BANKING ACADEMY INTERNATIONAL BUSINESS FACULTY BACHELOR’S THESIS PROMOTING CROSS-BORDER E-COMMERCE: CURRENT SITUATION AND SOLUTIONS FOR VIETNAM Student’s name : Hoang Thi Thao Class : K20KDQTD Course : 2017-2021 Student’s ID : 20A4050322 Supervisor : M. Ngo Duong Minh Hanoi, May 2021 ACKNOWLEDGEMENT I would like to thank teachers in Banking Academy, especially lecturers of Faculty of International Business for their devoted guidance throughout the course of my study process. Thanks to the teachers' support, I have gained more useful and relevant knowledge to complete this research topic. I want to give my sincerely thank to M.
Ngo Duong Minh - who has always devoted and supported me to complete my thesis. During the research process, I tried to implement this topic completely. However, due to the limitation of knowledge and reality experience, this research cannot avoid the shortcomings. I look forward to receiving the comments from teachers in the Faculty of International Business to help improve the quality of my thesis.
i DECLERATION I assure that my graduation thesis with the topic "Promoting cross-border e- commerce: current situation and solutions for Vietnam” is my personal research with the guidance of M. Ngo Duong Minh - Lecturer of the Faculty of International Business at Banking Academy. Data sources and information used during the study are derived and cited in accordance with regulations. These findings have not been published in any other studies before at the time of this thesis’s completion.
I take all responsibility for my thesis. Student’s signature Hoang Thi Thao ii CONTENTS ACKNOWLEDGEMENT. ii TABLE OF ABBREVIATIONS. vi LIST OF FIGURES.
vii LIST OF TABLES. The research motivation. Research subject and scope. Structure of the topic.
9 CHAPTER 1: OVERVIEW OF PROMOTING CROSS-BORDER E- COMMERCE.1 OVERVIEW OF E-COMMERCE .1 Background of e-commerce .2 Cross-border e-commerce .2 PROMOTION OF CROSS-BORDER E-COMMERCE .1 Concept of cross-border e-commerce promotion .2 Criteria for assessing cross-border e-commerce promotion .3 INTERNATIONAL EXPERIENCE IN PROMOTING CROSS- BORDER E-COMMERCE.1 Experience from Singapore .2 Experience from Malaysia .3 Lessons for Vietnam in promoting cross-border e-commerce. 26 CHAPTER 2: SITUATION OF CROSS-BORDER E-COMMERCE PROMOTION IN VIETNAM .1 CURRENT SITUATION OF CROSS-BORDER E-COMMERCE PROMOTION IN VIETNAM .1 The legal framework .3 The human resources .4 Popular e-commerce model in Vietnam .5 The results of cross-border e-commerce promotion in Vietnam .2 EVALUATE THE CROSS-BORDER E-COMMERCE PROMTION IN VIETNAM. 47 CHAPTER 3: ORIENTATIONS, SOLUTIONS, AND RECOMMENDATIONS IN PROMOTING CROSS-BORDER E- COMMERCE IN VIETNAM .1 THE DEVELOPMENT ORIENTATION OF CROSS-BORDER E- COMMERCE IN VIETNAM .2 SOLUTIONS TO PROMOTE CROSS-BORDER E-COMMERCE IN VIETNAM .1 Solutions to improve information technology infrastructure to take advantage of the international cooperation .2 Solutions to improve the quality of human resources to take advantage of the FTAs .3 Solutions to develop the quality of the Vietnamese products under the impact of the Covid-19 pandemic .4 Solutions to improve the infrastructure to restrict challenges.3 RECOMMENDATIONS TO THE GOVERNMENT FOR THE PROMOTION OF CROSS-BORDER E-COMMERCE IN VIETNAM. v TABLE OF ABBREVIATIONS AGS Amazon Global Selling APEC Asia-Pacific Economic Cooperation ASEAN Association of Southeast Asian Nations B2B Business to Business B2C Business to Customer C2C Customer to Customer EDI Electronic Data Interchange EFT Electronic Fund Transfer EU European Union EVFTA European-Vietnam Free Trade Agreement GDP Gross Domestic Product IMF International Monetary Fund IT Information Technology JIT Just In Time SMEs Small and Medium Enterprises VECOM Vietnam E-commerce Association WTO World Trade Organization vi LIST OF FIGURES Figure Page Figure 1.1: Malaysia E-commerce value (MYRbn) period 2016-2020 25 Figure 2.1: The rate of businesses having website 34 Figure 2.2: The frequency of updating information on the website of 34 businesses Figure 2.3: Skills relate to e-commerce are difficult to recruit 37 Figure 2.4: Revenue of B2C e-commerce in Vietnam 2015-2019 (billion 38 USD) LIST OF TABLES Table Page Table 1.1: The types of e-commerce by the parties involved 13 Table 1.2: Singapore’s Leading e-commerce players (2020) 24 Table 3.1: Proposed solutions based on Vietnam's strengths, weaknesses, 51 opportunities, and challenges vii INTRODUCTION 1.
The research motivation In recent years, the economy is growing day by day and Vietnam has shown a stable development through numerous trade and finance figures. According to the International Monetary Fund (IMF), Vietnam's GDP per capita will increase from 3,416 USD (2019) to nearly 3,500 USD (2020). That figure shows that the size of Vietnam's economy tends to exceed Singapore ($337 billion) and Malaysia ($336 billion). In particular, thanks to the application of the internet and science and technology, Vietnam's e-commerce industry also contributes significant profit to the overall economy of the country.
Cross-border e-commerce, in particular, has great support in promoting trade, import and export, and at the same time strengthening the cooperative relationship between Vietnam and many countries around the world. Vietnam is considered as a country with great potential to promote cross-border e- commerce. Firstly, the demand for e-commerce of consumers is increasing. With the advent of the internet and the development of science and technology, people gradually turned towards convenience not only at work but also in daily living habits.
Instead of just shopping by traditional methods, consumers can easily access international products and services using technology equipment connected to the network. That is also a driving force for businesses to seize opportunities and promptly bring their products to international customers. Statistics from VECOM (2018) show that in the period 2014 - 2020, the e-commerce growth rate of Vietnam averaged over 30% per year. It is expected that this market size will reach 33 billion USD by 2025, ranking third in Southeast Asia after Indonesia and Thailand.
Secondly, Vietnam is actively expanding cooperative relations with many countries around the world by signing free trade agreements and participating in economic forums. In 2020, according to WTO Center Report, Vietnam signed a Free Trade Agreement (EVFTA) and an Investment Protection Agreement (EVIPA), opening up opportunities for comprehensive and stronger cooperation 1 between Vietnam and EU. EVFTA is a comprehensive, high-quality, balanced agreement of interests for both Vietnam and the EU, and following the provisions of the World Trade Organization (WTO). For Vietnam's exports, as soon as the Agreement comes into effect, the EU will eliminate import duties on about 85.6% of tariff lines, equivalent to 70.3% of Vietnam's export turnover to the EU.
The expansion of international cooperation has a great influence on the business activities of individuals and organizations, especially in cross-border e-commerce industry. Thirdly, there are few studies on the current situation of cross-border e- commerce in Vietnam. Previous studies were mainly carried out the general theory of e-commerce or addressed a few minor aspects of e-commerce promotion. In addition, many studies on promoting cross-border e-commerce were conducted more than five years ago, so the data is not updated in the current period.
Cross-border e-commerce is a more complicated form of business than traditional businesses, Vietnam also faces some difficulties such as financial capacity, qualifications. If Vietnam has no appropriate policies, this will be a great challenge to approach the international markets. Recognizing that perspective, I decided to choose "Promoting cross-border e-commerce: current situation and solutions for Vietnam" as the research topic with the desire to find out the opportunities and challenges of Vietnam. Besides, this research will provide solutions to help Vietnam improve the quality of its e-commerce industry and compete in the international market.
Research subject and scope 2. Research subject The research subject of this topic is the current situation of cross-border e- commerce promotion of business organizations, individuals, and the government. Research scope About the spatial scope: studying individuals and organizations that promote business through cross-border e-commerce. 2 About the time scope: Collect data and evaluate the current situation of e- commerce promotion and cross-border e-commerce in Vietnam in the period 2015- 2020.
Since then, solutions and recommendations for Vietnam, development orientation to 2025 are drawn. What are opportunities and challenges that Vietnam has to face when promoting cross-border e-commerce? 3. Which solutions and recommendations should be suggested to support cross- border e-commerce promotion in Vietnam? 4. Research objectives In order to clarify that research questions, the research focuses on some objectives 1.
Clarify the theory of e-commerce and cross-border e-commerce. Besides, find out criterias that affect to cross-border e-commerce promotion. Evaluate the current situation, determine the strengths, weaknesses, opportunities and challenges of Vietnam's cross-border e-commerce, specifically in the period 2015-2020. Propose solutions for individuals and businesses in Vietnam, make recommendations to relevant ministries, departments in promoting cross-border e- commerce.
Research method The research uses a combination of these following research methods Firstly, the theoretical analysis and synthesis method: Collect mainly from secondary information sources, e-commerce documents, focus on cross-border e- commerce of Vietnam, learn carefully deep into the current situation of Vietnamese individuals and businesses in the cross-border e-commerce promotion; then synthesize that information and documents into new complete and in-depth theory about the object. 3 Secondly, the method of analyzing and summarizing the experience: Deeply understanding the implementation of e-commerce promotion of countries around the world, from there draw lessons and experiences that applied to Vietnam. Thirdly, the method of data collection: Based on information collected from available references to build evidence to support the hypotheses. The assessment of the current situation of Vietnam in e-commerce should be clearly described through specific data and reports.
Therefore, the method of data collection is necessary and effective. Fourthly, model-based analysis method: Evaluate problems through building SWOT model to identify strengths, weaknesses, opportunities and threatens of Vietnamese businesses in cross border e-commerce promotion. Literature review The development of the economy made the international trade expansion become popular in every country in the world. Understanding that, they are focusing on promoting e-commerce, especially cross-border e-commerce, enhancing the position in the overall economy.
There are many articles and researches on e-commerce topic in Vietnam as well as abroad. Foreign research According to the research titled “Cross-border e-commerce makes the world flatter” published in 2014 by the authors Heel, B. et al from The Boston Consulting Group, although e-commerce is the fastest-growing retail channel by far, its growth is being constrained by barriers to cross-border transactions. Barriers to cross- border e-commerce promotion are pointed out with some implications for sellers and carriers to compete in an effectively borderless world.
The study "The development of Cross border e-commerce" by Juliana, C. et al (2017) shows an increasing amount of people are shopping online across the borders. By systematic review recent academic papers and research reports, the current situation of its development was identified. Supported by advanced technology, growing demand and advantageous policy, cross-border e-commerce is 4 booming globally.
However, culture and consumer behavior, laws and regulations, marketing issues, payment conditions and logistics limitations were identified as the main obstacles to its success. Because the products in cross-border e-commerce often require long distance transport, the logistics-related issues showed to be still the strongest concern to be addressed and overcome in order to allow such a movement, wherein, long transportation times, bad return service and high shipping costs are increasingly prominent. Therefore, a need for international cooperation between all involved parties - governments, merchants and service providers, is called. In the end, a proposed responsibility assignment for its development is presented.
The importance of developing cross-border e-commerce, particularly in China is identified by the authors' Ma, S. et al (2018) on the topic "Rise of Cross- border E-commerce Exports in China". Besides, they have given the operational structure and proved that China is doing effectively this e-commerce promotion. In this paper, the author uses quantitative research methods.
The data utilized for constructing the prosperity index and the risk index for China’s export e-commerce industry are derived from the hosted enterprise database of Jiangsu BizArk E- commerce Co. BizArk is currently the largest total solution provider of overseas marketing and cross-border e-commerce hosting service platform in China. The results show the current situation of China's cross-border e-commerce and the risk of this industry. From there, the author proposes solutions to develop e- commerce.
Besides, they also proposed future researches.
