Factors determining the success of B2C e-commerce in Vietnam

4.2.6 E-commerce Strategy

To be successful in any type of business, business strategy is the key factor that determines the success or failure of the business, is the compass of the business boat to achieve success, depending on the product and service, each strategy is applied or combined together to achieve the highest efficiency, e-commerce is no exception to that rule. According to the sharing of Respondent QL1, LAZADA's goals mainly focus on 4 main goals: Effective Marketing, Dedicated Customer Service, Convenience, High Quality and specific selection:

Effective Marketing Strategy: We know how to combine offline and online marketing so that the website can reach closer and wider to the target audience. We pay special attention to exploiting the abundant potential of online tools such as online banners, SEO, SEM, Google ads and social networks such as Facebook, Twitter, LinkedIn.

Dedicated customer service: LAZADA builds an effective customer service with a hotline and live chat system on the website to answer all questions and complaints about products and promotions quickly and completely.

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Convenience: We bring optimal convenience to customers with a friendly, easy-to-use website interface; free nationwide delivery service; 30-day return policy and cash on delivery payment.

Premium quality and selection: products at LAZADA are always of guaranteed quality, supplied by more than 300 reputable brands and have passed our rigorous quality control process.

According to the interview of LAZADA Representative on Info TV:

LAZADA is an e-commerce business unit, we set two main goals which are to create convenience and competitive prices to bring many benefits to

online consumers, to achieve these two goals we provide many utilities such as post-payment, when customers receive the goods they have to pay, allowing customers to return goods within 14 days and free shipping nationwide, all of these utilities bring customers maximum convenience when shopping online, to achieve these goals we use all online channels such as: Banner advertising, participating in social media such as Zing and Facebook, and also participating in Optimize search programs (SEO, SEM) so that customers can find us (Info TV, 2012).

Mr. Nguyen Thanh Van An, CEO of HOTDEAL, believes that the cooperation with Transcosmos will help the company capture larger and more international markets, where customers will experience shopping services as well as products with the best quality (Cafef, 2015).

Alliance strategy

With the above sharing and through the business model, it shows that the strategic orientation of HOTDEAL, LAZADA, SCJ and VINABOOK always focuses on customers, effectively using the alliance strategy in business activities through combining with partners and suppliers who do not have or do not have background experience in IT as well as e-commerce knowledge, helping the company to diversify products of many brands, thereby creating convenience for customers in purchasing related products. On the other hand, HOTDEAL, LAZADA, SCJ and VINABOOK also carry out affiliate programs with banks and organizations with special incentive programs for customers and employees of that organization. With this alliance strategy, businesses can effectively carry out promotional activities, saving costs in marketing activities, increasing sales, and moreover, by combining with fast delivery companies, businesses can save a lot of costs in logistics transportation when businesses do not have enough experience in implementing cash on delivery with a 24-hour delivery program. With this strategy, businesses can be pioneers in bringing convenience to consumers.

Affiliate Marketing Strategy

The effective marketing strategies of HOTDEAL, LAZADA, SCJ and VINABOOK are once again demonstrated through choosing the right channels for promotion, mainly focusing on online advertising through the form of Google, Facebook, Zing advertising networks and even advertising cooperation programs with partners such as other large websites with the form of selling products with commission to create coverage to the right customer target, which helps businesses save a lot of costs in marketing activities. Moreover, HOTDEAL, LAZADA, SCJ and VINABOOK have done very well in attracting members and maintaining customers with preferential programs for members according to the sharing of Respondent QH2:

We always have incentive programs for new members by giving shopping vouchers and special incentive programs for members such as vouchers, points to receive gifts, member discount weeks, so our customers are mainly members, accounting for a high proportion of HOTDEAL sales.

Promotional discount strategy

HOTDEAL, LAZADA, SCJ and VINABOOK also skillfully apply the discount promotion strategy to hit the Vietnamese people's psychology of liking to buy promotional products with limited quantity and certain time promotions. This partly helps businesses increase their marketing effectiveness to attract customers, the number of members registered on the website and at the same time take advantage of special offers from product suppliers in large quantities. This strategy has been continuously implemented by four businesses with different product lines, creating a special attraction in providing products and benefits to consumers.

Product portfolio centralization strategy

VINABOOK uses a centralized strategy in its business operations, instead of gathering all types of products like Tiki.vn or

Some other websites, VINABOOK focuses specifically on book and magazine products, this strategy helps VINABOOK focus and do well on its customer segment, affirming its brand in the minds of customers as a business providing the number one online book products today.

LAZADA's goods come from many different brands. In Asia, LAZADA was present in Singapore and Malaysia before coming to Vietnam, so it has many partners who are big brands here. Therefore, in the early stages, some goods were sent from branches in Malaysia and Singapore. However, LAZADA now has many partners in Vietnam such as Bo Sua, Thuy by TDH, Le Nhu to diversify the choices and "taste" of each person's clothes. Especially famous brands such as Nike, Puma, Maschino are present on LAZADA. This helps LAZADA to meet the diverse needs of each customer. This shows that the product strategy is also used by LAZADA by focusing on product lines specializing in fashion and electronics, but on the other hand, selecting products that already have brands on the market (Respondent QL2).

QS2 respondent said:

The purchasing needs of consumers, mostly housewives and office workers, are changing and becoming more diverse. “After surveying customer opinions, in addition to traditional products such as electronics and household appliances, SCJ TV Shopping is testing the sale of products such as functional foods, packaged foods, milk, diapers, baby shampoo, etc.”

SCJ also sells cosmetics, fitness equipment, and products for the elderly such as blood pressure and blood glucose monitors. Revenue from these additional products contributes about 30% of SCJ's total revenue, QS2 respondent added.

4.2.7 Cultural factors

Vietnamese shopping culture

Vietnamese shopping culture is shared by QS2 Respondent as a major obstacle in SCJ's e-commerce business activities. This obstacle belongs to the habits of Vietnamese consumers, according to QS2 Respondent:

The lifestyle and work of the majority of people are still used to transactions on paper documents, buying goods must go through the process of seeing, touching, tasting, testing, and are used to using cash to pay with traditional forms of buying and selling.

In fact, not only SCJ but also other e-commerce businesses face difficulties from this shopping habit, because the traditional form of shopping has existed and developed in our country for a long time and the form of online shopping has only recently been formed in Vietnam. This issue is further clarified through the discussion with Respondent QH1 about the difficulties of HOTDEAL in online fashion business activities in Vietnam:

Our problem now is the consumer's shopping habits in purchasing fashion products, because the traditional form of fashion brands has done quite well.

According to Respondent QH1:

The traditional form of fashion shopping at supermarkets or stores is preferred by consumers today for other reasons, such as experiencing the product before buying and the relaxation of consumers. Customers can try the actual product that suits them at supermarkets or stores. Moreover, choosing to go shopping at supermarkets or stores is also a form of relaxation for them after working days. This partly explains the preference of Vietnamese consumers today compared to online shopping.

The direct shopping habits of Vietnamese consumers were commented by Mr. Nguyen Hoa Binh - General Director of Ebay Vietnam on Saigon Economic Times:

The habit of direct transactions makes e-commerce underdeveloped, which is also due to the feeling that online transactions are full of risks and fraud (Saigon Economic Times, 2010).

Once again, we see that direct shopping habits as well as shopping culture directly impact e-commerce business activities, impacting the success of businesses in Vietnam.

Regional culture

Regional culture is also a factor that affects the company's strategy. In each different region, consumers will have different characteristics, so each business needs to have a suitable strategy to meet the needs of customers in each region. Respondent QL1 affirmed that this factor affects LAZADA's marketing strategy during the period of market expansion. However, according to Respondent QL1, LAZADA's current marketing strategy does not clearly define each separate region but is applied to the two major cities of Ho Chi Minh City and Hanoi.

The impact of regional culture on business activities has been studied by Nielsen market research company and found differences in consumer behavior and shopping habits in two regions in Vietnam. The study mentioned the level of collective and individual influence on shopping, the level of influence of advertising and promotion, individual shopping plans as well as consumer tastes. This once again shows that regional culture has a profound influence on consumer habits and behavior, affecting the development of e-commerce business of enterprises in different regions.

4.2.8 External factors

Internet usage costs

Internet usage costs include: Internet fees and Internet access equipment, which Respondent QL2 said is not a concern for LAZADA as the company is focusing on developing in Ho Chi Minh City. According to Respondent QL2:

Although Internet usage fees and access devices are essential conditions that each customer needs to have to make a purchase on LAZADA, because LAZADA's target customers are in Ho Chi Minh City and other major cities, the impact of Internet usage fees on LAZADA's business operations is insignificant.

In another exchange, Respondent QH2 also commented that:

HOTDEAL's target market is currently mainly in Ho Chi Minh City and HOTDEAL's customers are office workers who regularly access the Internet.

HOTDEAL's target customers are customers with average income or higher, so the cost of using the Internet for customers is really insignificant, it does not affect HOTDEAL's business activities (Respondent QH2).

According to Dr. Mai Liem Truc at the online discussion - exchange "Internet - the door to the future" (Nhan Dan Newspaper, 2012) held on November 30, 2012, it was stated that Vietnam's Internet usage fee is among the cheapest in the world, according to the Price Management Department of the Telecommunications Department, during the increase in 3G usage fee of the three major networks, although the highest package increased by 40%, the adjusted fee still only accounted for less than 60% of the service cost. In addition, compared to the international level, Vietnam's price area is still only 30% -40% when compared to the national income per capita in the world, the region and ASEAN. On the other hand, according to Deputy Minister of Information and Communications Le Nam Thang, the impact after adjusting the 3G fee increase is not much because the users of Internet access devices all have

High income, most smartphone and tablet users are affected after the adjustment, but these are usually customers with good income in society (Nhan Dan Newspaper, 2012).

The above shares show that the impact of Internet usage costs on e-commerce business activities in big cities in Vietnam is insignificant, especially not affecting much the number of customers with average income or higher.

Business competition pressure

When referring to the competitive pressure of domestic e-commerce enterprises on VINABOOK. Respondent QV1 commented that:

VINABOOK has many competitors starting to deploy e-commerce in the online book sales industry such as: tiki.vn, saharavn.com, nhasachphuongnam.com, sachgiamgia.vn, this creates a lot of competitive pressure for VINABOOK, although VINABOOK is the leading company in the industry in providing online book products, but VINABOOK will try to hold market share. Although we are currently leading the market, we must continuously improve to quickly meet customer needs to maintain market share because e-commerce changes very quickly over time.

Respondent QV1 also added:

VINABOOK has advantages and benefits that traditional businesses do when implementing e-commerce such as Minh Khai bookstore, FAHASA bookstore or Nguyen Van Cu bookstore in combining e-commerce implementation in Vietnam, especially in the current period when consumers still do not trust the quality of goods and services.

HOTDEAL is currently one of the leading companies in the Groupon business field, however, HOTDEAL is currently facing fierce competition from rival companies such as NHOMMUA, MUACHUNG, CUNGMUA, SIEUMUA (Respondent QH1).

Factors determining the success of B2C e-commerce in Vietnam - 13

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