Local firms must increase competitiveness to cope with foreign rivals in the domestic market

A wave of cheap goods on Chinese e-commerce platforms, such as Taobao, 1688, Shein and Temu, has forced Vietnamese businesses to adapt.

A wave of cheap goods on Chinese e-commerce platforms, such as Taobao, 1688, Shein and Temu, has forced Vietnamese businesses to enhance their competitiveness in the domestic market.

The latest platform to come into Việt Nam in early October was Temu - the international version of online retailer Pinduoduo, China's second largest e-commerce platform.

Products at Temu are sold at very low prices, with many promotional packages, so the platform has already proved popular with many Vietnamese customers.

One of the highlights of these platforms is the competitive prices, leaving domestic businesses facing stiff competition with the storm of cheap goods.

Đỗ Hữu Hưng, CEO of Accesstrade Vietnam Company, said that those e-commerce platforms bring shopping opportunities for local consumers, but also create challenges for domestic production and business enterprises in the long term.

That forces the domestic manufacturers to improve the quality of goods and promote investment in logistics, Hưng said.

Nguyễn Thị Châu, director of V.N.F Garment Company based in HCM City, said that China e-commerce platforms sell goods directly from the factory to customers, cutting more than 50 per cent off the intermediary stage, meaning the selling price will be much cheaper than the price in the store.

Therefore, on the domestic market, those making local goods or importing from other countries, face more difficulties in competing with Chinese products. In addition to price, the goods should be safe and of good quality, but it would be hard to offer such extremely cheap prices and also high quality.

The development of cross-border e-commerce is an inevitable trend, so the Vietnamese e-commerce market will be even more fierce. However, to ensure the sustainable development of domestic enterprises, appropriate protection measures are needed.

According to a representative of the Vietnam Logistics Service Enterprise Association, to cope with the influx of cheap Chinese goods into Việt Nam, Vietnamese enterprises need to focus on product quality and after-sales services, while improving the logistics system to reduce costs and increase competitiveness.

HCM City Department of Industry and Trade has also requested the Ministry of Industry and Trade to prevent and strictly handle violations, including applying sanctions, or suspending operations for the platforms having many violations.

The department has also proposed to strengthen the inspection of regulatory compliance of international e-commerce platforms, creating a fair competitive environment for Vietnamese companies.

In addition, it is also necessary to issue regulations on tariffs and customs procedures for imported goods through e-commerce platforms. This is to ensure benefits for the national budget and create fairness for domestic enterprises.

Hưng added that the competition situation at present is an opportunity for Vietnamese enterprises to build brands, produce goods that are competitive enough to sell on e-commerce platforms and increase sold goods when taking advantage of opportunities from cross-border e-commerce.

At the same time, if choosing a low-cost strategy, businesses must change production to optimise costs and prioritise local raw materials.

Nguyễn Bình Minh, executive committee member of the Vietnam E-commerce Association, recommended that authorities need to create a legal corridor to strictly manage cross-border e-commerce activities.

They should strengthen inspection and supervision to prevent counterfeit goods, fake goods and tax evasion through e-commerce to protect consumer rights and ensure fairness for domestic businesses.

Recently, Minister of Industry and Trade Nguyễn Hồng Diên directed agencies under the ministry to strengthen State management of e-commerce.

Specifically, the Department of E-commerce and Digital Economy is required to coordinate with relevant agencies to strengthen communication and guide consumers to be cautious when shopping online on cross-border e-commerce platforms.

Customers are being warned not to conduct transactions with platforms that have not been confirmed by the Ministry of Industry and Trade and register at the E-commerce Management Portal.

In October, the ministry reported to the Prime Minister its proposals that the Ministry of Finance needs to study a plan on monitoring and managing imported goods via e-commerce platforms that do not comply with Việt Nam's laws and regulations.

The General Department of Market Management has also been asked to coordinate with the General Department of Customs and relevant agencies to strengthen supervision for detecting and handling of warehouses of cross-border e-commerce platforms that have not been granted licences to operate.