Should Your Small Business in Vietnam Make Its Online Presence through E-Commerce?

With advanced technology and access to the internet, it makes sense for a small business in Vietnam to want to make its online presence.

E-commerce has recently become one of the fastest-growing sectors globally, with total online sales up to US$4.8 trillion in 2020. As the online phenomenon sweeps across Vietnam, small online businesses have gained the opportunity to expand their market digitally.

According to a report by the Vietnam e-Commerce and Digital Economy Agency (iDEA), the e-commerce market in Vietnam grew by 18%, reaching $11.8 billion last year, accounting for 5.5% of total retail sales of consumer goods and services nationwide.

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The growing landscape of e-commerce in Vietnam might look optimistic but it’s no reason to rush into it blindly. Having a clear picture of the long-term goal, with prior information about the industry can go a long way in ensuring the success of an e-commerce business. 

This article answers some of the most important questions one might ask themselves to gain a clear roadmap of the e-commerce journey.

small business in vietnam online presence

Can I Have an E-commerce Presence for My Small Service Business in Vietnam?

Despite the popular belief that e-commerce is only useful for tangible goods, setting up an e-commerce website can help a service firm increase its visibility.

Content writing, graphic design, website building, and digital marketing are some services that can be marketed online through a website. Gift certificates and service vouchers, online subscriptions, training packages, ebooks, and other digital commodities can also be sold to help the service business make money.

Are There Start-up Costs for Online Businesses?

There is no definite amount set to establish an e-commerce business. The amount varies depending upon the type of business one wishes to run. Like, if there is an online business that sells ebooks, photographs, and online training videos, the start-up cost is lesser than those that sell tangible products. Sales of tangible products need a more complex platform and initial investment for stock purchase.

RELATED: How to Start Selling Products Online in Vietnam

Here are some of the general start-up aspects that cost both service and product e-commerce:

  • Website development
  • Company registration and licensing
  • Domain and web hosting registration
  • Marketing and promotion

Are Your Products Easy to Ship?

Product shipment can prove to be a real challenge if the business has large and heavy products to ship. Customers who shop online are doing so to get a product quicker and delivered to their doorstep at a low cost. Hence, to meet the customer’s demand, the business needs to consider if the high shipping cost could harm the profit, or if the target consumers could adapt to the shipping charges.

How about the Cost of Return?

Some online businesses do not prefer to go online as they feel that the trouble with returns and refunds is more than they’d bargained for. They’ve realized that there are always going to be customers who will take advantage of the free delivery and free return policies. In most cases, the customers return the product after having used them for a while and ask for a refund on the item they don’t need anymore. For a small business, there’s no profit margin to deal with the loss incurred during returns and refunds, and hence, they get impacted negatively.

Therefore, it’s best in their interest that they start with selling through digital marketplaces first, to establish an online presence, before easing their way into being an independent e-commerce business.

How to Start an E-Commerce Business in Vietnam?

To set up an online presence through e-commerce for a small business, one must be well acquainted with the specifics of starting an e-commerce business in Vietnam. 

According to the company law in Vietnam, there are several requirements a foreign investor needs to meet to form a company online. 

To begin with, follow certain processes to get certificates such as a Business Registration Certificate and an Investment Registration Certificate. Additionally, the Ministry of Industry and Trade must approve the website before it may be registered in Vietnam. More permits may be required depending on the kind of business activity.

RELATED: How to register an E-Commerce website in Vietnam

How Cekindo Can Help

Setting up an e-commerce business in Vietnam could be a tedious task. Cekindo, with its comprehensive business solution services, will not only help you in your company registration but will also ensure that you stay on top of all legal compliances. Post incorporation, we also offer HR services and accounting services.

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Tomas Svoboda - Cekindo - Vietnam Country Manager

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Ing. Tomas Svoboda

Tomas is the co-founder & Chief Business Development Officer responsible for Vietnam. His role is to define the key potential of the Vietnamese market and to ensure that Incorp's branch in Vietnam provides its clients with smooth and hassle-free market entry solutions.