E-commerce - a driving force for small and medium enterprises to improve productivity

E-commerce is opening up huge opportunities, helping small and medium-sized businesses save costs, expand markets and improve productivity.

In the context of a rapidly developing digital economy , e-commerce has become an important driving force for the development of small and medium-sized enterprises (SMEs). This is not only a new sales channel but also a tool to improve productivity, optimize processes and enhance competitiveness. With the support of technology, SMEs can reach global customers, reduce operating costs and increase production and business efficiency.

One of the most obvious impacts of e-commerce is the ability to expand the market beyond traditional geographical limits. Previously, SMEs were often limited by local sales scope, the cost of opening a store or building a large distribution network. However, thanks to the online platform, with just one store on the e-commerce platform or its own website, businesses can reach millions of domestic and international customers. This not only increases the number of orders but also improves resource utilization, because with the same staff, revenue can be many times higher than traditional channels.

E-commerce also helps to significantly reduce operating costs. The application of software for warehouse management, orders, online payments and connection with shipping units helps to save time and human resources. Manual steps such as bookkeeping, order confirmation, and cash collection are replaced by automated processes. Businesses both save costs and reduce errors, thereby improving labor productivity. In addition, storing and analyzing online sales data also helps SMEs make more accurate decisions, avoiding wasting resources.

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Another strength of e-commerce is the ability to measure and control performance. Indicators such as conversion rates, cancellation rates, delivery times, and customer satisfaction are updated in real time. SMEs can rely on this data to improve products, services, and processes. With better management, productivity goes beyond the number of orders to reflect the quality of service and customer satisfaction.

The positive impact of e-commerce on business productivity has been proven. A study in Iran in the manufacturing industry showed that businesses that applied e-commerce and online promotion achieved significantly higher overall productivity than traditional businesses.

In Vietnam, the online retail market in 2024 exceeded the 25 billion USD mark, an increase of about 20% compared to the previous year, with the strong participation of SMEs. Many small businesses have taken advantage of the export channel through cross-border e-commerce, thereby overcoming traditional distribution barriers and expanding international markets. This is an opportunity for SMEs to improve productivity, not only domestically but also globally.

Another important benefit is that e-commerce helps businesses adapt flexibly to fluctuations. When the Covid-19 pandemic broke out, many traditional retail businesses struggled, while businesses that had transitioned online early were able to maintain operations and even thrive. This adaptability is a core factor that helps SMEs improve long-term productivity, as they can maintain cash flow and resources during uncertain times.

However, it is undeniable that there are still barriers that prevent SMEs from fully exploiting the potential of e-commerce. The increasing cost of online advertising and fierce competition with large enterprises with abundant budgets make it difficult for many small businesses to make their mark.

In reality, in Vietnam, there are many stores on e-commerce platforms that have almost no orders due to lack of knowledge about digital marketing and online sales strategies. In addition, the electronic payment and logistics infrastructure is not synchronized, especially in remote areas, causing the operating costs of SMEs to increase. These are factors that hinder productivity, and if not resolved, the benefits of e-commerce will be difficult to maximize.

For e-commerce to truly become a driving force for improving productivity and quality, SMEs need to proactively invest in digital skills training for their staff, apply online management tools and build a reputable brand in the digital environment. On the State side, it is necessary to continue to improve payment and logistics infrastructure, create a fair competitive environment and have policies to support SMEs to participate in exporting via e-commerce. When both businesses and policies go hand in hand, SMEs' productivity will be improved sustainably, creating momentum for the economy.

E-commerce is not just a new sales channel but has become a core strategy to help small and medium enterprises improve their operational efficiency. With huge market potential, technology support and appropriate policies, e-commerce will certainly continue to be a strong driving force for SMEs' productivity in the coming time, contributing to promoting comprehensive and sustainable economic growth.

According to VietQ

Source: https://mst.gov.vn/thuong-mai-dien-tu-luc-day-cho-doanh-nghiep-nho-va-vua-nang-cao-nang-suat-197251121084242182.htm