Sita Zimpel, project director of ASEAN SME II at German International Cooperation (GIZ). — VNS Photo Ly Ly Cao
The rise of digital economies and the growth of e-commerce present significant opportunities for Vietnamese businesses, including small and medium enterprises, to expand into the European Union market.
Since the pandemic, both consumers and companies have increasingly shifted to online practices. Việt Nam News reporter Ly Ly Cao spoke to Sita Zimpel, project director of ASEAN SME II at German International Cooperation (GIZ), to learn more about the prospects of the industry for Vietnamese businesses.
What are the opportunities for Vietnamese businesses looking to expand their cross-border e-commerce trade with the EU, and which product categories show the most export potential?
Since the onset of the pandemic, there has been a notable shift towards online practices among businesses and consumers, especially in cross-border trade. The European Union has solidified its position as the third largest e-commerce market globally, while Việt Nam stands out as the fastest-growing digital economy within the ASEAN region.
This shift presents numerous opportunities for Vietnamese businesses to engage in cross-regional trade. Platforms such as Amazon, Zalando and eBay offer tailored storefronts for each country, providing a conducive environment for selling products.
Việt Nam boasts significant potential in various export sectors, both offline and online. Products like furniture, food items, coffee, textiles and fashion hold promise for international trade ventures.
To capitalise on these opportunities, it is crucial for Vietnamese businesses to adhere to the EU's established framework and evolving legislation governing e-commerce activities.
In your opinion, what are the most difficult barriers for Vietnamese products sold through e-commerce channels to Europe?
For any business aiming to expand into a new market, addressing logistical challenges is crucial. This includes decisions on shipping providers and understanding warehousing options in both the target market and the home country.
Specifically focusing on the European e-commerce landscape, being mindful of regulatory advancements is paramount. The EU places a strong emphasis on consumer protection, ensuring that products comply with safety, quality and privacy standards.
Regulations like the General Data Protection Regulation (GDPR) are essential for Vietnamese businesses to grasp. Additionally, the introduction of the new product safety regulation this year adds further requirements for businesses.
Understanding European consumers who prioritise social responsibility, sustainability, and fairness is vital for carving out a niche and establishing a reputable brand in this market.
Consequently, thorough research and compliance with regulatory standards are imperative for businesses looking to succeed in the European market.
How does Việt Nam’s competitive position in cross-border trade compare with that of other countries in the region?
Other countries, such as Thailand, are strong competitors to Việt Nam. Thailand's emphasis on sustainability, especially in fruit processing and exports, positions them favourably. They have established eco-labelling and certifications that facilitate easier access to global markets, including the EU.
China, on the other hand, stands out as a dominant force, particularly in terms of sheer numbers and global e-commerce growth. However, there is ongoing debate among consumers and businesses about whether Chinese products comply with stringent safety, privacy and other standards.
Are there any chances for SMEs to participate in this sector?
Small companies play a crucial role in supply and value chains, as evidenced in products like sustainably sourced coconut oil and coffee, areas where Vietnamese businesses can excel. Collaboration among SMEs can enhance their market presence.
To support SMEs, there is a need for increased services, training and capacity building from the Government, private sector and larger corporations to integrate them into broader networks, supply chains and e-commerce markets.
While sustainability may not be a top priority for SMEs focused on survival, consumer perceptions of responsibility and fairness impact market longevity. The growing demand for sustainability, particularly in ASEAN's urban middle class, presents opportunities for businesses to cater to environmentally conscious consumers.
In essence, focusing on niche products related to sustainability can be a strategic move for Vietnamese businesses in this evolving landscape. — VNS