Starting an E-commerce Business in Vietnam

With the advancement and proliferation of the internet and electronic devices, Electronic Commerce (better known as ‘e-commerce’) has become a foundation of how modern society consumes and interacts. Given the impact e-commerce has on our lives, let’s look at what is e-commerce in Vietnam and what you need to know in order to start an e-commerce business in Vietnam.

Requirements for e-commerce businesses in Vietnam.

1. What is E-Commerce?

The World Trade Organization’s definition, in accordance with The Declaration on Global Electronic Commerce adopted by the WTO’s Second Ministerial Conference in May 1998, states that e-commerce is “the production, distribution, marketing, sale or delivery of goods and services by electronic means”.

From a Vietnamese perspective, Clause 16, Article 3 Decree 52/2013/ND-CP as amended by Decree 85/2021/NĐ-CP on E-commerce of the Government (“Decree 52 and Decree 85”), states that “E-commerce service means an e-commerce activity whereby a trader or an organization providing e-commerce service (hereinafter referred to as “e-commerce service provider”) sets up an e-commerce website that offers an environment for other traders, organizations and individuals to carry out trade promotion, sale of goods or supply of services”.

E-commerce service providers exclude traders and organizations that only provide website design services and do not directly engage in the business, operation or coordination of activities on such websites.

2. Forms of e-commerce activities in Vietnam

E-commerce activities are represented in different forms and by a lot of electronic means. According to Vietnam law, there are 3 kinds of e-commerce operation:

• E-commerce activities conducted via a website;
• E-commerce activities conducted via an application installed on an electronic device
• E-commerce activities conducted via mobile telecommunication networks

It should be noted that e-commerce activities conducted via mobile telecommunication networks have no specific regulations, and as “websites” and “mobile apps’ have many points of similarity, discussions and general information regarding e-commerce websites can be interpreted interchangeably with “mobile apps”.

There are 4 common types of e-commerce websites:

1. E-commerce sales website
2. E-commerce trading floor
3. Online promotion website
4. Online auction website

a. An e-commerce sales website

Following Clause 1 Article 25 Decree 52 and Decree 85, Sales e-commerce websites are e-commerce websites that are established by traders, organizations or individuals to serve their trade promotion, sale of goods or supply of services. This is commonly the standard website of a retailer or service provider selling their own product using their own domain. Examples include:

https://vinmart.com/

https://www.zara.com/vn/

https://www.vietnamairlines.com/

b. An e-commerce trading floor

E-commerce Trading Floors have become popular in recent times, with significant investment being put into promoting these websites as part of everyday life for consumers.

An E-commerce Trading Floor is defined as an e-commerce service provision website established and owned by an organization which allows other traders, organizations and individuals that are not the website owner to conduct part or the whole of process of sale and purchase of goods or services on that website (exclusive online securities trading websites) (Clause 9, Article 3, Decree 52).

Forms of operation of E-Commerce Trading Floors include:

• A website that allows its members to open booths for displaying/promoting their goods or services
• A website that allows its members to open accounts to carry out the conclusion of contracts with customers
• A website that has specific trading categories or tabs that allow its members to post listings of goods and services
• A social network that operates in one of the forms specified in Points a, b, c of this Clause and makes its members directly or indirectly pay fees for carrying out such activities

Some familiar E-Commerce Trading Floors in Vietnam include:

https://www.lazada.vn/

https://shopee.vn/

https://tiki.vn/

https://www.vietnamworks.com/

https://www.traveloka.com/

c. Online promotion website

Pursuant to Clause 10, Article 3, Decree 52, an Online Promotion Website is an e-commerce service provision website set up by traders and organisations to promote goods and services of other traders, organisations or individuals under the terms of promotion service contracts.

An e-commerce website is considered as an Online Promotion Website if it performs one of the following services:

• Selling goods vouchers and service vouchers so that customers can buy goods or use services of the partners at preferential prices or with other benefits
• Selling frequent customer cards to enable customers to use goods or services from a network of partners at preferential prices or with other benefits compared with those upon purchase of goods and services of ach individual partner
• Other forms of online promotion services stipulated by the Ministry of Industry and Trade.

Below are examples of Online Promotion Websites:

https://edoctor.io/

https://www.hotdeal.vn/

d. Online auction website

Following Clause 11, Article 3, Decree 51, an Online Auction Website is an e-commerce service provision website providing solutions to allow traders, organizations and individual that are not the website owner to organize an auction for their goods on that website.

Examples of Online Auction Websites include:

https://sohot.vn/

https://daugiaviet.vn/

A single e-commerce website can integrate different types of e-commerce into the single site . For example:

https://www.lazada.vn/ is a website that combines 3 e-commerce types: Sales E-Commerce Website, E-Commerce Trading Floor, Online Promotion Website

https://www.foody.vn/ is a website that combines 2 e-commerce types: E-Commerce Trading Floor, Online Promotion Website

3. Registration of Websites with the Ministry

Traders, organizations, or individuals which own the website are responsible for registration of the website with the Ministry.

For the website to integrate multiple functions of multiple types of website, this web must be registered in accordance with its function.

Below is an illustration of the procedure for the registration of an e-commerce website.