31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Aug 02, 2021 / 11:09

E-commerce to accelerate consumption of Vietnamese farm produce

Digital tools have facilitated the consumption of agricultural products across the country during the Covid-19 period.

The first ten tons of avocados sold out in ten days via a Vietnamese e-commerce platform has made Le Thi Tuyet, a gardener in the Central region, change her mindsets in trading, which is seen as “light at the end of the tunnel” when she has been struggling to overcome negative impacts caused by the Covid-19 outbreak for months.

Tuyet comes from Krong Buk District, the Central Highland province of Dak Lak, where is well-known for many special fruits of Vietnam, especially long-shaped 034 avocados.

 Le Thi Tuyet's virtual store on Sendo.vn.

Tuyet told The Hanoi Times that the volume sold at the traditional market was about one ton per month but intermediaries paid her only part of the total value and the remaining amount was paid later or even lost.

"The price is much lower than the one sold on the Sendo e-commerce platform," she added.

Avocado sale has been more difficult when the Covid-19 pandemic broke out last year, Tuyet said. Transporting goods was restricted to prevent and control the disease that made intermediaries stop purchasing.

“Meanwhile, selling on the e-commerce platform is guaranteed in terms of payment, besides, I also received support in terms of packaging and shipping from the e-commerce platform to make sure the completed delivery process,” she happily told The Hanoi Times.

In Moc Chau Town, a hub of fruits in the northern province of Son La, Phan Thi Ngoc, the owner of Quyet Thanh Agricultural Cooperative, felt extremely excited like Tuyet did.

She sold tens of tons of plum through the e-commerce channels of Shopee and Sendo in June. To meet the increased workload for the harvesting season, she tripled her workforce.

Since the Covid-19 outbreak last year, business households spent the whole of 2020 struggling to sell their produce. However, this year, Tuyet and Ngoc were able to participate in a program launched by Vietnam e-Commerce and Digital Economy Agency (iDEA) under the Ministry of Industry and Trade and some e-commerce platforms such as Sendo, Shopee, and Voso that assist their sale of agricultural products.

Tuyet and Ngoc were two of the many business gardeners receiving support from the program. They are trained in digital skills including how to run business in the digital environment, register accounts on the sites and online payment accounts, and implement the process of packaging, connection, and delivery.

Products sold on the e-commerce sites are required to meet VietGAP and GlobalGAP standards, labeled with traceability, food hygiene, and safety certification. This increased the faith of consumers in their crops, local insiders said. Many of them achieved better revenue than last year. 

“With the high price, the revenue from selling plums on Shopee, Voso.vn and Sendo.vn reached more than half a billion dong (nearly US$35,000) over one month,” Ngoc told The Hanoi Times.

 A staff is guiding a Bac Giang's farmer to post lychees on the e-commerce site. Photo: Vietnam Post

Farmers like the two business households directly approached customers and complete orders through sales on e-commerce platforms. Thanks to the guidance of e-commerce sites’ staff, Tuyet knew how to promote her products and understand customer needs, not via intermediaries like before.

A representative from Postmart, an e-commerce site owned by Vietnam Post, said, through the program, farmers and cooperatives had the opportunity to promote their images, introduce farm produce to customers as well as build their own brand. 

“Therefore, they will step by step master techniques for long-term agricultural product sale through e-commerce online channels,” he told The Hanoi Times.

Currently, there are more than 5,000 households nationwide having a virtual store, generating more than seven million transactions on Postmart.

Such programs have also solved a number of difficulties in the circulation of goods in some pandemic-hit localities and neighboring provinces.

Strengthen digital agriculture

According to Bui Huy Hoang from the iDEA, this was the first time that farmers have known how to build a “private brand” for their agricultural products in the digital environment.

Nguyen Dac Viet Dung, Chairman of Sendo, explained that private brands and personal brands have recently become a highly effective online sales channel.

“Therefore, creating conditions for farmers to stand out as representatives of their own products, is both to help them connect with buyers, sell more goods, and thereby expanding opportunities for them to do business in a long-term on Sendo,” Dung said.

In the first six months of the year, nearly 8,000 households and 15,600 agricultural products went to e-commerce platforms, up 191% and 268%, respectively over the same period last year.

A preliminary report of the Ministry of Information and Communications (MIC) revealed the total value of agricultural products sold on e-commerce platforms reached VND944 billion ($41.2 million), nearly three times higher than the same period in 2020.

Speaking at a recent meeting with the MIC on July 27, Deputy Minister of Industry and Trade Do Thang Hai said the increase in online transactions is the most effective solution in the context of the pandemic, contributing to ensuring the supply of goods.

Minister of Information and Communications Nguyen Manh Hung assessed new digital technologies, especially artificial intelligence (AI), have opened up a new future for e-commerce.

With the spirit of “Vietnamese people prioritize using Vietnamese products”, such programs to support farmers in selling agricultural products on e-commerce platforms will continue to be expanded to cover other crops in many regions of the country in the coming time, Deputy Minister Hai underlined.

Vietnamese shoppers are more familiar with e-commerce channels, with the satisfactory level being higher than previously in the context of the Covid-19 pandemic. 

The latest Vietnam’s E-commerce White Book 2021 conducted by the Vietnam e-Commerce and Digital Economy Agency (iDEA) under the Ministry of Industry and Trade revealed the number of online shoppers via e-commerce platforms increased from 52% in 2019 to 74% in 2020. 

Meanwhile, the number of shoppers via forums, social media networks, and mobile applications dropped from 57% to more than 30%. 

According to the report, the number of online shoppers grew about 10% year on year. Average spending for online shopping was US$240 per person, higher than the $225 spending of 2019.

 Source: Vietnam’s E-commerce White Book 2021. Chart: Phi Nhat

The iDEA also pointed out that 88% of Internet users, mostly between 18 and 45 years old, shopped online at least once in 2020, most of whom accessed online shops through mobile devices.  

Vietnam’s retail e-commerce revenue increased by 18% to $11.8 billion, accounting for 5.5% of total retail sales of goods and services in 2019. “Growth in e-commerce retail revenue surged exponentially during the 2016-20 period,” the report noted.

Cash remained the most preferred payment method for 76% of consumers. However, the report highlighted a surge in those using cashless payments including credit cards (from 17% to 20%), e-wallets (from 18% to 23%), and scratch cards (from 2% to 6%). 

Covid-19 has made Vietnamese online shoppers buy more items and higher value products than the pre-pandemic period, according to the report.