Hanoi’s e-commerce booms, entailing potential risks

Hanoi (VNA) – Hanoi has been one of the two leading localities in e-commerce for the past five years, but the trend has posed considerable risks in database, technology, transaction procedures, legal regulations and technology standards.

According to the Vietnam E-business index announced by the Vietnam E-Commerce Association (VECOM), in 2017, Hanoi came second with 75.8 points, following Ho Chi Minh City with 78.6 points. The e-commerce market in the capital city generated a total revenue of 36 trillion VND (1.57 billion USD), accounting for 7 percent of the total retail sales of goods and services. As of May 2018, there were 7,726 e-commerce websites or applications registered by individuals and organisations in the city.

Numerous potential risks

Despite the fact that e-commerce has been booming, it still pose many risks considering the low level of the electronic environment, small scale and low professionalism of businesses, along with the prevailing customers’ habit of using cash.

Vice Director of the municipal Department of Industry and Trade Nguyen Thanh Hai said management authorities face challenges in managing fake and counterfeit goods in online trading. Besides, tax evasion has been a pounding headache, particularly when customers are individuals who do not care about receipts. Hai added that many online firms operate without business licenses and it is easy for them to swindle customers and evade tax.

Meanwhile, customers face great risks of lost goods, due to the complicated system of home address. This is the reason why many retailers refuse to ship products to Vietnam via postal service.

The value of e-commerce turnover is reckoned at 7.5 billion USD by 2025, but this is still just 5 percent of the total trade turnover.

Comprehensive measures

To encourage the e-commerce development in the city, Vice Chairman of the municipal People’s Committee Nguyen Doan Toan signed Plan No.84/KH-UBND with focus on the deployment of computing cloud technology, Artificial Intelligence, Augmented Reality (AR), and Internet of Things (IoT) to create modern business models.

Hai said that his department has applied many solutions to support e-commerce in its online public services, such as online tax filing and payment and e-payment to create a transparent and equal business environment. Also, it encourages the use of QR application to trace origin of products and prevent trade frauds.

The market management authority is ordered to keep close watch on e-commerce enterprises and handle violations in a timely manner.

Popularisation work on e-commerce policies and regulations will receive due attention while advanced e-commerce models will be introduced. In addition, the city encourages the establishment of websites and e-commerce applications which promote online sales of safe food.

The city will also invest in improving the local logistics networks from storage facilities to delivery services in companion with the development of online services in tourism, transport, healthcare and media.-VNA