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Vietnam is one of the fastest growing e-commerce countries
Vietnam is considered one of the fastest growing e-commerce markets in Southeast Asia.
Along with the explosion of E-commerce, logistics plays an important role in the trading process from seller to buyer.
As a result, E-commerce and logistics have a close connection and effective support for each other.
In 2018, Amazon entered Vietnam to help small and medium enterprises (SMEs) to export goods.
The speed of delivery product dramatically increase as well as good quality to both customers and sellers.
As the market continues to grow, it is increasingly clear that the long-term prospects of Vietnamese E-commerce is based on developing good logistics system.
Logistics in E-commerce
During 2019, Southeast Asian E-commerce which were reported by Google, Temasek and Brain&Company, showed that the average growth rate for the whole period 2015-2025 of Vietnam’s E-commerce is 29%.
In addition, by 2025, Vietnam’s E-commerce scale will reach 43 billion USD and rank third in ASEAN.
Especially, in the peak months when the world was fighting the Covid-19 epidemic of 2020, consumers’ purchasing behavior had huge change when it quickly switched from direct shopping to online shopping.
Online shopping has 2 groups of specific products for exchange.
The first group is intangible products that can be digitized and transferred on the internet platform such as music products, computer software, games and online game utilities.
The second group is tangible, weight, volume, and non-digitizable products such as clothing, tools, household appliances, electronic equipment, refrigeration, etc.
Although transactions are done on the network, logistics and delivery services are indispensable for fulfill orders for tangible products on E-commerce.
E-commerce is driven factor for logistics development
In the context that Vietnam’s economy is increasingly integrated and open, the volume of goods in circulation is constantly increasing, the demand of consumers also increase, which has led to the growth of logistics.
The data from the General Statistics Office shows that, in 2019, cargo transport services reached 1,684.1 million tons, more 9.7% than the previous year. It included domestic transport reached 1,650 million tons, increased 9. 8%, foreign transport reached 34.1 million tons, up 4.3%.
In 2020, although transport activities are heavily influenced by Covid-19 pandemic, the decrease of cargo transport wasn’t affected to much compare with other fields.
During the peak time – against the epidemic period from February to April, the consumption and shopping habits of consumers from direct purchasing to online shopping had a drastic change.
E-commerce sites such as Tiki, Sendo, Lazada, Shopee… were more popular. It helped the logistics department not to be affected heavily by the epidemic.
Thus, E-commerce plays a role in enhancing logistics resilience, while logistics is an integral part of the E-commerce supply chain.
Challenges in Ecommerce industry
Despite being a growing field, the logistics sector in Vietnam also has many challenges to face.
Companies like Lazada that has its own delivery networks also have limitations.
Even with its own logistics network, it still has to rely on 3PL partners to fulfill orders based on the needs of customers
Besides, Vietnam is primarily cash economy which means most transactions being done in cash for payment.
E-commerce companies are forced to rely on COD. It causes higher operating costs.
Firms also face product returns, exchanges, and procduct damage.
In addition, 75% of daily E-commerce orders are transacted in Hanoi and Ho Chi Minh City where have a lot of traffic that causes increasing costs.
Moreover, the legal framework and regulations related to logistics are still difficult and complicated.
Last-mile delivery issues that deliver goods to rural areas is a challenge.
YEN NHI
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