The global tech slowdown caused e-commerce to decline worldwide, but Amazon Global Selling business in Vietnam is still growing well. Mr. Gijae Seong, Head of Amazon Global Selling Vietnam, told Nhip Cau Dau Tu magazine that the growth potential of cross-border e-commerce in Vietnam is large.

Could you provide details about Amazon Global Selling’s operation in Vietnam, given that there is a tendency for global e-commerce to decline as a result of inflation, high bank interest rates, and economic recession?

Since 2019, Amazon Global Selling has established its first dedicated team in Vietnam. We accomplished a lot in just three years after making our debut in Vietnam. Although the year 2022 presents various challenges and uncertainties for the global and Vietnamese economies, the number of local businesses registering to sell on Amazon has increased by 80%. The total export value of Vietnamese businesses through Amazon has grown by 45%.

The significant rise in both the number of participating businesses and the export value from Vietnam on Amazon indicates the development of cross-border e-commerce in Vietnam over the past years and the untapped potential that lies ahead.

Southeast Asia is the fastest digital sales growth in the world. Also, in the past 2-3 years, global selling through Amazon by Vietnamese businesses has achieved the highest growth rate in the region, compared to Thailand, Indonesia, Malaysia, and the Philippines.

Mr. Gijae Seong, Head of Amazon Global Selling Vietnam

In your opinion, what factors contribute to the miraculous growth of cross-border e-commerce in Vietnam?

As previously stated, Vietnam has the region’s fastest-growing rate of cross-border e-commerce through Amazon. The need in business for digital transformation and e-commerce exploitation is tremendously strong. Many FDI companies have relocated manufacturing to Vietnam, demonstrating that “Made-in-Vietnam” goods may produce national value. Furthermore, with hundreds of thousands of entrepreneurs, Vietnam has a significant and active online merchant and startup ecosystem.

Since the establishment of the Amazon Global Selling Vietnam team, we have worked with and supported thousands of Vietnamese selling partners, including many well-known traditional manufacturers, young brand owners, and startups. They are active and attentive to Internet business. They are entrepreneurs with a global vision who are willing to explore new prospects and pave the way for cross-border e-commerce. They expertly harness their capabilities to produce one-of-a-kind Made-in-Vietnam items and deliver them to the worldwide market through Amazon.

What are the most impressive achievements of Amazon Global Selling in Vietnam’s four years?

We are pleased to see that cross-border e-commerce has opened up opportunities for Vietnamese entrepreneurs, motivating them to seize the power of online business and export opportunities to increase revenue and recover after the COVID-19 pandemic.

Amazon Global Selling continues its role as a trusted partner on the global journey of Vietnamese entrepreneurs, businesses, and manufacturers. We provide resources, tools, and services to help them succeed in their businesses. The diverse participation of selling partners from many types, sizes, or industries shows that cross-border e-commerce is no longer a playground for only big brands.

Amazon Global Selling Vietnam’s efforts to help sellers have had positive impacts on Vietnam’s digital economy, contributing to enhancing the position of goods and brand value “Made-in-Vietnam”, promoting Vietnamese businesses, and supporting the creation of jobs in many localities.

Cross-border e-commerce is no longer a playground only for big brands in Vietnam. We are impressed with the prosperity of 2022, as more than 10 million Made-in-Vietnam products were sold to Amazon customers globally.

AnEco brand officially appears on Amazon with careful investment to reach hundreds of million customers of Amazon. Photo: Amazon Global Selling Vietnam

Do you think Made-in-Vietnam products are competitive enough in the international market?

Cross-border e-commerce contributes to helping Vietnamese businesses and entrepreneurs transform their mindset with a long-term vision and the ability to react quickly to the market. Vietnam emerges as a new global manufacturing hub with abundant production capacity and diversified products ranging from furniture, handicrafts, textiles, fashion, industrial machinery, consumer products, electronic technology, agricultural products, etc.

In my opinion, Vietnamese enterprises need to pay attention to the following factors to increase the competitiveness of Made-in-Vietnam products in the global market.

Vietnamese manufacturers and brand owners must understand international customers, thereby providing products with the features and designs they need and the services they want. They must read the needs and tastes of international customers by taking advantage of digital technology.

They have to innovate and create breakthroughs in their products. Normally, manufacturers can only listen to feedback from the market through intermediary channels. The process of adjusting products and responding to new arrivals on the international market can take anywhere from 6 months to 1 year. But with e-commerce, this process can be shortened to just a few months without having to wait for the sales report for 6 months to 1 year to change.

Finally, in the global “battlefield”, product quality is a must, but how to enhance product value through brand value is the key. By understanding customers when innovating products and knowing how to tell product stories with brand stories, businesses will have a competitive advantage in the global market.

Exports are the mainstay of Vietnam’s economy. Through Amazon, export activities open up a new way of “online export”. Can you share more about the potential and room for growth of Vietnam’s online exports?

According to the latest survey by the consulting firm Access Partnership, it is estimated that in 2022, Vietnam’s e-commerce export value reached VND 80 trillion. Vietnam’s export turnover through e-commerce could reach nearly VND 300 trillion by 2027.

Vietnam’s “online export” room is still very large when it only accounts for a small part of Vietnam’s total export turnover. This shows that the potential and space of Vietnam’s online exports are still large.

According to a separate report by AlphaBeta, “online export”, or cross-border e-commerce, is showing that this is a new opportunity for Vietnam with a large potential growth scale in the next five years, forecasting a growth rate of more than 20% per year. Cross-border e-commerce can bring opportunities to comprehensively change the way businesses think, operate, and develop. Cross-border e-commerce creates new value, not only “Made-in-Vietnam”, but “Vietnamese Brand” in the international market.

More than just a new concept or business trend, cross-border e-commerce promises to be a “new normal”, a movement for Vietnamese businesses, and a strong driving force for the export-driven economy.

Lafooco, the Vietnamese cashew nut brand has also moved towards the international market with cross-border e-commerce with Amazon. Photo: Amazon Global Selling Vietnam

Before Vietnam, you were one of the first employees to lay the foundation for Amazon in Korea and Singapore. What do you think is different about the Vietnamese market? What is the strength of Vietnam?

I have a predestined relationship with Vietnam since before Amazon Global Selling was established in this country. In 2017, I had a business trip to Vietnam to attend an event for cross-border e-commerce sellers organized by a third party. I was impressed to see thousands of guests attending with extremely positive energy and enthusiasm. I feel that the people here are full of enthusiasm and want to join the general flow of new commercial trends around the globe.

In 2019, Amazon Global Selling established a dedicated team in Vietnam. At that time, I was still working in Singapore and supporting Vietnam remotely. In 2021, I officially assumed the position of executive and manager. We now have two teams in Ho Chi Minh City and Hanoi and have been supporting thousands of Vietnamese selling partners to go global.

The pandemic has created a big change in online shopping habits and trends, thereby creating momentum for the digital economy in Asia, especially Southeast Asia, which has witnessed significant growth. Korea, Singapore, and Vietnam reflect different levels of e-commerce development.

Korea is one of the largest e-commerce markets in the world, with brands and categories that have made a strong impression on the international market. Meanwhile, Singapore continues to assert itself as one of the most important e-commerce destinations in Asia with strong entrepreneurship and brand ownership. For Vietnam, we have abundant production capacity, diverse product lines, and a large community of online sellers and startups who are ready to accept new models, new experiments.

Although they are at different stages of the development of e-commerce, the similarity that I have noticed between the three countries is that they are all export-based economies. However, the level of awareness of opportunities coming from cross-border e-commerce compared to domestic e-commerce is still at different levels of development between countries.

The announcement comes a year after the business launched its second fund for $60 million, making it the biggest indigenous venture capital vehicle supported by local companies. Local LPs such as IPA Investments, Phu Thai Holdings, and Stavian Group contributed to the fund, which intends to invest in pre-seed through Series A stage digital businesses.

The venture capital company will run both funds at the same time, even though their goals are different. Fund II will focus on chances in Vietnam, while Fund III will look for global startups with a team, clients, and income from the Vietnamese market.

The latter will be open to international startups that hire Vietnamese workers or build their first product in Vietnam to save money or test the market before going global.

Even though things are hard right now, ThinkZone Ventures wants to have its first close by the end of this year or the beginning of 2024.

The fund is still interested in fintech, education tech, health tech, and software-as-a-service. ThinkZone thinks that these four areas are important for any market or country because they make financial services more accessible, improve education, raise living standards, and make digital change more efficient.

ThinkZone Ventures just appointed Hoang Nguyen as a new partner and head of investments as it looks to grow its global reach. Hoang has more than 10 years of experience in finance and investments. He has worked at Deloitte Vietnam Financial Advisory and Sovico Group.

ThinkZone is one of the most busy local venture capital firms. It has 15 startups in its portfolio, including the fintech companies GIMO and Fundiin and the ed tech startup Edupia.

GIMO just revealed that its Series A round, which raised $17.1 million, is over. Earlier, Edupia’s Series A round, which was led by Singapore-based Jungle Ventures, raised $14 million.

ThinkZone Ventures started the Global Minds Accelerator program in 2022, with TNB Aura Vietnam Scout as a strategic partner to co-invest, teach, and help Vietnamese tech startups.

As Vietnam’s tech startup environment grows, local venture capital firms like Ascend Vietnam Ventures, Do Ventures, Touchstone, Next100, Viet Valley Ventures, VIC Partners, Teko Ventures, and FEBE Ventures have started to appear.

DealStreetAsia said that VinaCapital Ventures, the venture capital part of Vietnam-based asset manager VinaCapital, plans to start its second $100 million fund, which will focus on offering growth capital.

Last year, AVV’s main early-stage venture capital fund, AVV Alpha, made more than the $50 million goal it had set for itself.

Source: Nikkei Asia

Digital transformation has opened opportunities for businesses to participate more deeply in global supply chains and value chains, contributing to improving competitiveness, helping them connect closer to customers, and restructuring businesses.

However, to help digital transformation in businesses be more effective and successful, it is crucial to have a new way of thinking and new capabilities in the operation towards combining people and machines on the basis of digital technologies and digital data. 

Changing mindsets and perceptions

The Government’s National Digital Transformation Programme to 2025, with orientation until 2030, has set out the goals of developing a digital government to improve operational efficiency and effectiveness; developing a digital economy to improve the competitiveness of the economy; and developing digital infrastructure to narrow the digital gap. In particular, digital transformation is the main means and an appropriate, pioneering, and revolutionary policy.

The actual implementation in some enterprises and localities shows that the digital transformation process has been only considered as non-professional work, in addition to the political and economic goals being carried out. The awareness and selection of technology, ecosystem, people, and financial capacity have not been synchronized nor given due attention in some instances and in some places. This mindset is currently a barrier and a challenge that makes the transformation difficult to reach success. 

Recalling the intention to apply digital transformation in her business 5-7 years ago, General Director of Hong Duc Education Equipment Joint Stock Company Vu Thi Ngoc Anh said when starting to apply digital transformation, many employees and even managers of the company have not kept up with new technology, so they objected strongly because they thought it was complicated and they were afraid to do it all over again. In addition, some individuals have not been clearly aware of the benefits of digital transformation in businesses, so they have refused to do.

Due to the lack of experience, some units have applied many software and technologies at the same time, causing a lack of linkage and synchronousness in data and systems and leading to many errors. The challenges mentioned above have caused the digital transformation process at the companies to fall into a “stalemate” because they do not know where to start and how to do it right. Therefore, digital transformation is a big problem for the whole business. 

To solve that problem, business leaders need to take action with a digital mindset. Then the digitization and innovation from the normal system to the digital system will be taken into account, in which digitized results converted to building a management reporting system linked to the database. Finally, the businesses should make a full transformation. Currently, most Vietnamese enterprises have failed in digital transformation or confused data digitization with digital transformation, due to financial problems and a lack of technology knowledge among business leaders.

Human resources – the decisive factor

According to a recent survey by the Vietnam Confederation of Trade and Industry (VCCI), 23.8% of surveyed businesses knew about digital transformation but they lack financial and human resources for the implementation and 90% of surveyed businesses announced their digital transformation has not been successful.

Only 11% of businesses succeeded in digital transformation, the remaining 89% were “lost” in the digital transformation process with four main reasons, including misperception and benefits of digital transformation unconnected with businesses’ goals, and a lack of necessary resources or favorable digital ecosystem. In addition, most small and micro enterprises believe that digital transformation is the “playground” of big businesses. 

VCCI Vice President Bui Trung Nghia assessed that, along with the rapid development of technology, the application of digital initiatives and digital technology solutions will help businesses add socio-economic values towards sustainable development. However, it has been said that the digital transformation process in Vietnam is facing many barriers due to the uneven business quality foundation, relatively low management level, inadequate digital technology supply, etc. Therefore, digital transformation requires drastic and innovative thinking and actions from management agencies as well as from businesses, organizations, and local authorities. Digital transformation is not only the investment in technology, but also transformation in terms of management, approach, and human resources.

According to the annual report on digital transformation in enterprises in 2022, up to 48.8% of businesses have undergone digital transformation but no longer continue because the solution is not suitable or is no longer appropriate in the current context of the businesses. There are many reasons leading to the above situation, but, according to experts, the first is due to the incorrect perception and thinking of business leaders about digital transformation. Many businesses have just used digital technology solutions for a short time, but because they found it ineffective or had to spend a lot of money on initial technology investment, they stopped deploying it.

According to calculations, the actual cost of technology in digital transformation in enterprises only accounts for about 20% of the total cost of digital transformation. The purchase of application software for business is not difficult, but the problem is to exploit its value. Thinking and understanding digital transformation is a decisive factor for the success of the digital transformation process in businesses. Therefore, business owners must master their internal problems and the implementation method should be based on the capacity and reality of each business to find and apply suitable, correct, and sufficient technology for enterprises.

After having a clear implementation process, businesses can work with partners on digital transformation, then they will also understand the problems of the businesses to come up with a plan for implementation in an appropriate and effective manner.

Source: Nhân Dân