Cheap goods flood the Vietnamese market
Mr. Nguyen Hai (Nam Tu Liem, Hanoi) learned about Temu when he saw this page advertised on social networks. When clicking on it, Mr. Hai was invited by this e-commerce site to participate in a wheel spin showing different levels of product promotions, from 50% to 80%. When he landed on the 80% discount box - the highest discount, Mr. Hai was directed to Temu's online shopping application.
The link guides him to create an account to experience shopping with many great deals. He bought a pair of fashionable glasses for 445,000 VND, 75% off the original price of 1.7 million VND and had them delivered 3 days later.
"The normal price of Cyberpunk glasses is nearly 2 million VND, seeing that the price was too cheap, I bought it to try," said Mr. Hai. If you buy a few other items with a minimum payment of 120,000 VND, you will get free shipping, but you must pay by credit card or Apple Pay.
Temu is a cross-border e-commerce platform, founded by PDD Holdings (China), the world's largest online retailer today. Temu opened its sales feature in Vietnam and ran massive ads to users last week.
Temu's highlight compared to other e-commerce platforms is its very cheap product prices, thanks to its business model that connects manufacturers and customers directly, eliminating intermediary costs.
Most of Temu’s products come from Chinese manufacturers, where production costs are low and production is large. Temu’s parent company, PDD Holdings, also has a subsidy strategy, accepting low profits for each product sold, helping to keep product prices down.
"On the e-commerce platform Tiktok, shops sell a lot of Chinese products, from cosmetics, clothes, household goods to electronic products. During the live session selling "made in China" smartphone holders, there were nearly a hundred thousand orders; the same product, but domestic goods sold less because of the high price," said Mr. Dong - a seller on the social networking platform.
According to Mr. Dong, not only does this e-commerce platform regularly offer a series of vouchers and promotions to attract buyers, it is also attracting sellers with attractive discounts. "Great promotions are an important weapon for Tiktok Shop to attract buyers and sellers," said Mr. Dong.
Vietnamese goods must improve competitiveness
Talking to Lao Dong, Mr. Vu Vinh Phu - Chairman of Hanoi Supermarket Association said that with the advantages of subsidy policies, import tax (according to current regulations of the Government, imported goods into Vietnam but with a small value of less than 1 million VND sent via express delivery service are exempt from import tax - PV) transportation, along with a professional and modern logistics transportation system, leading to the competitiveness of Chinese goods in terms of price and transportation costs being quite large.
Recently, China has increased cross-border exports using digital platforms and e-commerce, including Tiktok shop, Shopee, Lazada, etc. Chinese businesses have set up warehouses in border areas, or have warehouses right in Vietnam. Therefore, Vietnamese businesses increasingly have to cope with competitive challenges.
"The penetration of Chinese goods with strengths across the border as mentioned above has turned the situation around, causing difficulties for Vietnamese goods," said Mr. Phu.
According to him, a shipment from China, especially with warehouses in border provinces or inland Vietnam, only takes about 2-3 days, plus diverse designs, low shipping costs... becoming an unequal competition between Vietnamese and Chinese goods.
Regarding solutions, Mr. Phu said that Vietnamese sellers need to improve the competitiveness of Vietnamese goods by improving product quality, improving packaging and labels according to foreign regulations; forming joint ventures to strengthen the Vietnamese business community, focusing on the domestic market associated with direct export, through e-commerce sites...
In addition, the State needs to support the construction of infrastructure: warehouses, traffic and means of transport, and apply new and advanced management technology to production and product consumption.
Along with that, businesses need to make efforts to be creative and innovative, taking advantage of the direction, support and advice of specialized ministries, branches and localities to effectively implement the above solutions, in order to gradually improve the balance of import and export of goods across borders on increasingly advanced e-commerce platforms, contributing to Vietnam's economic development in 2024 and the following years.
