Solution for local e-commerce platforms against foreign sellers’ competition

In an era of rapid global e-commerce development, Vietnamese businesses are facing challenges from the expansion of international retailers, especially giant warehouses from China. This has intensified competition in terms of pricing and delivery speed, necessitating a strategic reconfiguration for domestic e-commerce businesses.

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The development of giga warehouses in China

China, considered as the world’s leading manufacturing hub, is continuously improving and expanding its logistics network. With the goal set for giga distribution centers to provide super-fast delivery services, achieving the industry standards of 24-hour and 12-hour delivery for domestic e-commerce in China, they not only have a profound impact on the domestic e-commerce market but also extend their reach to the Vietnamese market. The strategy of “warehouses closest to the buyers, fastest delivery time” not only enhances the competitiveness of Chinese companies domestically but also directly reaches Vietnamese customers, while significantly reducing transportation costs and waiting time for orders.

This development significantly affects Vietnamese e-commerce businesses in two main aspects. On the one hand, price competition becomes more fierce as domestic companies strive to offer competitive prices to compete with low-priced products from Chinese sellers. On the other hand, increased customer expectations for fast delivery time pose challenges for Vietnamese companies in managing logistics and supply chains.

In this context, Mr. Pham Bao Trung – Business Director of Metric, believes that this is an opportunity for Vietnamese companies to develop. “The rapid growth of foreign sellers in the Vietnamese e-commerce market will bring positive effects. This is an opportunity for domestic companies to have the motivation to develop. However, increasing competition requires Vietnamese companies to not only accept the challenges but also actively seek solutions: from innovation and improving product quality, optimizing supply chain efficiency, maximizing customer data, to expanding the market and exploring new opportunities in the e-commerce race.”

Enhancing competitiveness for Vietnamese companies in the domestic e-commerce arena

In the vibrant and competitive e-commerce market, many Vietnamese companies have quickly adapted and established a strong presence in their home turf. Their success is not only due to excellent performance on e-commerce platforms but also thanks to actively building flexible business strategies and enhancing brand image among Vietnamese consumers.

Especially in 2023, amidst fierce competition from foreign brands, Vietnamese brands such as Vinamilk and ShopDunk have successfully made it to the top 10 companies with the highest revenue on e-commerce platforms. Vietnamese brands account for up to 40% of the top 10 companies with the highest sales volume. This shows that by deeply understanding the domestic market and applying flexible business strategies and innovation, Vietnamese brands can not only survive but also thrive, affirming their position in the hearts of Vietnamese consumers.

Applying Big Data and market data analysis is not only a tool to help businesses improve their business performance but also a key to making accurate and timely decisions. According to Mr. Pham Bao Trung – Business Director of Metric: “Data analysis gives businesses an overall picture, supporting accurate business decisions. Through experience in supporting many brands on e-commerce platforms, Metric realizes the importance of early problem detection. Metric has supported a fashion brand in identifying the cause of a 30% drop in sales in just one week, through market data analysis and recognizing the competition from a new distributor with more impressive product images. With quick reaction, the business improved its image and promotion program, quickly regaining market share.”

Many Vietnamese companies and distributors have achieved high growth by applying data analysis to their business operations.

Furthermore, the success of Vietnamese companies goes beyond their strong operation on e-commerce channels but also thanks to their omnichannel customer approach, from online to offline. For example, Cocoon – a Vietnamese brand, still maintains a strong position among the top 10 beauty brands with the highest sales on Shopee, a highly competitive sector. This demonstrates the power of combining point-of-sale and online sales activities, creating diverse touchpoints with customers and strengthening the brand image.

In general, by proactively applying technology and implementing multi-channel marketing strategies, Vietnamese companies have made a strong impression in the e-commerce market, enhancing competitiveness and raising the value of their brands on their home turf, working towards a future of new opportunities and challenges.

To maintain and enhance their competitive advantage, Vietnamese companies need to utilize the power of big data, analyze and understand customers. Skillful application of this technology will open up new approaches, personalize products and services, helping Vietnamese companies not only stand firm in the domestic market but also expand internationally.

SOURCEcafef
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