1. Who are the major 'e' commerce players in
Vietnam?
Global Sources, Sendo, chodientu, Agoda, Foody, Lazada, Tiki,
Zalora, Nguyen Kim and adayroi according to public source.
2. How are they structured?
a. Sales through global website/ Direct ship to customer
Mostly online travel agents are structured this way.
b. Sales through a global website/ Shipment through a Bonded Zone
or Foreign Trade Zone
c. Sales through a local website/ imported by resident entity
Mainly sales through a local website and/ or imported by a resident
entity.
d. Other
3. What is the Sales/ Shipment
Volume
The latest statistics is from 2015, when the total e-commerce
revenue was USD4.9 billion.
4. How are duties and taxes
assessed?
Duties and taxes are assessed based on total revenue of the
enterprise/ individual.
Enterprises doing e-commerce business registered in Vietnam must
pay Value- Added Tax (VAT) at a basic rate of 10% and Corporate
Income Tax (CIT) of 20%.
Individual residents doing e-commerce business without establishing
a company in Vietnam will only be subject to tax obligations if
they have annual sale revenue (including other sale activities) of
over VND100 million. In particular, they have to pay VAT of 1% and
personal income tax (PIT) of 0.5% over the sale revenue.
Foreign contractors must declare and pay taxes, either via their
authorized person in Vietnam or tax agents.
5. What is the profile of a typical 'e'
commerce shopper?
In 2015, an average monthly income of consumers in Hanoi and Ho Chi
Minh City was USD700 – 720. Vietnamese people tend to save
11-12% of their income generally. They spend 27-29% of their income
on fresh food and fast moving consumer goods (FMCG). An average
Vietnamese online shopper spends USD150 purchasing goods &
services online per year in 2015. People having higher income shop
less frequently than those with lower income, but when the former
do, they spend more.
Around 25-35% of Vietnamese consumers tend to try multiple brands
instead of sticking to one/ a few familiar or well-known
brands.
6. How is 'e' commerce affecting the
traditional bricks & mortar shop?
Bricks & Mortar retailers have to make plan to develop
e-commerce channels. Some successful retailers are NguyenKim,
thegioididong and FPT.
7. Has 'e' commerce hit the rural
areas?
Yes, but still to a very limited extent. Bricks & mortar
establishments still dominate the rural market. However, as a
result of internet availability, smartphone usage and increasing
GDP, we expect that e-commerce will become more popular in rural
areas in the near future.
8. How is delivery made?
Delivery is mainly dependent on a third party's service.
Delivery by motorbikes is the most popular means of delivery thanks
to its flexibility and convenience in Vietnam's narrow streets,
small alleyways and dense traffic.
Cash on Delivery is still preferable in Vietnam (85% of e-commerce
users choose this method).
Although there are many international logistics service providers
in Vietnam, local ones are in many cases better choices because
they have nationwide coverage, industry understanding and
experience, as well as cheaper delivery cost.
9. How are return goods handled?
Depending on policies of each e-commerce site. For example,
returning process can be done by filling an online form, going to
the office directly or phone calling. Returnable duration varies by
each site, from 07 days to 30 days.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.