Online Shopping in Vietnam - Why Still Underdeveloped?

Online Shopping in Vietnam - Why Still Underdeveloped?

Along with the increasing number of internet users worldwide, electronic commerce has experienced an international development due to a great deal of advantages it brought to its customers. They are home shopping, easy and flexible to access wherever and whenever you want, the variety of goods exposing, reviewing and price comparing, just to name a few. Internet purchase is now the tendency of the modern world.

In Vietnam, according to the Yahoo's Net Index 2011 published this Aug 3, Internet has become the most popular media with 42% of users compared to radio of 23% and newspaper 40% (Khanh Linh ). As a result, many people believe that with that popularity, online shopping in Vietnam have to be in full blossom. However, the statistics from the source mentioned above proves the contrary when only 18 % of users admit to have an online transaction within the last 12 months, 61% affirm that they do not intend to purchase anything in the next year and 39% claim that they "may buy something online" ("Online purchase habit not high enough"). It is said that e-commerce is still something unpopular or underdeveloped in Vietnam because of the shopping habits of Vietnamese consumers, the delivery process and extra shipping fee, personal information safety in payment as well as the vague quality of online goods.

The conventional shopping habits of Vietnamese including trying products, purchasing in familiar store and using cash in payment are the first factors halting the development of internet trading in our country.

Home shopping through internet, on the one hand, may allow people to save time, money and transportation costs or avoid crowded streets and shopping malls. It, on the other hand, also takes away from us the chance of seeing, tasting, touching, trying the products and consulting or bargaining with the salesperson which are the common habit of Vietnamese shoppers. Tran Le in "Online shopping in Vietnam: Where the weakness?" claims that some people are used to seeing, touching, even "smelling" the products before deciding to buy them and that is what e-commerce can never satisfy. It is apparently much easier to decide whether to buy a bag or not by touching it, checking its size and material, making sure the straps comfortably fit over your shoulder in a brisk and mortar shop than just seeing the picture and struggling to imagine the size of 23cmx40cmx10cm on a website. One more example: when buying a book, one needs to consider its content by reading some pages, the abstract or the author's biography in order to be sure whether you want to buy it or not. This is only possible in a brisk and mortar bookstore, not an online one, where you could just see the book's title, cover, author's name and maybe some reviews of unknown people which could not be reliable sometimes.

Another matter intervenes the prosperity of Vietnam internet shopping is the custom of faithfully buying things in a familiar store. According to a report by Kantar World Panel, approximately over 70% of housewives attending the surveys carried out in 4 biggest cities in Vietnam frequently purchase grocery goods at one store only ("Many urban shoppers now focus on one store"). These consumers feel more secure to shop in an accustomed store where the salesperson is known for years and the source and quality of goods are of guarantee. This custom partly drives these faithful people away from buying goods on unknown websites which they consider unreliable.

Next, in terms of payment, internet shopping requires customers to have a credit or debit card, but although the internet banking has appeared in Vietnam for rather a long time, this kind of payment is still far from popular within our society when the ratio of e- payment in Vietnam is only 2-3% ("Virtual purse in Vietnam") Cash is still used in most transactions and cards are regarded as complicated, inconvenient and uneconomical for the unclear fee charged each use. (Hong Nhung et al). As a result, lack of means of payment prevents many customers from deciding to purchase online.

The second reason that let people down when shopping in cyberspace is the annoying of delivery process and shipping fee. It is largely agreed that one significant drawback of online shopping is that online purchasers have to wait to get the items and have to pay for the shipping costs except for some special free shipping promotions offering in a certain amount of ordered goods in some websites. The shipping fee then adds to the price exposed earlier and the total cost now sometimes makes up to the money saved by home shopping or discounted price. In case of cross-border purchase, extra taxes are also counted so the much higher price at the checkout step might annoy customers for underestimating the expenditure. In addition to extra fee, instead of immediately being able to experience the products at the time of buying as in local stores, online buyers are to wait at least one day after the transaction completed. Receiving the goods is not always an easy process either as delivery activities always take place in working time when many people could not afford to stay home to receive and check the commodities themselves. Another inconvenience may occurs when the product needs to be returned or refunded due to whatever reason. The complex process now requires the contact to the supplier and the post office, following another waiting time to get refund or a replacement if you are lucky enough because most websites often get rid of their responsibilities after the cargo leave the stock sites. That is the reason why over 25% of the population enjoys using the internet but the e-market is still considered underdeveloped with only 8% of the figure above purchase