THE CHALLENGES FACING E-COMMERCE STARTUPS

E-commerce offers significant opportunities but also poses many challenges for domestic businesses, especially startups entering this highly competitive field. Founders and operators of e-commerce platforms often face consumer hesitation due to concerns about payment security, online scams, and fierce price competition. While e-commerce has become a vital driver of innovation and competitiveness, it also forces startups to constantly adapt their models, strengthen product quality, and build brand trust to survive in an increasingly demanding digital market.

To adapt to the new business landscape, many small enterprises and startups have gradually shifted their operations online through platforms such as Shopee, Tiki, Lazada, and TikTok Shop. This move enables them to reach new customer segments, expand market access, and keep pace with modern consumption trends—considered a necessary direction for long-term competitiveness and sustainable growth. However, the journey to success in e-commerce remains full of obstacles. The most pressing challenge lies in the fierce competition among similar products, which requires startups to ensure strong product quality, attractive design, and brand credibility. At the same time, enterprises must choose the right online platforms and develop marketing strategies that effectively target customer needs.

According to Mr. Do Quy Su, Chairman of FiveSS Technology Joint Stock Company—the owner of 5Sao, one of Vietnam’s Top 3 National Startups in 2024—in a booming e-commerce landscape, consumers now demand greater transparency, verified product origins, and faster connection speeds. However, the market still faces persistent issues such as counterfeit and low-quality goods, limited digital access for small traders, and the lack of a shopping channel that is both convenient and trustworthy.

Despite having an abundance of goods and local specialties, e-commerce startups continue to struggle with infrastructure-related barriers, including online payment systems, warehousing, logistics, packaging, and customs procedures. These challenges are compounded by competition from long-established domestic and international e-commerce platforms that already possess strong reputations and customer bases.

Mr. Huynh Duy Chuong, Director of Huynh Khoi Hung Co., Ltd., shared that his company has adopted a hybrid business model that combines online and offline sales to meet diverse customer needs and enhance competitiveness. Alongside physical stores, the company has launched an official website, opened online stores on major e-commerce platforms, and leveraged social media channels for promotion. However, challenges such as high logistics costs, strong competition from retail chains, and the lack of full integration between banks and e-wallets continue to make many customers hesitant about online payments—issues that are common among small and medium-sized retailers.

According to Mr. Nguyen Huu Tuan, Director of the Center for Digital Commerce and Technology Development under the Ministry of Industry and Trade, Vietnam’s e-commerce sector still faces structural weaknesses. Logistics infrastructure remains uneven between urban and rural areas, online retail accounts for only around 10% of total sales, average consumer spending is relatively low, counterfeit goods are still widespread, and the cash payment ratio remains high. Moreover, the regulatory framework has yet to fully keep pace with rapid technological and business model changes.

Mr. Tuan also emphasized the importance of promoting AI applications, developing high-quality human resources, and fostering green and sustainable logistics. He suggested that in the coming years, authorities should continue improving policies, legal frameworks, and management mechanisms for e-commerce development. Key priorities include enhancing digital infrastructure, logistics, and cashless payment systems; building core digital platforms for green and sustainable e-commerce; promoting regional linkages and international cooperation; and improving digital literacy to increase e-commerce participation among both businesses and consumers.

Source: Dien Dan Doanh Nghiep- VCCI