Vietnam’s e-commerce thought to be defeated on home market

The Hanoitimes - Inferior in term of financial capability, less professional in the management of e-commerce websites, Vietnamese fashion product distributors fear they may be defeated o­n the home market.

Chinese e-commerce website lands in Vietnam

On September 8, Vancl.com, o­ne of the Chinese biggest website specializing in trading fashion products, officially made its presence in Vietnam at Vancl.vn. According to techinasia, Vancl’s growth has been mostly brought by the business in South East Asia and Russia. Vietnam alone makes up eight percent of the total overseas sales of Vancl. By September 2011, the growth rate from the Vietnamese market had reached 100 percent in comparison with the same period of 2011.

Nguyen Ngoc Diep, Director of Vatgia Company, when commenting about the information, said the existence of foreign websites like Vancl would make the e-commerce market more bustling. When a redoubtable rival appears, domestic companies would have to renovate themselves, optimize the systems to improve the management efficiency and the service quality.

“Customers would benefit most in a competitive market. Therefore, I believe that this is a positive sign for the e-commerce market,” he said.

However, this is not a good piece of news for Vietnamese companies like vatgia.com or chodientu.vn, because this means a stiffer competition in the market.

Sharing the same view, Nguyen Van Tuan, a senior executive of VC Corporation, said the e-commerce in Vietnam is still in the very early stage of development, which means that there are still many big opportunities for new comers. The existence of many service providers would make the market more bustling, while this would help Vietnamese people get familiar to new types of shopping and o­nline payment methods.

A nightmare for Vietnamese e-commerce websites?

Tuan said that Vancl, as a new service provider, offers the policies beneficial to customers. For example, buyers can return products or exchange for others within 30 days since the day of purchasing. The service provider has also promised to deliver goods free of charged, applied to the bills worth more than 250,000 dong.

However, Vancl still has not been doing very well in Vietnam, since its goods are not diversified enough. Especially, Vancl remains an unknown brand. Vancl, in thoughts of Vietnamese customers, is a Chinese brand. Meanwhile, Vietnamese people have turned their back to Chinese products after the information about the toxic Chinese products.

This explains why Vietnamese have boycotted Chinese Baidu, a social network when it tried to penetrate the Vietnamese market.

However, Diep admitted that the Vancl can attract people with its friendly interface, different features, and friendly to users. Especially, Vancl uses the technology from Vancl.com, which means no worries about technology problems.

Regarding the diversification of goods available, Diep said, if Vancl offers all the products available o­n Chinese Vancl.com to Vietnamese people, it may cause a nightmare to Vietnamese fashion e-commerce website, because Chinese products would be very cheap and competitive.

Besides, the financial capability and the professional experience in management and logistics services would also be the website’s great advantages to be used to compete with Vietnamese rivals.

“If domestic websites do not renovate themselves, they would meet big difficulties,” Diep said.

However, Diep has also pointed out the disadvantages of foreign websites when joining the Vietnamese market. It would cost the investors much money and resources to run the websites, which would lead to the high input costs, thus forcing them to raise the sale prices.

If Vancl applies the exact model designed for the Chinese market, it would have to spend time to make some changes to it to get integrated into Vietnamese conditions.

This is also the problem that hinders foreign big guys, such as Rocket Internet, to enter the Vietnamese market.