Faced with pressure from Temu's cheap goods, what do Vietnamese businesses do to maintain their 'home turf'?

Faced with the "storm" of cheap goods coming from Temu, Mr. Tran Van Hien said that domestic enterprises must research niche products and promote their "internal" strengths.

Sharing of Mr. Tran Van Hien - Deputy Head of Training and Membership Department, Vietnam Association of Small and Medium Enterprises (VINASME) with Industry and Trade Newspaper about the current situation and solutions for domestic enterprises in the face of the "storm" of cheap goods from foreign e-commerce platforms flooding the Vietnamese market.

Mr. Tran Van Hien - Deputy Head of Training and Membership Department, Vietnam Association of Small and Medium Enterprises

Currently, many e-commerce platforms such as Shopee, Lazada, Temu,... provide cheap goods to enter the Vietnamese market and occupy a large market share. Could you tell us how this affects domestic enterprises, especially small and medium enterprises?

It must be said that e-commerce platforms have brought many advantages to both businesses and consumers such as: Access to large markets, cost reduction, convenience, product diversification, flexible payment, improving customer experience, promoting competition between sellers and businesses, easily managing customer data effectively has gradually become a choice for sales businesses and consumers in modern society.

Therefore, traditional businesses have been seriously affected and created many challenges and consequences, especially when the Covid-19 pandemic broke out in late December 2019.

Currently, e-commerce platforms present in Vietnam mainly come from the Chinese market with strengths that have been directly affecting the production and business activities of domestic enterprises, especially small and medium enterprises that are on the path to recovery, after 3 years of being strongly affected by the pandemic.

The influencing factors are reflected in many different aspects such as: E-commerce platforms often provide products that are competitive in price because they sell directly from the manufacturer to the consumer. Meanwhile, small and medium enterprises, especially those operating under the traditional business model, have limited capital resources, high production and marketing costs, and outdated technology, making it difficult to offer competitive product prices.

Consumer habits have changed a lot, consumers tend to prefer imported goods, with cheap prices, this has made domestic goods less popular and is also one of the factors that directly cause difficulties for small and medium enterprises in the country.

Another problem is that small and medium-sized enterprises face many difficulties in finding effective distribution and marketing channels while the market is dominated by e-commerce platforms with large scale and potential.

Temu is a cross-national e-commerce platform. Photo: baochinhphu.vn

Many people think that consumers paying on e-commerce platforms like Temu or other foreign platforms have to go through international intermediary channels, making it difficult to control cash flow and possibly losing tax revenue. What is your opinion on this issue?

First, we need to understand that it is impossible to ban cross-border e-commerce platforms in general and Chinese ones in particular from selling in Vietnam because this is the trend of the modern world and Vietnam is deeply integrating into the global economy.

The important thing here is that the State needs to have sanctions and solutions to control e-commerce platforms in a synchronous manner to ensure that activities on e-commerce platforms take place safely, effectively, transparently and in accordance with legal regulations.

When domestic buyers make purchases on international e-commerce platforms, including some e-commerce platforms from China, the cash flow for payment of orders will flow outside of Vietnam. What needs to be done is to control transactions and manage taxes strictly and effectively.

Faced with this situation, what do you think state management agencies need to do to minimize risks for domestic enterprises?

In my opinion, to minimize risks for domestic enterprises, especially small and medium enterprises in the context of foreign e-commerce platforms dominating, state management agencies need to introduce measures that have widespread and timely impacts, helping domestic enterprises feel secure in production and business, promoting sustainable development.

In particular, widely deploy programs initiated by the Party, the Fatherland Front, the Government, ministries, departments and branches, thereby propagating, promoting and honoring quality Vietnamese goods. For example, the program "Vietnamese people prioritize using Vietnamese goods"; trade promotion programs between regions to bring products from the place of production to consumers.

Provide many mechanisms, policies and programs to support businesses, especially small and medium enterprises, in accessing capital, training to improve capacity, digital transformation processes, encouraging innovation and helping businesses participate in the global value chain. In addition, it is necessary to provide a legal framework related to regulations of e-commerce platforms and policies related to consumer protection and the rights of domestic enterprises.

At the same time, strengthen management and supervision to prevent e-commerce platforms from trading in counterfeit, fake goods, and copyright infringement, which directly affects consumers and tax evasion. In recent times, a number of e-commerce platforms have introduced many policies to apply sanctions to suppliers trading in counterfeit, fake goods, and copyright infringement, but these policies are still not optimal when fraud still occurs on some e-commerce platforms.

It is necessary to build e-commerce infrastructure, perfect synchronous institutions, create a healthy, transparent and stable business environment to create trust for consumers as well as businesses.

With cheap goods entering the Vietnamese market through e-commerce platforms applying increasingly advanced and convenient technology, could you tell us how domestic enterprises need to improve to compete with cheap foreign goods?

In general, domestic small and medium enterprises currently have many limitations such as applying technology to production processes, marketing, product promotion, etc. Given the current situation of the Vietnamese market being flooded with cheap goods with diverse designs from abroad, domestic enterprises must self-assess their own strength, strengths, and weaknesses, thereby perfecting the process and production according to each planned roadmap and stage.

The important thing is to apply technology to optimize the production and business process, improve products, and diversify product designs to meet consumer needs. Research and develop niche products to create strengths for the business itself.

Strengthen trade promotion and investment cooperation; utilize and exploit social networking applications and multimedia communication channels to promote products on e-commerce platforms, thereby reaching and attracting customers.

At the same time, it is necessary to develop pre- and post-sales care services. This is an important issue to regain consumer confidence.

Thank you!

Source: https://congthuong.vn/truoc-suc-ep-hang-gia-re-tu-temu-doanh-nghiep-viet-lam-gi-de-giu-san-nha-355689.html