Building an ecosystem for e-commerce development

10:00 | 05/12/2019

Building out an ecosystem is quite necessary for not only startups but also e-commerce firms to grow and achieve a successful breakthrough.

building an ecosystem for e commerce development
James Dong, CEO Lazada Vietnam and Thailand

At TechFest held yesterday (December 4) in Quang Ninh province’s Halong city, James Dong, CEO of Lazada Vietnam and Lazada Thailand, confirmed that the digital economy is booming in Southeast Asia, and is forecast to continue growing – and Vietnam is a rising star even in this group.

Google Temasek predicted that the size of the regional e-commerce market by 2025 would reach $153 billion from $39 billion in 2019, while that of online travel would be $79 billion, online media $33 billion, and ride-hailing $41 billion. Of this, Vietnam is emerging as a potential market with CAGR of 49 per cent in its e-commerce market.

As Southeast Asia’s leading and fastest-growing e-commerce platform, Lazada is building out an e-commerce infrastructure ecosystem to host the future of commerce. The platform has already built an international-standard logistics system in Vietnam to serve both buyers and sellers.

For example, 89 per cent of deals are delivered on the same or the next day, and buyers can track their orders in real-time. Additionally, over 2,000 drop-off points for sellers and 3,000 collection points for buyers have been installed by November 11.

Lazada’s ecosystem is also supported by the leading logistics network in Vietnam with six fulfilment centres, two sortation facilities, 2,000 drop-off points, 70 hubs, and 35 collection points.

building an ecosystem for e commerce development
Building an ecosystem for e-commerce development

Affirming the potential for startups in e-commerce and logistics, Pham Hong Quat, director general of the National Agency for Technology Entrepreneurship and Commercialisation Development (NATEC), said that the number of transactions for these startups has been increasing rapidly in recent years.

“The Vietnamese population is large enough for startups to develop new models. Customers always want to enjoy new experiences, new solutions, based on smart applications and software, which are key factors for the creation and innovation of startups,” said Quan.

Despite the empty room for e-commerce development in Vietnam, the World Bank reported that logistics costs are very high, capturing 25 per cent of the GDP annually, much higher than the neighbouring countries of Thailand (19 per cent) and Singapore (8 per cent).

Thus, experts at the conference emphasised the need for solutions to lower logistics costs for the development of e-commerce. Additionally, the Ministry of Industry and Trade (MoIT) is collaborating with ministries and branches to fill out the legal framework and policies related to e-commerce and logistics, with a special view on extending supervision to and facilitating startups, and develop infrastructure.

building an ecosystem for e commerce development
Deputy Prime Minister Vu Duc Dam speaking at the opening ceremony of Techfest 2019 held by Ministry of Science and Technology, Quang Ninh province’s People’s Committee, in collaboration with VinTech City, and Sun Bright Communication JSC

Highly appreciating the role of Vietnamese startups, the roots Lazada is looking back on and the partners Lazada is supporting at present, Deputy Prime Minister Vu Duc Dam said that the success of Vietnamese startups not only contributes to national economic development but also fills authorities at all levels and the whole society with spirit.

“If everyone gets ready to come up with new ideas and work together to turn them into practice, success will definitely come to us,” the Deputy Prime Minister said.

He highlighted the need to connect in the era of the Fourth Industrial Revolution to bridge the gap between Vietnam and the world.

According to Chu Ngoc Anh, Minister of Science and Technology, the Vietnamese startup ecosystem has been supported by a bolstering legal framework.

In the first 10 months of this year, there were 29 business investments into startups and related projects attracting a total of more than $750 million, with the biggest deal worth up to $300 million in fintech, the biggest such transaction in Southeast Asia

The startup spirit has spread like wildfire across the nation. The Vietnamese startup eco-system has grown to include 38 incubators and more than 170 co-working spaces nationwide, while 52 out of 63 provinces and cities have made plans and mobilised resources to support startups. There are 61 innovative startup funds nationwide, the minister said.

Themed “Vietnam: Globalise”, TechFest2019aims to attract resources, manpower, technology, and finance to support Vietnamese startups and become a platform to connect Vietnamese the startup ecosystem with that of the world.

Techfest 2019, with the participation of over 300 businesses and startups, 100 ventures and investors, 200 speakers and experts, will continue until Friday, November 6, with activities such as a start-up exhibition, technology showcase, matching between investors and start-ups and start-up contests.

After three years of organisation, numerous activities developing national startups ecosystem have been carrying out, such as formulating legal framework to support startups. Accordingly, 52 of 63 localities have already issued plans and allocated resources for startups activities, so numbers of ventures is increasing.

Nguyen Huong

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