Nearly 65,000 sellers leave e-commerce platforms

In the past two years, nearly 65,000 e-commerce sellers have withdrawn from the market. The number of active sellers has decreased by 15%.

Just in recent months corporations e-commerce Large foreign companies - with a focus on low-cost goods - are expanding into the Vietnamese market. Foreign goods come from developed manufacturing bases, with increasingly complete transportation networks, and now have the added "support" of low-cost competitive business models from technology corporations, giving them even more advantages. All of these factors are putting competitive pressure on Vietnamese goods.

We often use the image of a tripod to talk about the solid position of something... And this image is also suitable to talk about how to foreign goods through e-commerce is increasing competitive pressure on the Vietnamese market. The "pedestal" for foreign goods includes 3 "legs": Cheap production - E-commerce platform and Cross border transport.

The first and most obvious is the e-commerce platform: in the 4 largest multi-industry trading platforms in Vietnam today, more than 95% of the transaction market share belongs to foreign enterprises. This factor, when combined with the production base with competitive prices from developed countries, has helped foreign enterprises have the advantage of coordinating both supply and demand. That is, from the data on the platform, knowing what products Vietnamese consumers like, they can join hands with foreign manufacturing enterprises to supply those products at the most competitive prices.

Direct sales from manufacturers - a competitive "weapon" of foreign enterprises

More and more foreign e-commerce corporations are following the model of working directly with manufacturing enterprises to reduce product costs.

In the past 2 years, more and more foreign e-commerce corporations have followed the model of working directly with manufacturing enterprises. That means technology corporations will store and be responsible for processing and distributing all goods from the manufacturer. Cutting out many intermediate distribution steps to offer the cheapest possible retail price.

Mr. Jianggan Li - General Director of Momentum Works Market Research Company said: "A retail item on the floor, for example, is priced at 5 USD, but the manufacturer can sell it at only 1/10 of that price. Thanks to that, e-commerce businesses that follow the model of working directly with the manufacturer can greatly reduce the retail price."

The trend of preferring cheap products is creating an advantage for foreign goods. In the third quarter of this year, on just one major e-commerce platform, the amount of goods with warehouses located abroad sold in the domestic market increased by nearly 14% compared to the same period. Of which, nearly half were cheap items, under 100,000 VND/1 product.

"Warehouse livestream" - Vietnamese products face challenges behind rooms of a few square meters

Support policies from neighboring countries have helped form hundreds of e-commerce pilot zones and a network of warehouses near the border, causing Vietnamese goods to face many challenges.

A very important factor is that foreign enterprises have shortened the time for goods from abroad to Vietnam thanks to the remaining "leg" in the three-legged strategy, which is cross-border transportation. Support policies from neighboring countries have helped form hundreds of e-commerce pilot zones and a network of warehouses near the border. In addition, the logistics system in our country has continuously grown by double digits every year, helping consumers receive goods delivered from abroad, sometimes equal to the delivery time of goods ordered domestically. Recently, foreign enterprises have even begun to invest in the "inner-city livestream warehouse" model in some major cities to help foreign goods have the shortest route to reach Vietnamese consumers.

Following the advertisements, a group of reporters posing as a company in need of cooperation approached the business behind the "inner-city livestream warehouse" model. With a variety of services that the business provides from staff training, building sales channels, to providing goods sources. Selling online has probably never been easier through livestream sessions behind rooms of only m2. It is easy to come across imported goods.

E-commerce data research units say: the estimated proportion of goods with foreign delivery addresses currently accounts for the highest, about 12% of total e-commerce output in Vietnam. However, according to experts, this does not mean that the risk of Vietnamese goods losing market share to foreign goods is small.

Now Ms. Thanh has to accept the slump when sales have decreased by more than 50%. The trend of shopping through livestreams and entertainment videos is on the rise. Having to spend billions on advertising costs while competing to reduce prices is a problem that makes her helpless, perhaps to the point that she can only relieve it with tears.

"Everybody is livestreaming, so to compete, people have to reduce prices very deeply, maybe even lower than the cost price. They import goods from China in very large quantities and will have warehouses in Vietnam. They will hire Vietnamese KOLs to sell. And the prices are really cheap," said Ms. Diep Thi Diem Thanh - Deputy Director of SDVN StreetWear Fashion Brand.

In the past two years, nearly 65,000 e-commerce sellers have withdrawn from the market. The number of active sellers has decreased by 15%.

Need for cross-border e-commerce management policies to ensure fair competition

The Ministry of Finance is seeking opinions on removing the regulation on exemption of value-added tax on imported goods valued at less than 1 million VND sold via express delivery to ensure fair competition with domestic goods.

It must be clearly stated that with an integrated economy like Vietnam, it is understandable that foreign enterprises promote bringing goods into our country through new e-commerce models. However, the important issue that needs to be raised here is how to protect the manufacturing industry and Vietnamese goods from the risk of unfair competition? Some shortcomings in the policy have been identified by the authorities:

Exemption policy value added tax (VAT) on imported goods valued at less than 1 million VND sold via express delivery. Experts say that in recent years, the ease with which cheap foreign goods enter the domestic market while being exempt from tax is causing unfair competition. The Ministry of Finance also believes that this policy is no longer suitable for reality.

Associate Professor, Dr. Hoang Van Cuong - National Assembly Delegation of Hanoi said: "We must control the quality, if there are complaints or fraud factors, the trading floor must be responsible for handling them, if they cannot be handled, we must have strong measures to deal with these floors".

Mr. Phan Duc Hieu - Standing Member of the National Assembly's Economic Committee shared: "There are 2 roles, 1 is that businesses themselves must adapt to new business forms. Second is the role of the State and associations to support businesses, possibly have incentive policies, so that they can get acquainted and have a basis for doing business on e-commerce".

In the telegram dated November 26, the Prime Minister requested the Ministry of Industry and Trade and the Ministry of Finance to jointly study and develop a mechanism to strictly control goods imported via e-commerce. The solutions proposed must be consistent with Vietnam's international commitments. The Ministry of Finance is also seeking opinions on removing the provision of value-added tax (VAT) exemption for imported goods valued at less than VND1 million sold via express delivery. The business community as well as experts expect that appropriate solutions will be promptly implemented to support and increase the competitiveness of Vietnamese goods.

Source: https://baoquangninh.vn/gan-65-000-nha-ban-hang-roi-san-thuong-mai-dien-tu-3333323.html