Online exports – a good way to resolve business issues

Finding a way out of the woods

According to the Ministry of Industry and Trade (MoIT), many local exporters are facing a shortage of orders,especially long-term orders, due to the numerous difficulties facing the global economy.

Vietnam’s traditional markets are suffering while the pressure from competition in the international market continues to increase.

A recent IMF World Economic Outlook report says there are no positive signs for the world’s economy in 2012 and 2013, so it seems Vietnamese exporters will be grappling with various challenges for the foreseeable future.

Tran Dinh Toan, Deputy General Director of the OSB Investment and Technology Joint Stock Company (OSB), says exporting businesses are growing more pessimistic as the international economic situation deteriorates.

However, he warns, enterprises cannot afford to simply wait until the situation improves. Instead, they should restructure their organisation and be proactive in seeking out new clients and maintaining their operations.

They should also alter their strategies for identifying supply sources.  Toan recommended that exporters focus on specific markets and sign even small contracts to minimise risks, noting that embracing e-commerce is an effective way to achieve this.

E-commerce experts say domestic exporters used to sell their products to middlemen at low prices to avoid price-related risks. Now some are investing directly in the online export sector, which is a more proactive approach to expanding their business.

Local businesses lack experience

Tran Xuan Thuy, director of the business-to-business website Alibaba.com Vietnam, says that though online exporting has proved effective, it remains unfamiliar to many Vietnamese businesses.

He points out a number of shortcomings plaguing the Vietnamese online export centre, including the unprofessional and inefficient dealings with letters of inquiry and customer care.

He blames these shortcomings for local exporters not taking advantage of e-commerce channels to the same degree as their Chinese and Indian counterparts have.

OSB Deputy General Director Tran Dinh Toan attributes this problem to a lack of awareness weighing down Vietnamese enterprises.

Local businesses do not consider online exports as an important channel so they have not invested enough to develop it, Toan explains.

A further problem arises from the fact that after initial online contact is made with partners, all follow-up procedures, including confirming partners’ information, exchanging product details, taking orders, and processing payments, are still conducted through traditional channels.

Experts emphasise the importance of thoroughly researching potential business partners to avoid being defrauded. They advise domestic enterprises to use reputable websites such as www.domainsearch.com or www.whois.com to verify their partners’ emails, telephone numbers, addresses, and any memberships in relevant trade promotion organisations.