BANKING ACADEMY FACULTY OF INTERNATIONAL BUSINESS BACHELOR’S THESIS THESIS TITLE: CROSS-BORDER E-COMMERCE: PROMOTING VIETNAMESE PRODUCTS TO THE GLOBAL MARKET Student’s name: Nguyen Ha Minh Hanh Class: K19KDQTA Intake: 19 Student’s ID: 19A4050077 Advisor: Dr. Mai Huong Giang Hanoi, May 2020 BANKING ACADEMY FACULTY OF INTERNATIONAL BUSINESS BACHELOR’S THESIS THESIS TITLE: CROSS-BORDER E-COMMERCE: PROMOTING VIETNAMESE PRODUCTS TO THE GLOBAL MARKET Student’s name: Nguyen Ha Minh Hanh Class: K19KDQTA Intake: 19 Student’s ID: 19A4050077 Advisor: Dr. Mai Huong Giang Hanoi, May 2020 i ANNOUNCEMENT I want to declare that this thesis is my own independently researched work. Statistics used for analysis purpose in this thesis have clear and well-founded origins and was published legitimately in accordance with the current applicable Vietnamese regulations.
Research findings in this thesis are my independent, factual and objective work that is in agreement with the situation in Vietnam. These findings have not been published in any other studies before at the time of this thesis‟s completion. Hanoi, May 30th, 2020 Student Nguyen Ha Minh Hanh ii ACKNOWLEDGEMENT Having received the honor to participate in the thesis stage at the end of the curriculum, firstly I want to express my deepest gratitude to the Banking Academy and the honorable staffs and professors who have always accommodated me with the most favorable conditions and have also offered me the best learning environment so far. I also want to send my thanks to Dr.
Mai Huong Giang who has helped me greatly and devotedly during my researching time so that I could finish this thesis in a timely manner. Concurrently, I would also like to say thanks to the professors and staffs in the International Business Faculty and friends who have supported me in the completion of this thesis. Lastly, because of my unavoidable lack in theoretical reasoning and practical experience, this thesis may not be a faultless production. Therefore, I would eagerly hope to receive valuable feedbacks as well as ideas of suggestions from your honorable readers so that I could perfect my work better.
Thank you for your understanding and support up until the moment. We really appreciate your patience and hope that we could have a successful Thesis Presentation round. iii CONTENTS TABLE OF ABBREVIATIONS. vi LIST OF TABLES AND FIGURES.
0 CHAPTER 1: THEORETICAL BASIS OF CROSS-BORDER E- COMMERCE. BACKGROUND OF E-COMMERCE. Definition of e-commerce. Characteristics of e-commerce.
Classification of e-commerce. BACKGROUND OF CROSS-BORDER E-COMMERCE. Definition of cross-border e-commerce. Cross-border e-commerce channel options.
BENEFITS OF CROSS-BORDER E-COMMERCE. BARRIERS TO CROSS-BORDER TRANSACTIONS .THE EXPORT CROSS-BORDER E-COMMERCE BUSINESS ECOSYSTEM. The ecosystem structure of cross-border e-commerce exports. The logistics system.
The payment system. LESSONS FROM THE UNITED STATES AND CHINA’S CROSS- BORDER E-COMMERCE. The strengths and limitations of China’s cross-border e-commerce. The strengths and limitations of the United States’ cross-border e- commerce.
Lessons for Vietnam’s cross-border e-commerce. THE CURRENT SITUATION OF USING CROSS-BORDER E- COMMERCE TO PROMOTE VIETNAMESE PRODUCTS. INSIGHT ON VIETNAM’S E-COMMERCE. Adoption of e-commerce in Vietnam.
THE ECOSYSTEM OF CROSS-BORDER E-COMMERCE IN VIETNAM. The ecosystem structure of cross-border e-commerce exports. The logistics system. The payment systems.
ANALYSIS OF SOME CASE STUDIES OF VIETNAM’S CROSS- BORDER E-COMMERCE. Exporting products over the world through marketplaces. Promoting products globally through websites .3 Promoting products to international markets using multichannel: Integrate marketplaces with websites and social media. EVALUATE THE CURRENT SITUATION OF UTILIZING CROSS- BORDER E-COMMERCE IN PROMOTING VIETNAMESE PRODUCTS TO THE GLOBAL WORLD.
Reasons for the drawbacks .SOLUTIONS AND RECOMMENDATIONS TO PROMOTE VIETNAMESE PRODUCTS TO THE GLOBAL MARKET USING CROSS- BORDER E-COMMERCE. VIEWPOINTS ON DEVELOPING E-COMMERCE IN VIETNAM AND TARGETS TO BE REACHED. OPPORTUNITIES AND THREATS OF VIETNAM’S CROSS- BORDER E-COMMERCE. Opportunities of Vietnam’s cross-border e-commerce.
Threats of Vietnam’s cross-border e-commerce. SOLUTIONS TO PROMOTE VIETNAMESE PRODUCTS TO THE GLOBAL WORLD USING CROSS-BORDER E-COMMERCE. Solutions to improve ecosystem structure of cross-border e- commerce exports. Solutions to improve the quality and quantity of human resources.
Solutions to improve the efficiency of cross-border e-commerce activities. Solutions to raise Vietnamese businesses’ awareness. Solutions to enhance the competitiveness of Vietnamese businesses. RECOMMENDATIONS TO PROMOTE VIETNAMESE PRODUCTS TO THE GLOBAL MARKET.
Recommendations to the government and state agencies. Recommendations to Vietnamese businesses. Recommendations to Vietnamese service providers. 73 vi TABLE OF ABBREVIATIONS Abbreviation Explanation CBEC Cross-border e-commerce CPTPP The Comprehensive and Progressive Agreement for Trans- Pacific Partnership FTA Free Trade Agreement IT Information Technology ITPC Investment and Trade Promotion Center SMEs Small and medium-sized enterprises UNCTAD The United Nations Conference on Trade and Development UPS United Parcel Service UPU Universal Postal Union USPS United States Postal Service.
VECOM Vietnam Ecommerce Association WTO World Trade Organization vii LIST OF TABLES AND FIGURES Figure Page Figure 1. The ecosystem structure of cross-border e-commerce 17 exports Figure 1. Export logistics process of CBEC under the Mode of 19 value chain logistics Figure 1. The cross-border shipping model 21 Figure 1.
The local distribution model 22 Figure 1. The process of a payment gateway in e-commerce 23 Figure 2. The packaging of RiceStraw‟s product 49 Figure 2. Channels using by 15 Vietnamese businesses to sell 51 abroad Table Page Table 1.
The types of e-commerce by the parties involved 9 Table 1. Cross-border e-commerce channel options 11 INTRODUCTION CROSS-BORDER E-COMMERCE: PROMOTING VIETNAMESE PRODUCTS TO THE GLOBAL MARKET 1. Research motivation There is no doubt that e-commerce market continues to develop swiftly, in spite of world economic crisis and other negative effects. Businesses of all sizes are making every effort to find partners from all around the world on the Internet and conducting their sales across borders through online channels.
It is clear that cross- border e-commerce has its popularity increasing and has been widely adopted by small and medium enterprises in recent years, especially for which in developing economies like Vietnam. The statistics of “White paper on Vietnamese enterprises” show that small and medium enterprises accounts for 97,21% of all enterprises in Vietnam, so their search for new export markets will be a motivation for developing the e-commerce industry and the economy. Indeed, cross-border e-commerce (CBEC) is currently the fastest growing area of world trade and an effective tool to help small and medium-sized enterprises to participate in globalization. Vietnamese merchants are attracted to global e-marketplaces which allow customers to search for a broader variety of products and enable international sales at low cost.
According to Amazon traders, Vietnam has great potential to develop CBEC thanks to its manufacturing advantages and abundance of labor supply and the new generation of young, promising and talented managers. Besides, Vietnamese enterprises have the opportunity to scrutinize and perfect their products, in order to promote the quality of "made in Vietnam" goods when participating in online export. This can help develop Vietnamese brands and promote Vietnam's image closer to international friends. Vietnam recently has been one of the countries that has experienced the fastest growth of e-commerce, at over 35% annually, 2.5 times higher than Japan.
The bloom of e-commerce has aided the development of CBEC as the total cross-border online transaction value is expected to hit US$900 billion globally by 2020, making up 22% of global e-commerce value. However, the awareness of the importance and benefits of e-commerce is not fully recognized by many Vietnamese businesses, which can impede the development of CBEC. Moreover, based on the relevant literature, I found that there were few researches on the topic of CBEC in Vietnam. From that perspective, I decide to choose “Cross-border e-commerce: Promoting Vietnamese products to the global market” as the title of my thesis.
Literature review In the process of gathering documents for this paper, the author encountered many research articles, scientific works and projects that were published under various aspects and different angles of e-commerce written by both Vietnamese and foreign researchers. Local studies - The article titled “E-Commerce Platform – Road To Success In Vietnam And Cross-Border Trading”, which was written by ASL LAW and published on Vietnam Law Magazine in 2019, demonstrates some difficulties and challenges for the success of CBEC in Vietnam. The article highlighted that e-commerce is “internet-based service” and without internet, e-commerce cannot develop and spread its influence on the global economic and Vietnam‟s economic today. After presenting statistics of the current situation of Vietnam‟s e-commerce, ASL LAW analyzed drawbacks of Vietnam‟s legal framework on e-commerce and gave demonstration.
This helps the author of this thesis identify the lack of a united legal document as the main barrier to Vietnam‟s CBEC. However, this article focused on the status of e-commerce within Vietnam and only mentioned CBEC in few paragraphs, which is not sufficient to help readers comprehensively understand Vietnam‟s CBEC. Besides, the author only presented the current issues but did not suggest any solutions to improve the situation. -Tran Ngoc Thap, a student of Faculty of International Business, evaluates the current situation of online retailing in Vietnam and provides solutions to enhance the quality of the industry in the thesis named “Áp dụng Thương mại điện tử trong ngành bán lẻ tại Việt Nam: Thực trạng và giải pháp”, which means “Applying E-commerce to retail sector in Vietnam” in 2018.
Foreign studies - Through the book “Mastering Import and Export Management 3rd edition” of Thomas A.Cook & Kelly Raia (2017), the author of the thesis found the theory of CBEC channel options, which is the basis for the author of the thesis to organize the chapter two. However, the entire book only mentioned CBEC few times and did not include any practical information on Vietnam‟s CBEC. - According to the research titled “CBEC makes the world flatter” published in 2014 by the authors Bas van Heel and 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 CBEC are pointed out with some implications for sellers and carriers to compete in an effectively borderless world. Besides, many domestic and foreign economic organizations have specialized research sections on e-commerce such as VECOM, Institute of Trade Research, etc. It is widely recognized that CBEC is a low-cost, asset-light way to sell to new, untapped markets. Literature gap In general, conducted research on CBEC in Vietnam cannot be found easily and the articles, as well as research papers, have not updated the latest trend of e- commerce.
They only stop at presenting statistics, theories instead of analyzing the situation and suggesting solutions to improve the situation. Furthermore, there have not been in-depth studies on e-commerce application to promote Vietnamese products to the global market. Before this thesis, never have any articles ever analyzed the case studies of Vietnamese businesses promoting products via CBEC. Therefore, it can be said that this thesis is to fill the gap of previous literatures.
Research scope and objective - The specific objectives of this review research are to study the Vietnam‟s cross-border ecosystem and the current situation of Vietnamese businesses selling internationally through e-commerce sites thereby presenting solutions to promote Vietnamese products to the global market. The thesis focuses on B2C and B2B export CBEC. - The scope of the study: the research topic on CBEC in Vietnam in the last 5 years, from 2014-2019. Research questions and purpose - The aim of the research is to investigate the influence, barriers and benefits of CBEC adoption in Vietnam, necessary elements to develop CBEC in Vietnam and propose suggestions to take advantage of e-commerce to promote Vietnamese local products to the global market.
- The following research questions have been set: What is the level of development and the impact of CBEC on Vietnamese companies? What are the perceived benefits of CBEC adoption? What are the perceived barriers for CBEC adoption? By which means can Vietnamese sellers are adopt e-commerce in promoting products to the outside market?
