“Big game” of Vietnamese small and medium enterprises

Small and medium-sized enterprises exporting Vietnamese goods online have contributed significantly to bringing Vietnam's cross-border e-commerce to an expected value of 10 billion USD, becoming the 5th largest export industry by 2026.

Google “shipped” Vietnamese goods to the world via Amazon “Google Singapore has a gym for employees, I often go there after work. One day I came across the Yes4All brand, it seemed strange, I went home to learn more and it turned out that this was a Vietnamese brand. Later, when I went to other Google offices around the world and saw that brand present in the gym, I wondered: Why can a Vietnamese business do that? Connecting with Yes4All, I found the answer: This business has been exporting via the Amazon cross-border e-commerce platform for many years now”, said Mr. Brandon Thanh Do, Director of New Customer Development for Southeast Asia - Australia and New Zealand of Google.

Mr. Brandon Thanh Do, Director of New Customer Development for Southeast Asia - Australia and New Zealand of Google shared information at the "Cross-border E-commerce Forum 2024" recently organized by the Vietnam E-commerce Association (VECOM) in Hanoi. (Photo: Binh Minh)

Working with Yes4All, Mr. Brandon realized the difficulties of Vietnamese businesses after successfully exporting online: Limited investment resources to expand international markets. “We proposed to Amazon and Yes4All that Google could provide more support on platforms, warehouses, logistics..., and even payments. In fact, on Google Search, YouTube and other Google platforms, many users have the need to buy products on Amazon. We worked with Yes4All's marketing team to solve the "problem" of leading Google and YouTube users to Yes4All's store on Amazon, thereby helping Yes4All not have to create a new website, not have to operate a new payment channel or warehouse, but still reach more customers", Mr. Brandon excitedly shared the story of many parties working together to help Vietnamese businesses better access the international market. Yes4All is a manufacturer of a variety of export products including home fitness equipment, furniture, pet-related goods, etc. Within 1 week of Brandon's team participating in testing the first 5 Yes4All product codes, high-quality traffic from Google Search has significantly boosted the business's sales on Amazon, achieving a 340% ROAS (return on ad spend) growth. "Moving forward", the Yes4All marketing team quickly deployed a Google Search strategy with 100% sports product codes, thereby improving marketing efficiency and increasing Vietnamese brand coverage. According to Google's Director of New Customer Development for Southeast Asia - Australia and New Zealand, Vietnamese small and medium-sized enterprises like Yes4All have many opportunities to export online. With the development of new technology, businesses can access multinational markets and international customers more quickly and easily through online channels, without having to go directly to international fairs like decades ago. International consumers are also more open to imported products. “About 5 years ago, many Australians were not very excited when seeing imported products, including “Made in USA” products, because they wanted to buy domestic products. However, in recent years, their mindset when shopping for international goods has changed, many “Made in Vietnam” handicraft products are also of interest to them, and are highly appreciated for their quality,” Mr. Brandon illustrated. To “win every battle” when entering foreign markets, Google representatives noted that Vietnamese businesses must “know themselves and their enemies.” First of all, you must know what the potential market you are targeting has demand for the product, which competitors are competing in this field... Next, you must know how to choose an effective sales channel: your website or a cross-border e-commerce platform or another channel. And finally, when bringing the product to the international market, it must be suitable for international users. "In each country, there will be some differences in customer care, payment... For example, consumers in the Australian market value privacy very much, rarely call the customer care hotline, when there is a problem, they just want to go to the website, fill out a form, then the hotline will call back to take care of them. Understanding the differences of each market will help Vietnamese businesses succeed," Mr. Brandon noted. Recently, Google has deployed many useful free tools for businesses wanting to export Vietnamese goods. These include: Google Trend helps identify potential markets; Market Finder helps find markets that have demand for the products that businesses sell on their websites, providing guidance on how to best reach customers in those markets... "Recently, we are implementing a "hands-on" support program for the first 6 months, helping Vietnamese businesses come up with the best export strategy. Vietnamese businesses that are exporting through cross-border e-commerce platforms like Amazon, or are exporting through their own websites, or even do not know which direction to export can all participate in this program," a Google representative shared quite attractive information for small and medium-sized businesses that want to find more opportunities to increase revenue and expand their markets.

In the period 2020 - 2025, the growth rate of global cross-border e-commerce will increase 2.3 times faster than the growth rate of normal e-commerce. (Illustration photo: Internet)

Potential to become Vietnam's 5th largest export industry Vietnamese enterprises are in a very favorable position in the global cross-border e-commerce "game" when Vietnam ranks 5th in the Top 10 countries in the 2022 e-commerce retail sales growth ranking announced by eMarketer (Brazil 22.2%, Indonesia 23%, India 25.5%, Philippines 25.9%, Vietnam 19%). Not long ago, Access Partnership proposed a scenario for the development of Vietnam's cross-border e-commerce with encouraging numbers: It is expected that by 2027, the enthusiastic participation of small and medium-sized enterprises will help the value of B2C (business to consumer) e-commerce exports increase 2.4 times compared to the "business trajectory as usual", reaching about 12 billion USD (296.3 trillion VND), promoting trade surplus and trade surplus for Vietnam. According to AlphaBeta's forecast, Vietnam's average annual cross-border e-commerce growth in the 2021-2026 period will reach 20%; by 2026, it will reach a value of about 10 billion USD (256.1 trillion VND). "This figure of 10 billion USD is very meaningful. At that time, cross-border retail e-commerce - B2C will become the 5th largest export industry in Vietnam in the Top 10 industries with an export value of thousands of billions of VND", Mr. Trinh Khac Toan, Director of the Northern Region of Amazon Global Selling Vietnam emphasized. Amazon's data system also recorded many positive figures: Vietnamese businesses have expanded their international business scope with the number of products exported and sold on Amazon increasing by 300% in the past 5 years. In 2023 alone, more than 17 million Vietnamese products were sold on the Amazon cross-border e-commerce platform; The export value of Vietnamese enterprises via Amazon increased by 50% compared to the same period in 2022. “Amazon operates in 23 markets, can support businesses to reach more than 200 countries and territories globally through cross-border e-commerce sales. We have more than 200 million customers - very loyal shoppers, nearly 2 million small and medium-sized enterprises worldwide are selling on Amazon, more than 61% of goods sold on Amazon globally come from small and medium-sized enterprises”, Mr. Toan added more information about the great opportunities awaiting Vietnamese small and medium-sized enterprises.

Mr. Trinh Khac Toan, Northern Region Director of Amazon Global Selling Vietnam. (Photo: Binh Minh)

In the traditional business model, to bring products made in Vietnam to the world market, they must go through many intermediaries such as exporters, importers, wholesalers, retailers, and finally reach consumers worldwide. In this model, Vietnamese manufacturers can only participate in the first "link", which is supplying the goods they produce. This is the lowest "link" in the value chain to consumers. At the lowest "link", the profit earned in the supply chain is not high. When the control of transportation, distribution, and branding belongs to distributors and retailers worldwide, the goods produced by Vietnamese enterprises are not necessarily owned by Vietnamese enterprises. On the other hand, Vietnamese enterprises cannot receive quick and accurate feedback from customers, thereby having no opportunity to improve their competitiveness as well as the quality of goods. The advent of the Internet, technology and cross-border e-commerce platforms has helped turn the situation around: Vietnamese manufacturers and brand owners can bring "Made in Vietnam" goods to consumers abroad, bypassing many intermediaries. After 4 years of supporting thousands of Vietnamese businesses to succeed in cross-border e-commerce activities through the Amazon platform, Mr. Toan recommends that Vietnamese businesses: They should immediately participate in the "game" of cross-border e-commerce. In the next 2-3 years, if they do not participate, they will become backward and slow. The Northern Regional Director of Amazon Global Selling Vietnam emphasized 3 major benefits that the cross-border e-commerce model brings to businesses, especially small and medium-sized enterprises: Controlling the flow of goods to be able to respond quickly from the target market, from customers to increase the level of competitiveness; Better cash flow management, the cash flow will return faster to continue reproduction and trade; Being able to build a global brand – a very important asset for businesses. “We have an online Seller University platform that includes documents in Vietnamese summarizing success stories and challenges when selling on Amazon. We also have programs in conjunction with partners to support Vietnamese businesses, such as coordinating with the Department of E-commerce and Digital Economy of the Ministry of Industry and Trade to implement the theme “Cross-border e-commerce – Breakthrough era”, aiming to train more than 10,000 human resources in Vietnamese businesses in cross-border e-commerce within 5 years,” said Mr. Toan.

According to eMarketer & Zion Market Research, in the period 2020 - 2025, the growth rate of global cross-border e-commerce will grow 2.3 times faster than the growth rate of conventional e-commerce. It is forecasted that from 2020 - 2027, the annual growth rate of global cross-border retail e-commerce will reach 28.4%.

Mr. Nguyen Thanh Hung, Senior Advisory Council - Vietnam E-commerce Association: The growth rate of online exports is 4 times higher than the average growth rate of the export sector. We hope that the Ministry of Industry and Trade and related departments and sectors will pay more attention to the online export sector - a "child" born later but growing too fast, needing careful care to avoid falling on the way.

Ms. Anna Tran, Pingpong representative: After selling products abroad on the online platform, many Vietnamese small and medium enterprises face difficulties in payment: How to bring foreign currency back to Vietnam most conveniently; How to convert foreign currencies to each other as quickly as possible with the best exchange rate in the context of hourly and minutely fluctuating exchange rates; How to use revenue from online exports to continue paying partners and suppliers abroad... We can help cross-border sellers remove payment barriers. For example, sellers can receive revenue from foreign countries in multiple foreign currencies to the same Pingpong account.

Source: https://vietnamnet.vn/cuoc-choi-lon-cua-doanh-nghiep-vua-va-nho-viet-2302661.html