Why You Should Start an Online Business in Vietnam

Vietnam has always had a reputation for being one of the most vibrant and culturally grounded countries in the world. It’s a nation with a storied history and is continuously flocked by tourists every single year. But what many people don’t realize is that Vietnam is also a country with great economic potential, particularly in the world of e-commerce. This makes starting an online business in Vietnam such an appealing endeavor for so many. In fact, the Vietnam E-Commerce Association estimates that the total value of the country’s e-commerce industry will reach $23 billion by 2025.

Why Vietnam is a Great Place for an Online Business

Vietnam is a country that is home to over 97 million residents who are actively learning more about the value of the Internet and technology in everyday life. According to an online study that was conducted by Q&me in 2021, Vietnamese people spent an average of around 6 hours per day browsing through the internet on their mobile phones. Some of the most popular websites among the Internet users of Vietnam included Facebook, YouTube, TikTok, and Shopee.

A report conducted by We Are Social and Hootsuite also found that 87% of Internet users in Vietnam have searched online for a product or a service to purchase. It was also found that 77% of Vietnamese Internet users have experienced purchasing products and services online. This just goes to show that Vietnam is a country that isn’t a stranger to the world of e-commerce and that the nation is rife with potential for market penetration.

Some of the most popular industries among the Vietnamese population for e-commerce include fashion and beauty, electronics and physical media, food and personal care, furniture and appliances, and toys. This growth of the e-commerce industry in Vietnam is attributed to the population’s growing affinity towards technology and internet services. More than 50% of Internet users make use of mobile banking and 62% of users are confident with making purchases online through a mobile phone.

Types of E-Commerce Businesses in Vietnam

The most important piece of legislation governing e-commerce in Vietnam is Decree 52. As per the provisions of the law, e-commerce activities in Vietnam can be classified into three distinct types:

Online Marketplace

An online marketplace is essentially a platform that allows sellers and buyers of different industries and markets to interact with one another within a single space. The platform serves as the middleman that connects sellers with logistics teams and allows them to advertise their products and services to prospective buyers on the internet. Some of the most popular online marketplaces include Lazada, Shopee, and Amazon.

Online Classifieds

Online Classifieds are essentially the same as an online marketplace, but the platform itself doesn’t handle the transactions between the seller and consumer. Instead, the platform earns a profit through its advertisements. It gives sellers a platform for them to advertise their products to a wide customer base, but it doesn’t do anything beyond that. A platform like Instagram is a good example of this wherein the app merely charges for advertising space but doesn’t take a cut for successful conversions from sellers.

Online Retailer

An online retailer is someone who sets up their own store and sells their own products. These products can either be sold as a result of unique manufacturing or direct labeling. Often, online retailers will set up their own e-commerce websites or will make use of online marketplaces and online classifieds to market their products to an online audience.

Steps to Starting an Online Business in Vietnam

Apply for Investment Registration Certificate

The first step to establishing an online business in Vietnam is to apply for an Investment Registration Certificate from the Department of Planning and Investment. This is the most important license for any kind of business entity in Vietnam. Without this license, a company can’t legally conduct business operations in the country.

Acquire Business Registration Certificate

The next step in the process is to acquire a Business Registration Certificate. In this step, your company will be registered as a trading company. Once the Department of Planning and Investment grants you this certificate, you have up to 90 days to complete your initial capital contribution.

Secure Trading License

Once you’ve secured a Business Registration Certificate, you then have to secure a trading license from the Ministry of Industry and Trade. This should be done after the incorporation process and has a processing time of anywhere between 6 to 12 weeks.

Perform Website Registration or Notification

Depending on the nature of your e-commerce business, you will have to either perform a website registration or notification for your company. If you will be setting up a business that classifies as an online retailer wherein you sell your own products and merchandise, you have to go through a website notification. The process of this can take up to 10 days. If your company is an online marketplace or online classified, then you have to go through a website registration which can take up to one month.

Typically, you will be required to submit the Terms and Conditions of your business during your application and you will also have to publish them on your website. The Terms of Service for your business should also be available in Vietnamese.

Register the Headquarters of Your Business

Lastly, you need to establish a representative office or headquarters for your e-commerce business in Vietnam. It’s not required that you open multiple branches for your business for you to serve clients throughout different regions.

Final Word

While setting up an e-commerce business in Vietnam seems like a lot of work, it doesn’t always have to be the case. Premia TNC Limited is perfectly capable of helping you through all of the specifics to make the process as easy and as uncomplicated as possible. Vietnam boasts of one of the most potent economies in the world. It has a growing population that’s becoming more and more receptive towards technological products and services. It’s as good a time as any to establish an online business in the nation as the market continues to become more competitive.

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