While e-commerce has had a two-digit growth rate in the last few years, the forwarding sector still cannot catch up with the pace. Consumer habits, transport problems and consumer confidence have caused difficulties for domestic firms.
According to Han Van Loi, director of BoxMe, Vietnam nearly ranks at the bottom in forwarding & delivery with the total revenue just equal to 1/10 of Indonesia’s and 1/12 of Malaysia’s.
Meanwhile, the service quality in Vietnam is still far below other regional countries. While 99% of orders in Thailand can be implemented successfully and most goods are delivered within a short time, it takes five to seven days on average and sometimes 10-15 days to have goods delivered in Vietnam.
Therefore, if Alibaba and Amazon land in Vietnam, the domestic market could fall into their hands.
However, Tuan Ha, CEO of Vinalink, believes that Amazon would find it hard to penetrate Vietnam.
The giant will have to step over Facebook first.
Private international forwarding firms hold 60% of the market share. ASL and FedEx have licenses to operate in Vietnam. However, Vietnamese firms are still leading the market
While foreign firms focus on providing services in large cities, domestic firms understand the rural market, from the transport conditions, geography, culture to consumers.
Besides, the technology applied by Vietnamese firms has been updated regularly.
Dat Pham, CEO of Miczone, said Alibaba tried to conquer the Vietnamese market through Lazada, a global player. While Lazada did not find it difficult to compete with tiki and sendo, it would have to contend with 1 million Vietnamese who sell goods on Facebook.
“Facebook has created a new generation of Vietnamese businesspeople who started with their own hands,” he commented.
“Vietnamese businesses can manage to win over big rivals in the market,” he said, adding that Domestic firms can improve their capability by selling goods through many different channels.
The Prime Minister in August approved a comprehensive plan for developing e-commerce in the 2016-2020 period.
Vietnam hopes 30% of the population would buy goods and services online, with average annual spending being US$350 per person; revenue from online B2C would increase to US$10 billion, accounting for 5% of total retail spending in the country; and online B2B would account for 30% of total export turnover in 2020.