Cross-border e-commerce

This is considered an important “lever” for Vietnamese goods in the coming time. However, effectively exploiting this modern business channel is not simple.

Vietnamese goods exported to the US, earning tens of millions of USD

The journey to conquer the US market of a bed frame manufacturer in Binh Duong has become a typical case of Vietnamese products knowing how to exploit business advantages on cross-border e-commerce platforms.

According to Mr. Nguyen Anh Tuan, Training Director of Anneco Group, who has supported Chinese businesses to enter the US market for many years, this business used to sell products in the international market many years ago, but in 2020, due to the impact of the COVID-19 pandemic, social distancing had to be implemented. Many international partners could not come directly to Vietnam to see the goods, so they could not export goods in the traditional way.

During this period, many businesses and entrepreneurs in Vietnam from many different industries are looking for online business opportunities when their previous daily work has been temporarily suspended and their revenue has decreased. Cross-border e-commerce platforms such as Amazon have become a “savior” to help businesses solve the “problem” of too much inventory when the supply chain is broken.

Realizing that trend, bed frame manufacturers in Binh Duong also sought to open new sales channels on Amazon, although many people believe that exported furniture products are usually just compact items, and cannot export rather bulky bed frames.

After searching through the sea of information on the internet and creating groups to sell products on their own, after a year, this business was still struggling to find a way to get on the Amazon cross-border e-commerce platform. Sometimes, they were confused about which direction to take when there were "9 people with 10 different opinions" online.

Things changed for the better when the business leaders connected with Anneco. Through preliminary assessment, Anneco determined that with bed frame products not being convenient for logistics, despite many years of international sales experience, the business leaders still needed to change their sales mindset.

Anneco helps businesses systematically carry out specific activities, from market research, to product preparation, sales advertising... To solve the problem of transportation, the idea of packing bed frames into neat boxes has been implemented.

After the first orders, some problems arose such as: products were defective during transportation from Vietnam to the US; Some products were not suitable for American consumers because the bed frame design was intended for Vietnamese people with an average weight of 60 - 70 kg, while many Americans weigh up to 100 kg; there were no accessories included so that customers could easily replace and disassemble.

To overcome the above problems, Binh Duong enterprises have added notes on the maximum weight that the product can withstand; give away a tool kit for customers to disassemble and assemble themselves; have a video instructing on disassembly and assembly... At the same time, the goods are packed more neatly and securely to minimize errors during transportation.

As the number of orders from the US increases, businesses expand production, diversify products, and create brands to sell on Amazon. Along with that, they also deploy a number of other online channels such as creating their own websites, participating in e-commerce platforms, etc. to take advantage of a warehouse in the US.

After 3 years of doing business on Amazon, the revenue from the US market of the bed frame manufacturing enterprise in Binh Duong increased from 2 million USD in 2020 to 8 million USD in 2021 and 15 million USD in 2022 (not to mention 5 million USD from other channels); becoming a favorite bed frame brand on Amazon, starting to have a brand in the US market.

Opportunities come with challenges

Mr. Nguyen Van Thanh, Director of the Center for E-commerce Development (Department of E-commerce and Digital Economy, Ministry of Industry and Trade ) commented that cross-border e-commerce is a booming trend in many countries. Vietnam is no exception, as cross-border e-commerce is considered a field with great potential, in line with the digital economy development policy set forth by the Government.

Mr. Nguyen Van Thanh, Director of the Center for E-commerce Development, spoke at the workshop held on August 10 in Hanoi.

With a growth rate of 20% per year, Vietnam is ranked among the top 5 countries with the highest e-commerce growth rate in the world. In the cross-border e-commerce platform Amazon alone, the export value of Vietnamese enterprises increased by more than 45% in 2022 compared to the previous year; the total export turnover of Vietnamese enterprises through Amazon increased by 45%; the number of enterprises participating in Amazon also increased by 80%.

The profile of participating businesses has become more diverse with the appearance of traditional manufacturers such as Lafooco cashew nuts, Sunhouse household appliances, Royal Helmet helmets... Startups have also begun to invest more systematically and seriously, instead of just considering this as a "surfing" game.

According to the report “Local Sellers, Global Consumers 2022: Seizing the Opportunity of E-Commerce Exports in Vietnam” conducted by Access Partnership Consulting Company, it is estimated that in 2022, Vietnam's e-commerce export value will reach about VND80,000 billion; it is expected that Vietnam's e-commerce export turnover can reach nearly VND300,000 billion by 2027 if domestic enterprises are supported.

In order to support Vietnamese businesses in bringing more Vietnamese goods to the world market through the Amazon e-commerce platform, recently, the Department of E-commerce and Digital Economy (Ministry of Industry and Trade) and Amazon Global Selling have implemented the Initiative "Cross-border e-commerce: Breakthrough era" (signed on June 8, 2022).

In 2022, Amazon Global Selling and the Department of E-commerce and Digital Economy coordinated with local partners to organize 9 training courses, attracting the participation of 1,300 businesses.

In 2023, Amazon Global Selling and the Vietnam E-commerce and Digital Economy Agency will continue to coordinate to organize a number of conferences on cross-border e-commerce with the theme "Asian Essence - Global Breakthrough" in Hanoi and Ho Chi Minh City.

The Department of E-commerce and Digital Economy and Amazon Global Selling said that in the coming time, they will continue to organize training courses and practical activities to improve skills for Vietnamese businesses to confidently participate in cross-border e-commerce effectively.

A series of events with topics focusing on potential industries such as wood, furniture, textiles, seafood, etc. have been, are and will be held to share success stories and specific experiences so that Vietnamese businesses do not repeat the same mistakes.

With many years of experience working with businesses, Mr. Nguyen Anh Tuan noted that, in addition to great opportunities for revenue growth, Vietnamese businesses must also correctly assess the current situation of many difficulties when exporting through e-commerce channels.

Vietnamese businesses selling on cross-border e-commerce platforms face many barriers. For example, paperwork and legal procedures in international import and export. The US, Europe, Japan, etc. are very demanding markets, requiring Vietnamese businesses to meet many types of paperwork. In reality, not all businesses have these types of paperwork available.

Or about financial resources, human resources. To do business on a cross-border e-commerce platform, businesses need to have a professional team, but many businesses do not have this team. In addition, the lack of investment capital for e-commerce channels alone, many Vietnamese businesses miss out on attractive orders.

According to Ms. Do Hong Hanh, Director of Strategic Partnerships of Amazon Global Selling Vietnam, there are currently a number of Vietnamese product categories that are popular on Amazon such as: home decoration; blankets, mattresses, bed sheets; interior decoration; kitchen utensils...

“ Vietnamese businesses should focus on strong products that suit the tastes of international consumers, especially products of natural origin combined with the sophistication and ingenuity of Vietnamese artisans ,” Ms. Hanh recommended.

Sharing the “secret” to successful business on Amazon, Ms. Pham Ngoc Anh, Senior Account Manager of Amazon Global Selling Vietnam, especially emphasized the need to build and protect brands in cross-border e-commerce.

According to Amazon's survey, 59% of buyers choose familiar brands when looking to buy new products; 80% of buyers discover new brands on e-commerce platforms; the growth rate of branded sellers is 1.5 times higher than that of non-branded sellers.

Linh An - Ngoc Mai

Source