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The research utilizes data from the Vietnam E-commerce Association and the E-commerce Department of the Ministry of Industry and Trade from 2021 to 2023 to analyze e-commerce from the perspectives of consumers and businesses. This provides a comprehensive picture of e-commerce in Vietnam, revealing that Vietnam is a potential market for e-commerce development, with most investment coming from domestic businesses while foreign investment remains limited. To keep up with the global economic integration trend, the Vietnamese government needs to implement regulations and policies to encourage foreign investment.

Introduction

Currently, e-commerce is receiving significant attention from countries due to the benefits it brings. E-commerce is considered a “leveler,” as it allows newly established and small businesses to reach global markets. Additionally, it provides e-commerce applications, including ordering systems that enable customers to choose and place orders based on individual and personalized preferences. At the same time, e-commerce supports “network production,” which involves breaking down the production process into smaller parts with geographically distant contractors who are connected through computer networks. The benefits of network production include cost reduction, more focused strategic marketing, and the ability to support the sale of new products, services, and systems when needed (Andam, 2003).

However, besides the benefits, e-commerce has two groups of limitations: one group is technical, and the other is commercial. On the technical side, there are no international standards for quality, safety, and reliability, and the cost of Internet access remains high. On the commercial side, security and privacy are psychological barriers for participants in e-commerce, and many issues related to law, policy, and taxation remain unclear. Therefore, a study is needed to clarify the current state of e-commerce. This research analyzes and clarifies the state of e-commerce from the perspectives of consumers and businesses to provide a comprehensive picture of e-commerce in Vietnam.

Literature Review

E-commerce

There are various perspectives from scholars on e-commerce. According to Andam (2003), e-commerce is the use of electronic communication media and digital information processing technology in business transactions to create, transmit, and redefine relationships that generate value between organizations, as well as between organizations and individuals (Andam, 2003).

According to Ohene-Djan (2008) the reader is encouraged to consult the recommended texts for interpretations of the following concepts:

• Electronic commerce (e-commerce) refers to the process by which businesses trade with one another and manage internal processes through electronic connections,

• Electronic business (e-business) is often used interchangeably with e-commerce but focuses more on transforming key business operations through internet technologies.

From your reading, it should become clear that e-commerce encompasses more than just online shopping. A broader definition of e-commerce would also include electronic funds transfers, commonly used by banks, and business-to-business communications via the internet, extranets, and intranet networks (Ohene-Djan, 2008).

In this study, e-commerce can be understood as the process where organizations and individuals conduct all business activities, including marketing, sales, distribution, and payment, through electronic means.

The Nature of E-commerce

Three key concepts form the foundation of e-commerce:

1) The management of transactions and transaction costs through online technologies and computerized networks,

2) The redesign of business processes into logical, interconnected, and sequential activities, ensuring that businesses conduct transactions as efficiently and effectively as possible using online technologies and computerized networks,

3) The utilization of information technologies and computerized networks to support employee telecommuting or remote work, enabling flexible work arrangements, distributed workforces, and optimized productivity paths (Ohene-Djan, 2008).

Method

The research utilizes data from the Vietnam E-commerce Association and the E-commerce Department of the Ministry of Industry and Trade from 2021 to 2023 to analyze e-commerce from the perspectives of consumers and businesses, aiming to provide a comprehensive picture of e-commerce in Vietnam.

Results and Discussion

Consumers Participate in E-commerce in Vietnam

E-commerce is developing in most countries around the world. Vietnam, located in Southeast Asia, is part of this global trend. To assess the level of online shopping, we use the 2023 data from the Vietnam E-commerce Association to determine Vietnam’s position compared to other countries in terms of online shopping. Among 10 countries (as shown in Fig. 1), Vietnam ranks 9th in online shopping, with a rate of 60.7%, ahead of Australia and above the global average.

Fig. 1. Percentage of internet consumers shopping online weekly in selected countries in 2023 (Source: VECOM, 2023).

It can be said that the rate of online shopping in Vietnam is quite high, ranking in the top 10 globally and above the world average. Vietnam’s e-commerce revenue in the B2C format has seen significant growth over the years (as shown in Fig. 2). In 2018, the highest growth rate was 30%, and in 2023, it increased by 25%. Revenue reached USD 8.06 billion in 2018 and USD 20.5 billion in 2023.

Fig. 2. Scale of retail e-commerce market in Vietnam (Sources: VECOM, 2021, 2022, 2023).

The revenue increase is attributed to the rise in the number of online shoppers and the growing value of purchases per person (as shown in Table I). The share of B2C e-commerce revenue compared to the total retail sales of goods and consumer services nationwide was 4.2% in 2018 and rose to 8% in 2023. The number of internet users also showed an upward trend throughout the 2018–2023 period.

Target 2018 2019 2020 2021 2022 2023
Estimated number of consumers shopping online (millions) 39.9 44.8 49.3 54.6 57 61
Estimated value of one person’s online shopping (USD) 202 225 240 251 288 336
Proportion of B2C e-commerce revenue compared to total retail sales of goods and consumer service revenue nationwide (%) 4.2 4.9 5.5 7 7.5 8
Percentage of people using the internet (%) 60 66 70 73 73.2 78.6
Table I. Vietnam B2C E-commerce Revenue in 2018–2023 (Numbers in Billion USD)

Fig. 3 shows that 50% of people shop online, while 30% prefer traditional shopping, and the remaining 20% do not have a specific preference. This reflects the growing shift towards e-commerce, even though a significant portion of the population still values traditional shopping methods. As the online shopping trend continues to expand, especially in markets like Vietnam, it’s clear that consumer behavior is evolving rapidly.

Fig. 3. Consumers’ preferred shopping method (Source: Department of E-commerce & Digital Economy, 2023).

In general, the number of online shoppers in Vietnam accounts for a significant proportion and has been showing an increasing trend over the years. Vietnam is a potential market for e-commerce.

E-commerce Applications at Businesses

To gain a comprehensive view, the research evaluates e-commerce from the perspective of businesses. The main shopping sectors in Vietnam include wholesale and retail; automobile, motorcycle, and vehicle repair; construction; agriculture, forestry, and fisheries; manufacturing and processing industries; transportation and warehousing; mining; accommodation and food services; information and communication; financial, banking, and insurance activities; electricity, gas, water supply, and steam production and distribution; real estate activities; professional, scientific, and technological activities; arts, entertainment, and recreation; education and training; health and social assistance activities; administrative and support services; water supply; and waste management activities (Fig. 4). Among these, wholesale and retail, along with automobile, motorcycle, and vehicle repair, account for a significant share of 23.8%, while construction ranks second with a share of 19.6%.

Fig. 4. Main business areas of the enterprise (Source: Department of E-commerce & Digital Economy, 2023).

Operate Websites and Mobile E-commerce Applications

The main transactions are conducted on e-commerce platforms and social media with business activities (see Fig. 5). E-commerce activities in Vietnam are primarily carried out on Shopee and TikTok.

Fig. 5. Website/application providing e-commerce services (Source: Department of E-commerce & Digital Economy, 2023).

E-commerce in Vietnam is primarily funded by domestic enterprises, accounting for approximately 91.2% (see Fig. 6). State capital represents 7.7%, while foreign investment makes up a relatively small percentage of only 1.1%.

Fig. 6. Main source of investment capital for businesses (Source: Department of E-commerce & Digital Economy, 2023).

Thus, foreign investment in e-commerce in Vietnam is still limited. Therefore, the Vietnamese government needs to implement appropriate regulations and policies to promote foreign investment, facilitating deeper international integration.

Conclusion

The research indicates that Vietnam is a potential market for e-commerce, with the online shopping rate of Vietnamese consumers exceeding the global average, and businesses being the primary investors in e-commerce. Funding from domestic enterprises accounts for approximately 91.2%, state capital represents 7.7%, while foreign investment is relatively small at only 1.1%. To promote the development of e-commerce, the Vietnamese government needs to implement appropriate policies to increase foreign investment, benefiting both producers and consumers by providing access to high-quality and affordable products as international economic integration continues to expand.

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