In recent years, thanks to the development of Internet applications, payment methods, and global transportation solutions, cross-border e-commerce has increased remarkably. According to UNCTAD, by 2020, the total value of cross-border e-commerce will reach USD994 billion, nearly doubling that of 2017. Asia-Pacific region alone will reach USD476 billion.
Vietnam is considered as one of the countries with the fastest growth of e-commerce in the world, at 35% per year, 2.5 times more than Japan. However, this market still lacks the presence of global e-commerce exchange such as Amazon, Ebay and Alibaba. The leading trading exchanges only focus on domestic products business (or products made in China).
Understanding the need for purchasing oversea products, many basic-system cross-border trading firms have been established. Initially, the form of hand-carried goods or portable order have become quite popular as many people chose to purchase goods from them. Accordingly, customers search for places that sell products that they want in foreign markets, then discuss directly with the intermediary to set prices, delivery time. The procedures are usually implemented manually.
As the living standard increases, shoppers demand more optimal experiences, consistent after-sales and warranty services, helping them save time and buy goods from abroad. Based on that fact, cross-border e-commerce businesses should have emerged.
These businesses can be accessed via a website or mobile application. The interface of these platforms is quite similar to those of domestic online trading systems such as Lazada and Tiki. Users can filter products through the search bar. Each product clearly shows the selling price, payment method, shipping itinerary, user comment…
At the present time, if there is a foreign company doing business in the online product trading platform for Vietnamese people, that company will have great development potential. Because currently, the demand of Vietnamese customers buying on Amazon and other global trading platforms is constantly increasing. Consequently, it is necessary to have an online system for Vietnamese and foreigners living in Vietnam to buy more than 4 billion products on those e-commerce sites.
The investment in this field also helps customers easily access to the largest shopping seasons in the US and Europe such as Black Friday, Cyber Monday and Christmas. Brand products, big or small, are all brought at surprisingly huge discounts. With the ability to shop at real-time prices, customers in Vietnam can also hunt for exclusive items at very good prices.
With the service of buying hand-carried goods or portable order, buyers must wait for the merchants to quote. However, for this new business model, the entire cost of purchasing the product is the final price that the user has to pay, including overseas shipping, original market tax, shipping in Vietnam and tax at Vietnam. Therefore, it helps users quickly find items in an affordable price range.
For foreign investors, this sector is currently very attractive, but there will also be some obstacles. Creating a sales system similar to domestic e-commerce platform as an intermediary between sellers and buyers that is not the suppliers, as a result, cross-border e-commerce cannot support directly warranty and return products claims. However, investors may consider representing customers to work with suppliers when problems arise. Depending on the specific situation, there will be a way to protect buyer rights.