Connect with us


Vietnam needs better smart city management, implementation



Vietnam’s urban areas have been developing rapidly with the urbanization rate increasing from 19.6 percent (629 urban areas in 2009) to about 39.2 percent (835 in December 2019).

As of March 2020, 35 central cities and provinces had signed strategic cooperation agreements with telecom groups on building smart cities.

Vietnam needs better smart city management, implementation

The military telco Viettel has signed cooperation agreements with 24 localities, and  the Vietnam Post and Telecommunication Group (VNPT) with 20 localities.

The government of Vietnam is paying increasingly high attention to developing smart cities. Many agreements have been signed between Vietnam and important partners such as countries and organizations that have successfully developed smart cities, including the Netherlands, South Korea and India.

Most recently, an agreement was signed to develop the ASEAN smart urban network.

After Vietnam joined ASCN (ASEAN Smart Cities Network) in 2018, the Prime Minister released the Vietnam Smart City Development project in 2018-2025 with a vision until 2030, which shows three priority parts – programming smart cities; managing smart cities; and smart urban utilities.

On the basis of a linked database, many cities in Vietnam have had initial success in providing smart utilities in the fields of education, healthcare, transportation, construction environment… and have step by step been optimizing urban management, improving the quality of urban residential life and creating opportunities for human development, leaving no one behind.

Hanoi, for example, is developing a parking system that allows people to find suitable parking places; payment through apps on smartphones; and a digital transport map to manage urban traffic.

Vietnam’s urban areas have been developing rapidly with the urbanization rate increasing from 19.6 percent (629 urban areas in 2009) to about 39.2 percent (835 in December 2019).

The implementation of the project on Bac Ha Noi (Northern Hanoi) Smart City, covering an area of 272 hectares in Dong Anh district, is expected to improve transport infrastructure, energy, education, healthcare and environment on a digital technology basis, driving development towards sustainability.

Meanwhile, HCM City is building a big data infrastructure system, data control center, security control center and open data system. It is planning to build smart solutions for healthcare, food safety, education, traffic management, and flood control.

As for Da Nang, the city leads the country in readiness for ICT development and application. Da Nang has received the maximum mark in applying IT in state agencies. In 2018, the Da Nang People’s Committee issued the Overall Architecture of Smart City and Smart City Construction Plan for 2018-2025.

Minister of Construction Pham Hong Ha said developing smart cities is in line with international trends, takes full advantage of the achievements of the fourth industry revolution, and fits the country’s development practice.

Driving force for smart city development

Experts, while stressing the need to develop smart cities, pointed out that the lack of reasonable policies will make it difficult for local authorities to seek resources, especially capital from state budget, for smart city development.

They believe that Vietnam needs to be cautious when developing smart cities, and not ‘follow the crowd’.

Each city, before applying a smart city model, needs to check its resources and advantages, and detect where and what it needs to obtain in each development stage so as to effectively use existing facilities and investment resources.

Smart cities should be developed with people in the center, and be based on specific characteristics of each city.

Ha said Vietnam will implement the tasks and solutions set in the Vietnam Smart City Development project in 2018-2025.

These include a legal framework for the development of smart cities as well as management of tools, institutions and mechanisms for cooperation between ministries and branches, between the central and local government, to ensure smart cities throughout the country and avoid waste in using resources.

According to Nguyen Van Binh, head of the Central Economic Commission, leading experts believe that 4,0 industry is essentially an institutional revolution. The revolutionary nature is the strong development of science and technology.

Binh said it is necessary to have an ‘open and creative’ approach when developing smart cities.

The mindset that has existed for a long time is that the state should prohibit activities that it cannot control.

“The 4.0 industry revolution won’t succeed if the ‘prohibiting all that is unmanageable’ way of thinking is still applied to manage the economy and society,” he said. 

Duy Anh



Vietnam’s mobile money trial program to be extended till 2024

Mobile phone accounts can now be used to pay for low-value goods and services until the end of next year.



Authorities told the State Bank of Vietnam to review and report to higher ups before May 2024 the release of legal papers related to Mobile Money services. 

They were to work with the Ministry of Information and Communications, the Ministry of Public Security, the Ministry of Justice, and other relevant agencies.

To make the government work better, Deputy Prime Minister Le Minh Khai asked these ministries and other related groups to take steps to make sure that the pilot use of the service follows the rules that are already in place.

The head of the Vietnamese government had earlier said that the Mobile Money service could be tested across the whole country for two years, starting on March 9, 2021.

Customers of this service can use their cell phone accounts to do a variety of things, like pay for low-value goods and services, send money, top up their phones, withdraw money, and more, all without a bank account, a smartphone, or an Internet link.

According to statistics from the Ministry of Information and Communications, more than 3.9 million people used Mobile Money in the first five months of the year. This is three times as many as used the service during the same time last year.


Continue Reading


Chinese low-cost e-commerce battle lands in Vietnam

Global online shopping activity is being disrupted by the massive “discharge” of items from Chinese factories onto e-commerce platforms.



The “online Silk Road” in China has the same high-quality goods that these Southeast Asian countries can buy, but the prices are much lower and the shipping costs are surprisingly low.


Within a week, the four phone cases that Kieu Nam (Phu Nhuan district, Ho Chi Minh City) had ordered on Shopee as cross-border goods finally arrived. Including the shipping fee, the total value of the order is VND110,000, calculating that each case costs 25,000 VND, nearly half less than if purchased at the store.
Quynh Nhu (District 2, Ho Chi Minh City) said that in the past 2 years, cross-border stores have begun to be popular on Shopee and Lazada, but most are still low-value products.

For higher-value products, such as fashion, Quynh Nhu said she would order directly through Taobao in China. The recipient of the order will be a Vietnamese living near the border gates.

Even though they charge a fee for picking up the goods, taking them across China to the border gate, and then taking them to where the order is placed, as in the case of Quynh Nhu in Ho Chi Minh City, the total cost is still less than the price of the product.

Same fabric quality, about 30% design in Vietnam. One bad thing about cross-border goods is that they take 7–10 days to deliver. “That’s not a big obstacle. I will schedule a reservation,” Ms. Quynh Nhu said.
In the future, Chinese sellers will cooperate more with e-commerce platforms in their home country. There is an incentive for Chinese traders to step up such cooperation.

Mckinsey’s research predicts that 80% of GMV will be imported from outside Southeast Asia by 2021, with China playing a significant role. Momentum Works predicts e-commerce development in Southeast Asia to reach $232 billion in 2028, with Temu, Alibaba, and TikTok contributing to the worst scenario at $175 billion.


Chinese traders plan to expand into regional markets like Vietnam to maximize profits. Directly shipping from Chinese platforms to Vietnam yields a 10% profit, but combining with popular Vietnamese e-commerce platforms can increase it by 5%. The key to this strategy lies in low delivery costs, as domestic packages in China cost less than VND10,000, despite longer transportation distances.

The Chinese government made this plan 10 years ago. Economic Information Daily says that China’s logistics costs made up 18% of its GDP in 2013, which is more than twice as much as other OECD countries.

Experts point out that the cost of transporting goods in urban areas accounts for 30% of the total logistics costs of the entire industry. This has been a consequence since 1991, when China’s average logistics cost growth rate was 14.8% while GDP increased only 10.7%.

Urban expansion in Shanghai leads to increased transportation demand, but the lack of public supply and demand information-sharing platforms hinders truck operators’ capacity. Empty trucks accounted for 37% of the city’s total trucks in 2011, three times higher than in Europe and America. High logistics costs include tolls and fines.

The Chinese government implemented policies to reduce transportation costs, standardize logistics facilities, and reduce tax rates for the logistics industry. These included standardizing pallets, replacing business tax with value-added tax, compensating road tolls, and encouraging land use. The Ministry of Trade also promoted information technology applications in the industry.


In 2016, logistics costs per GDP decreased by nearly 4 percentage points, largely due to NDRC policies reducing taxes and fees for companies, enabling easier capital access.

China aims to reduce the logistics cost/GDP ratio to 12% by 2025, saving industries over 900 billion yuan ($135 billion) annually.

China is optimizing domestic logistics costs and promoting cross-border sales in Southeast Asia. Vietnam’s Ministry of Industry and Trade plans 53 warehouses in six provinces by 2025 to 2035, covering over 1.2 million m2. With a global factory position and 2/3 of popular e-commerce platforms, China’s goods are increasing, making it easier to penetrate regional countries.

The country has long been a global exporter of many consumer products and is now expanding this influence faster and more widely through its e-commerce platforms, even shaking up shopping activities. online globally.

Chinese manufacturers are reducing prices and attempting to penetrate foreign markets due to weak domestic demand. Local governments are subsidizing overseas trips and urging banks to lend to companies expanding in countries participating in China’s “Belt and Road” initiative.

Indonesia’s government has banned e-commerce transactions on social media platforms and regulated foreign goods to have a minimum price of $100, aiming to protect domestic businesses from cross-border goods and ensure fair competition while protecting user data.

With the largest e-commerce market size in Southeast Asia (more than $50 billion in 2022, according to Momentum Works), Indonesia’s actions are intended to prevent new e-commerce platforms such as TikTok, according to comments.

According to market research company BMI, there is an opportunity for growth in this country. The competition between GoTo, a “homegrown” e-commerce platform formed from the merger between two other domestic businesses, Tokopedia and Gojek, with Shopee and Alibaba is more than enough in the current context.

The Indonesian Government proposes a domestic ban to safeguard 64 million micro, small, and medium-sized enterprises, despite mixed reactions from small businesses, aiming to protect them.

TikTok business owners are profiting but need to cut human resources. Traditional traders are improving but not reaching the same level. E-commerce platforms like Tokopedia and Shopee disrupt traditional market activities due to transparent prices. 

Meanwhile, others are concerned that importing goods at competitive prices from world factories will affect the domestic manufacturing sector, which is supporting many working families. The growth in the commercial sector is there, but its consequences for the production sector are immeasurable.
A McKinsey report suggests that trade agreements like the Regional Comprehensive Economic Partnership Agreement will boost production and supply chains, particularly in the garment, consumer electronics, and food sectors.


Southeast Asia’s e-commerce growth and lower labor costs are attracting foreign investors, prompting the Indonesian Government to create protective barriers against cross-border e-commerce. This can teach other countries, including Vietnam, to optimize operations and adapt to new business paces, as returning to pre-e-commerce times is impossible.

The low-cost e-commerce market, characterized by stagnant incomes and economic instability, is causing concern for Vietnamese businesses and small businesses, as low-cost platforms struggle to develop strongly.

Competitive prices and easy ordering are benefits that cross-border goods bring to Vietnamese consumers but put great pressure on domestic businesses. “The fashion industry is changing profoundly,” said Mr. Dao The Vinh, founder of 8-year-old fashion brand Midori.

E-commerce and cross-border goods have significantly impacted domestic fashion brands’ production capabilities and cost optimization. Midori must adapt to new trends by focusing on design teams, optimizing materials, and changing production processes to meet small but continuous orders. This allows customers to place orders on e-commerce platforms within 2 hours. 

Midori, a Vietnamese company, has reduced its retail chain size by 2/3, reducing revenue contribution from over 20 stores. The fast-changing fashion industry has put pressure on costs and efficiency. Julyhouse, a natural essential oil business, continues to optimize costs in a competitive context, despite not yet having a strong domestic customer base.

Julyhouse, a Vietnamese FMCG startup, is aiming to maintain competitive raw material costs by partnering with farm-based suppliers and supplying product bottles themselves.

The company is distributing goods through retail channels and e-commerce platforms. Julyhouse is also investing in brand retention and social commerce technology to make it easier for consumers to forget brands. The company’s revenue ratio is approaching 70% online and 30% offline.

Regardless, shoppers like Kieu Nam and Quynh Nhu are still benefiting from hunting for cheap items from anywhere. Consumption habits associated with cheap goods and the current macro environment are paving the way for a price race, which will create notable changes for shoppers as well as e-commerce platforms. representative of a Vietnamese e-commerce platform comments.


Continue Reading


Winning at e-commerce, TikTok enters the delivery market

It wouldn’t be surprising when TikTok entered the e-commerce delivery space.



Ms. Ngoc Phuong placed an electronic order from TikTok Shop in Ho Chi Minh City, expecting a delivery time of 4 days. However, she switched to another e-commerce platform and received the product two days later.

Mandatory delivery is always a problem for e-commerce platforms with a large number of orders, especially TikTok Shop (part of the short video social network TikTok), which has surpassed Lazada to become the e-commerce platform with the largest market share in Vietnam in the second quarter of 2023, according to Metric.

Looking at the region, according to Momentum Works, TikTok Shop could account for 13.2% of the Southeast Asia market share by the end of this year, closely following Tokopedia (forecast to account for 13.9% market share), not too far away from Lazada (estimated to be 13.9% market share). accounting for 17.7%), even though it has only been in the market for 1 year.

It can be seen that most of TikTok Shop’s competitors have invested in affiliated delivery companies such as Shopee with Shopee Express and Lazada with Lazada Logistics. Even the competitor ranked at the bottom of Vietnam’s e-commerce rankings in terms of market share, Tiki, has its delivery team, TikiNOW. Meanwhile, TikTok Shop currently only uses J&T Express as its sole delivery partner, handling up to 90% of TikTok Shop’s orders in Southeast Asia.

There are many reasons why e-commerce platforms are forced to own delivery companies because, in addition to optimizing costs, they also reduce order cancellation rates by improving service quality.

Statista reported on the reasons affecting the ability to “close orders” in Vietnam in 2021: delivery service price and delivery service quality, accounting for 40% and 30% of survey respondents’ reasons, respectively. The report also shows that the return rate as a percentage of online orders in Vietnam in 2023 will be 6.4%, down nearly 2 percentage points compared to 2021 and more than 3 percentage points compared to the peak of this year.

Note that this survey was taken from units that account for the majority of Vietnam’s e-commerce market share, and most of them have delivery units. The refund rate of the livestream group, the branch where TikTok Shop is leading the market, does not yet have specific statistics because it is too new and the number may not be accurate due to the influence of price subsidy policies that change buying habits. customer shopping.

But in the end, the ability to close an order still depends on delivery time and service. Therefore, investing in delivery units to improve is a predictable step for TikTok, especially when rapid growth in China and Southeast Asia is putting pressure on the company’s shipping process. Responding to Tech In Asia, Mr. Roshan Raj, partner at Redseer Strategy Consultants, said: “Any serious e-commerce effort needs in-house logistics capabilities.”

Douyin, the Chinese version of TikTok, has invested in Jisuda since 2020 to offer delivery within and outside the city in two days. This move is due to the company’s logistics services being far behind those of and Alibaba. The rapid growth rate in a short period is a strength but also a weakness for TikTok Shop, as the time to invest in large delivery units is limited. Strategic investments could provide an advantage.

TikTok’s parent company, ByteDance, has invested $40 million in iMile Delivery in 2021 to serve the Middle East delivery market. Rumors suggest TikTok may invest in a struggling food delivery unit in the Vietnamese market. The Chinese market is concentrated with clear potential and pressure, with Douyin’s food delivery revenue reaching 13.8 billion USD in the first six months of 2023. However, this is less than half that of Meituan, which owns 6.4 million food delivery people and 9.3 million sellers on its platform as of April 2023.

Meituan is expanding into livestream sales to compete with Douyin and protect its market share in the Chinese market. To compete with Southeast Asian competitors like Lazada and Shopee, TikTok needs a regional-scale commercial delivery unit to compete with companies serving the fragmented food delivery market, which is less attractive than China.

Looking back over the past 3 years, the Southeast Asian market has witnessed delivery companies that always aim to expand into the region, such as Best, Ninja Van, and J&T Express. 

In 2021, J&T Express acquired Best’s operations in China to expand its influence in this market. In addition, among them, only J&T Express has expanded its services to the US market since the end of last year. 

Citing Reuters, TikTok also started a sales program for Chinese merchants in the US market a few months ago. Therefore, it is not surprising if one day TikTok announces its entry into the delivery market. But a representative from TikTok Vietnam refused to say anything about this.


Continue Reading