The European Union presents a vast cross-border e-commerce market, but Vietnamese businesses’ participation in exporting to Europe through international trading platforms remains significantly lower than in other regions, a recent report revealed.
E-commerce is transforming global trade, especially in the post-pandemic era, according to findings presented at a seminar titled ‘E-commerce Trends in the World and Implications for EU-Vietnam Trade’, organized by the Vietnam Institute for Development Strategies and the Konrad-Adenauer-Stiftung Institute Vietnam (KAS). The seminar took place on Thursday.
While global trade growth has slowed, with an annual average of 2-5% over the past few years and even a decline of 1.3% in 2023, e-commerce has surged, growing by around 20% post-pandemic. Currently, online retail sales account for 20% of total global retail sales, up from 17% in 2019, and are projected to reach 24.5% by 2025. Notably, cross-border transactions contribute 22% to global e-commerce revenue.
The EU ranks as the world’s third-largest e-commerce market, with online shopping participation among internet users rising from 66% in 2018 to 76% in 2023.
Since the EU-Vietnam Free Trade Agreement (EVFTA) came into effect, trade between Vietnam and the EU has grown steadily, with export growth averaging 8.1% between 2021 and 2023. Vietnamese businesses have begun exploring e-commerce opportunities with the EU, further enhancing trade relations.
“The EU and Việt Nam have made significant strides in promoting bilateral trade through the EVFTA. E-commerce serves as a powerful tool to leverage this agreement, fostering increased trade and mutual benefits,” said Florian Feyerabend, KAS Resident Representative. He emphasized that emerging trade trends, particularly in e-commerce, will further strengthen relations between the two regions in the future.
Despite the EU’s strong e-commerce market, Vietnamese businesses are underrepresented on international trading platforms in Europe. Out of over 10,000 Vietnamese businesses using platforms like Amazon for exports, only 10% target the European market.
The report identified several challenges for Vietnamese exporters, including the EU’s high-quality standards, environmental concerns, complex purchasing habits, and stringent legal frameworks. Additionally, Vietnam’s domestic support policies for businesses navigating these hurdles remain unclear.
To boost Vietnamese businesses’ presence in the EU e-commerce market, the report recommends that the Government introduce tailored incentives for cross-border e-commerce on international platforms. It also suggests strengthening programs that help businesses leverage the EVFTA via e-commerce and improving connections between Vietnamese and European enterprises.
Other key areas for improvement include establishing national standards for product origin tracing, enhancing legal frameworks for source verification, and investing in cross-border logistics and trade infrastructure.
Sita Zimpel, Project Director of ASEAN SME II at GIZ, highlighted the importance of compliance with strict EU requirements, especially in ethical business practices. “Transparency and traceability are key obligations for sellers, while platform responsibility, which includes countering illegal products also from abroad, is equally crucial,” she stated.
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