Vietnam firms enjoy fastest Amazon sales growth in Southeast Asia

Can you give us an overview of cross-border e-commerce (CBEC) in Vietnam, including growth rate, user base, and number of Vietnamese businesses on Amazon? Which prominent businesses on Amazon have large orders and enjoy high revenues?

E-commerce is becoming an important pillar to help businesses recover and develop, contributing to the Vietnamese economy. If B2C e-commerce is considered an export industry, it will be the fifth largest export industry in Vietnam within the next five years.

According to the 2022 Vietnam E-commerce White Paper published by the Vietnam E-Commerce and Digital Economy Agency (IDEA) under the Ministry of Industry and Trade, Vietnam's retail e-commerce increased by 20% that year. Especially noteworthy is that 82% of the surveyed enterprises adopted e-commerce websites or applications to support their import-export activities. The recent boom in Vietnam's e-commerce has also promoted digital transformation, leading to a number of new policies that are being issued, put into practice, and improved in the e-commerce and cross-border e-commerce industries.

According to the "Local Sellers, Global Consumers 2022: Capturing Vietnam’s E-Commerce Export Opportunity" report released by Access Partnership, the value of cross-border e-commerce exports from Vietnam is estimated at around VND80 trillion ($3.32 billion) in 2022. Also, if domestic businesses are supported in accelerating the pace of online exports, the volume in Vietnam could potentially reach nearly VND300 trillion ($12.43 billion) by 2027.

Although 2022 was a year of numerous challenges amidst global uncertainties, the number of Vietnamese businesses participating on Amazon still experienced remarkable growth, by up to 80%. Moreover, the total export value recorded by Vietnamese enterprises through Amazon saw a notable increase of 45%. The significant rise in both the number of participating businesses and the export value from Vietnam on Amazon indicates the development of CBEC in Vietnam over the past years and the untapped potential that lies ahead.

We believe that traditional manufacturers, small and medium-sized enterprises (SMEs), as well as startup ventures with young brand owners can perceive this as a fresh driving force and swiftly align with this trend.

How does Vietnam's cross-border e-commerce landscape compare to other markets in the region such as Thailand, Cambodia, Indonesia, and Malaysia?

In the past 2-3 years, global sales through Amazon by Vietnamese businesses have achieved the highest growth rate in the region. According to a report by AlphaBeta, online exports or cross-border e-commerce represent a new opportunity for Vietnam, with significant growth potential in the next 5 years. The report forecasts an annual growth rate of over 20%.

Cross-border e-commerce presents the opportunity to entirely change businesses’ vision, operations and growth in the long term. It creates new value, not only for "Made-in-Vietnam", but also for the "Vietnamese Brand" in the international market.

What are the Vietnamese products that are currently popular on Amazon? What advantages do these products have that make them favored by customers?

The top 5 best-selling categories of Vietnamese businesses on Amazon for the past two years are kitchen, home, apparel, health and personal care products, and home improvement.

While home, furniture and kitchen categories took the lead for two years, there will be greater diversity in 2022 of products in these categories, including not only home decoration but also utility products. Living space upgrade products will have two main trends: wooden products; and woven bamboo and rattan-made products. This reflects the fact that Vietnam is currently the world's leading exporter of wooden furniture to the US market. The prominent wood-based tools, gadgets and home decoration products on Amazon that can be mentioned include outdoor furniture, wall products for house decoration or workspace.

Also, Vietnamese furniture and home decor products have a significant advantage in terms of using local raw materials and supply chains. Vietnam takes pride in having a considerable number of skilled artisans. Notably, Vietnam's traditional craft villages and woodworking workshops, with their rich experience and long history, infuse a unique and distinct character into Vietnamese handicraft and wooden products that is hard to find elsewhere in the world.

However, the global growth via Amazon is not limited to those product categories. Vietnam shows the potential to be a new emerging manufacturing hub of the world with abundant production capacity and very diverse product categories including furniture, handicrafts, textiles, fashion, industrial machinery, consumable products, technology, electronics and agricultural products.

Has Vietnam leveraged its advantage in agriculture to the maximum on Amazon? What aspects does the agricultural sector need to address and enhance in order to succeed better on Amazon?

Vietnam possesses a strong agricultural advantage, of course. On Amazon, we have already witnessed some agricultural and consumer goods that can embrace and benefit from this trend.

When it comes to CBEC, agricultural-related businesses should take "storage costs, long shelf life, and expiration dates" into careful consideration. Additionally, temperature differences across markets or seasons may affect product quality. Thus, fresh agricultural products or bulky items may not carry great advantages. Instead, there is potential for processed or dried agricultural products, including seeds, dried fruits, rice-based snacks or dried seaweed. Currently, sellers can access, refer to, and adhere to a set of guidelines on Amazon Seller Central to export various product categories to different markets.

In addition, it's been observed that local agricultural businesses tend to emphasize "Made-in-Vietnam" origin, which is, to some extent, not an optimal marketing approach for international customers. They are more favourably inclined toward specific, unique features and characteristics of products, such as organic ingredients or environmentally friendly packaging. In developed countries, it’s important to focus marketing efforts on what customers are seeking rather than what brands own and want to highlight. Then, we can weave in the story of the product's origin to add value for consumers.

Let's expand beyond traditional narratives and tell more globally relevant stories. This approach allows Vietnamese agricultural products to integrate into the current global trend, step by step, in a fair and equitable manner. It opens up opportunities for Vietnamese agricultural products and consumer goods in general on the stage of cross-border e-commerce.

What is Amazon doing to help Vietnamese businesses approach cross-border e-commerce?

Amazon Global Selling will focus on five business priorities in Vietnam: boosting awareness and readiness of Vietnamese SMEs for cross-border e-commerce; encouraging Vietnamese sellers to build and grow their global brands; driving awareness of Amazon global logistics solutions; improving sellers experiences by sharing updates and education content on Amazon Marketplace; and engaging with more business-entrepreneur communities to assist with accessing and applying cross-border e-commerce. Amazon Global Selling will stand with and empower Vietnamese businesses to achieve long-term growth and pave the way for global Vietnamese brands.

What conditions do businesses need to meet to sell their products and services on Amazon?

The first thing that they have to do is observe, research, and focus on customers. A special feature of e-commerce is the feedback of buyers. Sellers are ranked on the basis of reviews. With such information, Amazon is completely ready to provide customer insights for sellers to update or reach customers through customer service. In today's customer-centric digital world, the key to business success lies in whether a business can understand and quickly meet the ever-changing needs of consumers. The success of Sunhouse, Lafooco, and Longevity Seagrapes are specific examples.

The second thing is to understand the industry, consumer trends and business capabilities to select product niches with high demand that are suitable for SMEs. SMEs should always pay attention to product quality and ensure compliance with standards and laws for the product line in the target market.

Thirdly, it is necessary for enterprises to invest in branding and build a global brand for their products, as well as ensure brand protection.

How has your company fared amid the various fluctuations in the world market? Has it been significantly affected by the current global situation?

Vietnam is among the first countries to reopen its borders after two years of the pandemic. Soon after, with the government's support and the cooperation of numerous parties, Vietnamese enterprises ramped up their recovery journey. However, to some extent, Vietnam's economy is still weathering a number of global challenges due to supply chain disruptions, fluctuating gasoline prices and a drastic post-pandemic change in online shopping habits and demands.

The environment will continue to change, but we are optimistic about growth. Cross-border e-commerce has the potential to significantly change how businesses are formed, operate and grow. This new digital trade format creates new value on the global market and allows "made-in-Vietnam" products to become "global brands from Vietnam''. Cross-border e-commerce enabled by technology and innovation can help businesses develop long-term visions and the ability to adapt quickly to market developments. Digital transformation will also promote equality, drive business competitiveness, and boost an open and circular economy around the world.

We do not have an official summary for our 2023 performance. However, we can still see positive growth signals in the number of local businesses participating on Amazon and the business growth of Vietnamese enterprises in Amazon's stores in international markets.