Vietnam e-commerce sustainable development solutions

Through studying the concepts of e-commerce as above, in a broad sense, commercial activities carried out through means of communication have existed for decades and reached billions of dollars in sales every day. In a narrow sense, e-commerce has only existed for a few years but has achieved very remarkable results. E-commerce only includes commercial activities conducted on open computer networks such as the Internet. In fact, it is the commercial activities through the Internet that gave rise to the term e-commerce.

In addition, e-commerce can be defined from different perspectives:

From an information perspective: E-commerce is the transfer of goods, services, information or payments via a computer system or by any other electronic means.

From a business perspective: E-commerce is the application of technology aimed at automating business transactions and work.

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From a service perspective: E-commerce is a tool used to meet the needs of companies, customers and managers to reduce costs of goods and services while improving the quality of goods and increasing the speed of service delivery.

From an online perspective: E-commerce provides the ability to buy and sell products and information on the Internet and online services.

From the perspective of cooperation: E-commerce is an environment for cooperation inside and outside the enterprise.

On the community side: E-commerce creates a place where community members can gather to learn, exchange and collaborate.

In short, e-commerce marks the beginning of a new system of creating material wealth. It is a great commercial opportunity for economic development. In Vietnam, e-commerce is being gradually applied by enterprises in their production and business activities.

1.4. Characteristics of e-commerce

 There is an exchange of goods, services, information and money over computer networks or other electronic means.

 Has the ability to cut costs and improve efficiency (speed) for the production and business processes of most organizations.

 Can be applied immediately to service industries (e-government, online training, tourism, consulting).

 As information and communications technology (ICT) infrastructure develops, the ability to connect and share information between businesses, suppliers, distributors and customers contributes to improving business efficiency.

 There is a relative distinction between e-commerce and e-business: e-commerce (narrow) focuses on buying and selling and exchanging goods, services, information via networks, electronic media and the Internet. e-business (narrow) focuses on coordinating businesses, partners, customers and organizing activities within the business based on the internal network.

 The development of e-commerce is closely linked to and interacts with the development of ICT. Thanks to the development of ICT, e-commerce was born. However, the development of e-commerce also promotes and opens up many areas of ICT such as hardware and software specialized for e-commerce applications and electronic payments.

1.5. Forms of e-commerce:

Based on the subjects participating in e-commerce: Government (G), Enterprises (B), Individual customers (C), there are the following main forms: B2B, B2C, B2G, C2C, C2G, G2G.

a. B2B: Is the transaction of buying and selling goods and services between businesses in the production and business process. B2B helps businesses save costs and bring higher profits. Businesses choose better inputs, change products and designs faster and bring goods to market faster. In B2B transactions, websites appear to help businesses buy and sell goods; forming electronic trading floors. Trading floors perform added values such as providing information to businesses, organizing seminars, providing market research. Trading floors can be organized as associations that allow businesses to be admitted as members who pay a certain membership fee to maintain the floor. This form is used

most in e-commerce. According to statistics, in 2002 B2B accounted for 83% of e-commerce sales, in 2006 about 88%. 1.

b. B2C:

Type of transaction between businesses and consumers. Consumers buy goods directly from businesses and businesses conduct online retail. A typical example is www.amazon.com . B2C transactions do not stop at online retail but also expand to service activities such as information, banking, auctions, real estate, tourism. Many virtual supermarkets appear to sell goods and services. The B2C form is increasingly being noticed and invested in by businesses. Different from B2B in that: prices are fixed and there is no negotiation. Businesses only need to build an electronic catalog system, a browser system that makes it easy for customers to find products, and find a fast and effective delivery solution to customers.

c. B2G:

Type of transaction between enterprises and government. Government agencies conduct online shopping like consumers. Enterprises submit reports, customs declarations, and business registration licenses online through public services provided by government agencies. This transaction depends on the government's economic development strategy, recognizing the importance and determination to apply IT to macro-management activities, promoting e-commerce development.

d. C2G:

Type of transaction between consumers and the government. Providing policy information, paying pensions, answering questions, resolving civil transactions, applying for business licenses... for which government agencies want to use e-commerce as a means. This transaction is related to the process of building e-government.

e. C2C:

1 Source: Vietnam E-commerce Report 2005

Transactions between consumers who need to buy and sell goods and services that they own. For example, organizing online auctions, civil transactions such as finding a job, renting a house...

f. G2G:

Transactions between government agencies, between different levels of industry to exchange information to serve the work of operation, macro management as well as to check and control the activities of enterprises in accordance with the law. For example: statistical reports, import-export reports, taxes, budget expenditures. These transactions are part of e-government.

In addition, based on network connection technology, there are also other specific types of e-commerce services such as: Mobile commerce, Online entertainment services (especially online games).

1.6. Benefits and limitations of e-commerce

1.6.1. Benefits of e-commerce

a. Benefits for organizations

Expand your market with much lower investment costs than traditional commerce

Promote information and marketing to a global market at extremely low cost: Reduce paperwork costs, administrative management costs, business registration costs...

Improve distribution systems, reduce inventory and delivery delays, and increase speed to market.

Better service for customers, can update and provide catalogs, brochures, information, price lists to customers extremely quickly, create conditions for customers to buy directly online, etc.

Help establish and strengthen partnerships

Increase revenue

Create competitive advantage through product and service differentiation

Simplify administrative procedures and paperwork, increase the efficiency of commercial transactions.

Product information and prices are updated and changed instantly according to market fluctuations.

In short, e-commerce is really an opportunity for businesses in Vietnam. Vietnamese businesses should think about applying e-commerce to increase their competitive advantage, before the threshold of world economic integration.

b. Benefits for consumers

 Eliminate barriers of space and time: Customers can participate in online auctions, buy and sell and search for items of interest anytime, anywhere in the world.

 Wide choice of products and services: Buyers can access many suppliers at the same time.

 Have the opportunity to buy products and services directly from the manufacturer or main supplier without intermediaries

 Lower prices: Due to more convenient, easier and richer information, customers can compare prices between suppliers more conveniently and thereby find the most suitable price.

 Richer, more convenient and higher quality information: Customers can easily find information quickly through search engines with more realistic images and sounds.

 Enjoy many benefits from online community: The e-business environment allows everyone involved to coordinate, share information and experience effectively and quickly.

 Tax exemption: In the early stages of e-commerce, many countries encouraged by exempting taxes on online transactions.

In short, consumers truly become the owners with full authority to choose products, search for any information about products according to their needs, and compare.

Price, order with automatic calculation system, complete, clear, honest and most accurate.

c. Benefits for the country:

 Create new working and business styles

 Improve living standards: Many goods and many suppliers create pressure to reduce prices. Therefore, customers' purchasing power is higher, improving people's living standards.

 Benefits for poor countries: Poor countries can access products and services from more developed countries through the Internet and e-commerce. At the same time, they have the opportunity to learn and absorb experiences from advanced countries.

 Creating conditions for early access to the knowledge economy: E-commerce stimulates the development of information technology, data mining and knowledge discovery.

 Public services are provided more conveniently, creating motivation for reform for state agencies.

1.6.2. Limitations of e-commerce

There are two types of limitations of e-commerce, one group is technical, one group is commercial.

a. Technical limitations:

 International standards on quality, safety and reliability are not adequate, creating hesitation for businesses when participating in e-commerce.

 Internet connection speed still does not meet the requirements. Sometimes the slow processing speed of the connection causes impatience for users.

 Software development tools are still in the development stage.

 Difficulty in combining e-commerce software with application software and traditional databases.

 To have special e-commerce servers (capacity, security) requires additional investment costs.

 The cost of Internet access is still high.

 Fulfilling orders in B2C e-commerce requires large automated warehouse systems.

b. Trade restrictions:

 Security and privacy are two psychological barriers for e-commerce participants.

 Lack of trust in e-commerce and e-commerce sellers due to lack of face-to-face interaction. Many consumers are still somewhat hesitant to send credit card numbers and personal information over the Internet.

 Many issues regarding laws, policies and taxes have not been clarified.

 Some policies have not really supported and created conditions for e-commerce to develop.

 Methods for evaluating the effectiveness of e-commerce are still incomplete and imperfect.

 Changing consumer habits from real to virtual takes time. Most consumers still prefer to directly contact goods rather than view them online because of psychological safety.

 Trust in a paperless, contactless, electronic business environment takes time.

 The number of participants is not large enough to achieve economies of scale (break even and make a profit). The participants of e-commerce are limited to the intellectual and high-income groups.

 The number of frauds is increasing due to the nature of e-commerce. For the environment

E-commerce is a virtual environment so it is difficult to control illegal database intrusion, information theft, credit card fraud...

 Attracting venture capital has become more difficult after the collapse of dot.com companies.

1.7. E-commerce business process

1.7.1. Conditions for applying e-commerce

Depending on the industry, e-commerce can be applied. E-commerce is usually very suitable for intellectual industries, especially products or services that can be digitized or displayed digitally. In general, e-commerce can be applied to most businesses, but depending on the business items, it can be applied at the appropriate stage.

If a business plans to conduct e-commerce, it must carefully prepare the following aspects:

 Business idea: businesses must answer the questions "what will I sell", "where will my revenue come from"?

 Risk assessment: after having the above answers, the business must observe whether anyone has done it? Were they successful? And must analyze the risks for its project, in the worst case, what will happen? Can the business accept or tolerate the worst risk?...

 Finding investment sources: Finally, if the business still finds its project feasible, it must find the necessary capital to cover the project during the time it is not yet profitable.

Such careful preparation is the first step to ensuring business success in this field.

Goods that sell well online:

 Items such as CDs, books

 Products that appeal to enthusiasts (cooking utensils, sports memorabilia)

 Services that require little contact (travel services, online shopping)

 Goods purchased regularly (production components, stationery)

 Technology products (software, computers)

 Hard-to-find items (out-of-print publications, rare stamps)

Goods that are difficult to sell online:

 Products that are difficult to transport (wooden furniture)

 Services that focus on a local market (hair salons)

 Strictly regulated goods (explosives)