Vietnam is becoming a new “battleground” for e-commerce giants such as Amazon and Alibaba.
With sales projected to reach 10 billion USD in 2025, the e-commerce market in Vietnam (VN) is considered a gold mine of both domestic and foreign enterprises.
For this reason, Amazon of billionaire Jeff Bezos (USA) has just officially announced to set foot in Vietnam market. This move is expected to spark a fierce market share battle between East-West e-commerce giants. However, to win the game when there were stunned opponents like Alibaba’s billionaire Jack Ma (China) is not easy.
The giants competed
According to Dr. Simon Baptist, economist and managing director of the Asia region of Economist Intelligence Unit, Amazon’s entry into Vietnam because of the difficult attraction of this market. Accordingly, Vietnam is one of the fastest growing economies in the region. It is expected that Vietnam will increase 18 million middle-class households in the period of 2017-2030, of which more than 30% of this increase will come from Hanoi and Ho Chi Minh City.
Gã khổng lồ bán lẻ Alibaba của tỉ phú Jack Ma (phải) sẽ đối đầu với Amazon của tỉ phú Jeff Bezos tại thị trường Việt Nam. Ảnh: TL.
“Besides, Vietnam has a young population who is proficient in technology and has formed a trend of buying goods online, as well as a rising income base. Not to mention that Vietnam is trying to promote the non-cash economy, the goal of 2020 is to have 50% of urban households using electronic payment for daily transactions,” Dr. Simon Baptist. said.
Mr. Nguyen Thanh Hung, Chairman of Vietnam E-commerce Association (VECOM), assessed the participation of online giants in the world of Amazon, making Vietnam e-commerce market more and more fierce and fierce competition.
“The market has strongly differentiated with the leading group leading the market such as Lazada, Tiki, Shopee, Adayroi, … shaping their own game but it does not mean that other units do not have a chance to break through” – Mr. Hung identify.
The representative of Vietnam E-commerce Association also stated that Amazon will surely face many difficulties when entering the Vietnamese market. The reason is that before Amazon there were many formidable opponents in e-commerce in the world jumping into Vietnam. For example, Alibaba has spent $ 1 billion to acquire top online shopping channel Lazada, currently operating in Singapore, Malaysia, Thailand, Philippines, Indonesia and Vietnam.
Garment, leather shoes, … benefit
“Vietnam has advantages in commodities such as household items, garments, leather shoes, and crafts … which are items that can sell very well on Amazon. We value Vietnam as one of Southeast Asia’s leading potential countries to export goods through Amazon.” Mr. Bernard Tay – Amazon Regional Director for Southeast Asia
According to Lazada, this unit has 155,000 merchants and 3,000 brands serving 560 million consumers in the region. Lazada brings together more than 300 million products of various categories from electronics to household goods, toys, fashion, sports equipment.
Similarly, Chinese giant Tencent entered Vietnam market with Shopee trade page. Another name that is famous in e-commerce village is Tiki, which has received investment funds both domestically and abroad.
In addition, other names such as Adayroi of Vingroup may be included, the only unit that does not receive any foreign capital but with the ownership of a nationwide retail chain that can put significant pressure on the other giants.
The match is inconclusive
According to the general judgment of the business community, although there are many participating units, in terms of financial resources, logistics and technology, in the race on the e-commerce market, Vietnam is really only for two big rivals, Alibaba and Amazon. Both are top giants in the world market.
In order to capture the Vietnamese market, every big man has a specific strategy. Mr. Zhang YiXing, General Director of Lazada VN, affirmed that with his logistics service network, Lazada creates favorable conditions for businesses to easily transport goods across countries, can provide goods to customers. goods anywhere.
“In Vietnam, we are applying the free transportation policy in the region 0 VND for eight main cities and also completing the infrastructure to expand this area of 0 VND. Our goal is to provide a great shopping experience, ”Zhang said.
Meanwhile, representatives of Amazon announced that there will be skills training programs for sellers to know how to design eye-catching booths, bringing the most effective information, the most attractive image to Amazon. Not only that, this unit also helps Vietnamese enterprises overcome language barriers by launching Vietnamese guide page and fanpage in Vietnamese on Facebook. Thereby helping businesses and retailers can create accounts on Amazon easier. In fact, through Amazon, a lot of domestic products are known to consumers in the world such as coffee making, Sao Vang, Trung Nguyen coffee, conical hats, sport hats, …
According to market research firm Nielsen, to win market success, businesses not only use price strategy but also apply new technologies such as cloud computing, big data to thrive e-commerce.
Looking at this perspective, the race between Amazon and Alibaba on the Vietnamese market will be dramatic and do not know who can win but first of all consumers and businesses will benefit. For example, a day not far from Vietnam will have many items delivered by unmanned aircraft and consumers will receive products only a few hours after ordering.
Challenge with the Amazon giant
Currently Amazon has only signed a cooperation agreement to bring Vietnamese products to reach their customers globally. Dr. Simon Baptist sees that Amazon will face challenges in logistics services, although being improved, Vietnam’s infrastructure is still inadequate and moving between provinces and cities is still expensive. The road network, as well as the retail and distribution network, has become one of the major challenges for e-commerce businesses.
However, Amazon has another strength that is building trust with the middle class spending more on high value items. “Vietnamese merchants often trade on Amazon international sites to bring about business in Vietnam as a proof for this” – Mr. Simon Baptist cited.