The development of giga warehouses in China
China, known as the world’s leading manufacturing center, continues to improve and expand its logistics network. With the goal set for giga distribution centers to provide ultra-fast delivery services reaching the 24-hour and 12-hour delivery standards of the Chinese domestic e-commerce industry, they not only have a deep impact on the domestic e-commerce market but also spread to the Vietnamese market. The strategy of “warehouses closest to the customers, fastest delivery time” not only enhances the competitiveness of Chinese companies in the domestic market but also directly accesses 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 one hand, price competition becomes tougher when domestic businesses try to offer competitive prices to counter low product costs from Chinese sellers. On the other hand, rising customer expectations for fast delivery time create challenges for Vietnamese businesses in logistics management and supply chains.
In this context, Mr. Pham Bao Trung – Business Director of Metric believes this is an opportunity for Vietnamese businesses to develop. “The growth of foreign retailers in the Vietnamese e-commerce market will bring positive effects. This is an opportunity for domestic businesses to have the motivation to develop. However, the increasingly fierce competition requires Vietnamese businesses not only to accept the challenges but also to actively seek solutions: from innovating and improving product quality, optimizing supply chains, and fully exploiting customer data to expanding the market and exploring new opportunities in the e-commerce race.”
Enhancing competitiveness for Vietnamese businesses in the domestic e-commerce market
In the dynamic and competitive e-commerce market, many Vietnamese businesses have quickly adapted and established a strong position at home. Their success does not only come from outstanding operations on e-commerce platforms but also from proactively building flexible business strategies and enhancing brand image among Vietnamese consumers.
Especially in 2023, amidst intense competition from foreign brands, Vietnamese brands such as Vinamilk and ShopDunk have excellently made it into the top 10 highest-revenue businesses on e-commerce platforms. Vietnamese brands account for 40% of the top 10 businesses with the highest sales volume. This indicates that by deeply understanding the domestic market and applying flexible business strategies, innovation, Vietnamese brands not only survive but also develop strongly, asserting their position among Vietnamese consumers.
Applying Big Data and market data analysis not only as a tool to help businesses improve business performance but also as a key to make accurate and timely decisions. According to Mr. Pham Bao Trung – Business Director of Metric: “Data analysis provides businesses with a comprehensive picture, supporting accurate business decisions. Through the experience of supporting many brands on e-commerce platforms, Metric realizes the importance of early problem detection. Metric once assisted a fashion brand in identifying the cause of a 30% decline in sales volume in just one week, through market data analysis and realizing the competition from a new distributor with more impressive product images. Reacting promptly, the business improved its image and promotional program, quickly regaining market share.”
Many Vietnamese brands and distributors have experienced high growth by applying data analysis in business operations.
Furthermore, the success of Vietnamese businesses not only stops at strong operations on e-commerce platforms but also results from a multi-channel customer approach, from online to offline. For example, Cocoon – a Vietnamese brand, still maintains a position in the top 10 brands with the highest sales on Shopee in the beauty industry, a highly competitive sector. This demonstrates the power of combining point-of-sale with online sales activities, creating diverse touchpoints with customers and reinforcing a strong brand image.
In general, by proactively applying technology and implementing multi-channel marketing strategies, Vietnamese businesses have made a strong mark in the e-commerce market, enhancing competitiveness and increasing brand value at home, towards a future full of opportunities and new challenges.
To maintain and enhance competitive advantages, Vietnamese businesses need to apply the power of big data, analyze and understand customers. Skillfully applying this technology will open up new approaches, personalize products and services, helping Vietnamese businesses not only stand firm in the domestic market but also expand internationally.
