecommerce platforms.

As a consequence, those enterprises restrict the source of inferior products and entirely rely on consumer feedback to address the issue in a very passive way. The quality barrier prevents enterprises from gaining consumer trust to maintain their loyalty.

The buying awareness of consumers

The spread of low-quality goods partly comes from consumer awareness. In the e-market, there is still a consumer group preferring inexpensive or on-sales items to other high-price and authentic products to save the living cost or be able to try a variety of products. They tend to choose low-price items neglecting the origin and information while never complaining about the lack of product-clarification. Low-awareness behavior gradually contributes to the growth of uncontrollable-inferior products.

It is obvious to see that the growth of poor quality products depends on many factors and responsibility of sellers, businesses as well as consumers, for the sake of a healthy and trustworthy market.

2. Hard-solving problems in changing buying process habits

The need to change buying behavior from offline to online is also one of the barriers to the ecommerce industry in Vietnam. To certainly clarify, take a look at three fundamental behavior-levels happening when consumers make a purchase.

buying process habits

The personas buying process has eventually constructed unchangeable habits of customers

The first group is pure traditional shoppers, who tend to see and touch what to buy. They wholeheartedly believe their eye-process can ensure more quality and conformity of the product. Therefore, they never trust any online items because of unmanageable-value. As a consequence, changing the buying habit of this group is the most challenging requirement.

The second group is hybrid buyers combining traditional and modern buying styles. That hybrid group tends to select-for-best. For instance, they can quickly add a book or ten pens to their cart because it is more convenient than spending time buying at the bookstore. However, they will directly go to a clothing store to choose an item that fits their size as well as ensure the fabric quality. That behavior similarly happens when they buy shoes, bags, or other fashion items. In brief, hybrid customers have changed their buying habits in most popular fields over the years. Hence, there will be much higher requirements for unique products such as fashion items, technology devices, motorcycles as well as cars in some cases.

The last group tends to complete online shopping. They take advantage of online shopping as a convenient and speedy tool, which can help them save more time during the shopping process. However, there are still some challenges for this group, which is to maintain trust-worthy and credibility to upgrade target consumers to loyal customers.

While the increasing mobile-usage has somewhat raised the online shopping demand, the user-habit transformation is a worth-factor that needs better solutions in long-term strategies. In particular, the significant element affecting ecommerce user-habit is the story of quality-expectation as well as the reliability of online stores.

3. Barriers to the ecommerce industry in Vietnam include long-term investment

Long-term productive resources in the ecommerce market is also a consideration to be addressed. For this purpose, the ongoing need includes warehouse management, branding & marketing, payment & shipping processes. As a consequence, all of the elements should require enterprises to keep the non-stop funding on continuous losses.

long-term investment

Most ecommerce enterprises spend massive capital inflows in the long run

Along the same lines, small and medium-sized enterprises can not afford long-term competition versus the ecommerce giants in the market. For instance, the presence of international names like Alibaba, JD.com, or Amazon creates an enormous distance for other SMEs to overtake.

In general, the capital investment race invisibly makes the large ecommerce businesses more robust and extensive. Meanwhile, it oppositely generates more barriers to the ecommerce industry in Vietnam due to the lack of sufficient capital in the long term. Following this, depending on each organization, there will be many issues when operating an e-business. Therefore, it is necessary to have the most comprehensive outline and meticulous ecommerce study in order to set the oriented developing goals.

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barriers to the ecommerce

Barriers to the ecommerce industry in Vietnam