The Dark Side of E-commerce: Unveiling the Illicit Trade on Online Marketplaces

E-commerce Platform: Only 2% of Goods are Authentic

On June 11th, at a seminar organized by Thanh Nien newspaper, titled “Eradicating Counterfeit and Substandard Goods: Protecting Consumers and Enterprises,” Mr. Huynh Duc Trong, Director of Khanh Hoa Bird’s Nest Company’s Ho Chi Minh City branch, revealed that their company has suffered significant losses due to rampant counterfeiting. Several business households have had to shut down due to tax inspections and crackdowns on counterfeit and substandard goods, paralyzing their operations. This indicates a vast presence of fake products in the market.

According to Mr. Trong, many people are aware of the low quality of some bird’s nest products but still purchase them. He shared an insider saying in the bird’s nest industry: “The buyers don’t use it, and the users don’t buy it.” In reality, quite a few people buy cheap bird’s nest products to give as gifts, while not consuming those products themselves.” – Mr. Trong added.

Ms. Tran Thi Hong Nhung, Development Director of Share Milk Company, pointed out the immeasurable dangers of counterfeit and substandard milk products. However, many parents still buy such products due to their low prices, their preference for imported goods, or the attraction of promotional gifts. For example, buying five cans of milk for a baby and receiving an electric rice cooker as a gift. The mother purchases the milk solely for the cooker. “This is why counterfeit and substandard milk products continue to exist and have a significant customer base,” Ms. Nhung explained.

Mr. Nguyen Ngoc Dung, Chairman of the Vietnam E-Commerce Association, acknowledged that for a long time, we have been surrounded by counterfeit goods. To the extent that when the Ministry of Industry and Trade inspected the e-commerce platforms, the chairpersons and directors of these platforms confided to the association that if the inspections were too stringent, only 2% of the goods on the platforms would be authentic. This implies that almost everyone is selling counterfeit and substandard goods.

International Financial Center: A ‘Rich Man’s Game’

On June 12th, the National Assembly discussed the draft resolution on the International Financial Center in Vietnam during a hall meeting.

At the discussion, Deputy Nguyen Quang Huan (Binh Duong) stated that establishing an international financial center is a necessary condition for Vietnam to take off alongside the development of international finance.

According to him, financial investors and experts believe that with Vietnam’s economic growth and favorable geographical location, the country has the potential to develop a regional-level financial center, attracting the attention of international investors and the financial community.

However, the deputy suggested that having two centers in different cities requires careful consideration. This would entail parallel infrastructure investments in both locations, while Vietnam’s land area and resources are not unlimited. Moreover, sharing the financial ecosystem between the two localities is not straightforward.

According to Deputy Nguyen Van Than (Thai Binh), the international financial center is a ‘rich man’s game,’ catering to those with strong financial resources. Therefore, the requirement is for a truly harmonious, specific, and clear financial ecosystem.

“This is an open playground; they can come and go as they please. Meanwhile, we have to invest from the outset, which demands caution,” Mr. Than said.

Forecast of a Significant Increase in Non-Performing Loans

According to Vietnam Report’s report, the bad debt ratio at commercial banks peaked in the third quarter of 2023 and was partially curbed with the issuance of Circular No. 02/2023 by the State Bank.

In 2024, bad debts started to cool down as loans were restructured, interest rates stabilized at low levels, and businesses recovered, with the bad debt ratio hovering around 1.93-2.22%.

Substandard and doubtful debts (debt groups 3 and 4) also fluctuated but did not surpass the peak of 2023.

Notably, some banks had bad debt ratios above 4%, and exceptionally, one bank recorded a bad debt ratio of over 14% in the first quarter, although this figure had decreased from 35.3% in the first quarter of 2024.

In terms of value, the total bad debts of commercial banks exceeded VND 300 trillion at the end of the first quarter of this year, up 16.8% compared to the same period in 2024 and up 13.4% compared to the beginning of the year.

In reality, the bad debt ratio in the first quarter of 2025 slightly increased compared to the previous quarter, but the structure within the bad debt groups showed a significant change, with group 5 debts (loss potential) reaching a record high of 1.25% of total customer loans, over VND 176 trillion, up 10.7% from the beginning of the year and higher than the total bad debt figure at the end of 2022.

Key Reason Behind the Closure of Many Small Businesses

Decree 70/2025/ND-CP, which took effect on June 1st, stipulates that business households nationwide must switch to issuing e-invoices created by cash registers. According to the regulations, goods for sale must have invoices, proof of origin, etc. However, as many small businesses source their goods from various small-scale suppliers who cannot provide complete documentation, the new regulation has made it impossible for them to sell their existing inventory, forcing them to close their doors temporarily.

Reports from Tien Phong correspondents in some markets and business streets in Hanoi show that many small business owners are anxious and have chosen to close their shops or operate cautiously, waiting to see how the situation unfolds. They fear that if they cannot prove the origin of their goods and provide valid invoices, their merchandise will be subject to fines, confiscation, and destruction.

“Some of my inventory was purchased years ago through multiple intermediaries, and finding the original invoices now is almost impossible. The suppliers themselves don’t have valid invoices, only retail receipts,” shared a small business owner selling fashion items on Hang Duong Street in Hanoi. She expressed her hope that the managing agencies would provide more specific and flexible guidance during this transitional phase to help small businesses adapt.

Talking to Tien Phong correspondents, Dr. Nguyen Ngoc Tu, a lecturer at the University of Business and Technology in Hanoi with over 30 years of experience in the tax sector, stated that regarding the issue of handling existing inventory – the critical point causing concern among small businesses, the managing agencies need to provide guidance on classifying goods for appropriate handling.

For products such as food, medicine, and other items affecting consumers’ health, small businesses should take the initiative to classify and return them to suppliers or destroy them. However, for ordinary goods like clothing, shoes, and household items, they should be allowed to be sold gradually, removing any elements of brand counterfeiting (if any), and sold to recover capital, along with a commitment not to import goods of unknown origin in the future.