Vietnam’s first Cross-border E-commerce project

Introduction

E-commerce has been rapidly transforming consumer habits, business practices, and global supply chain operations worldwide. The total value of global e-commerce transactions was forecasted to reach nearly $ 4.9 trillion in 2021, making up 20% of total retail transactions, a figure expected to escalate to $ 64 trillion by 2024. With this growth, cross-border e-commerce is projected to account for 20% of total e-commerce transaction value, showcasing its increasing importance.

China serves as a vital case study, having developed a robust e-commerce landscape over the past two decades. With nearly 800 million online shoppers, China has become the largest e-commerce market globally, surpassing the United States. The nation boasts 105 comprehensive cross-border e-commerce pilot zones across 30 localities, implementing specialized policies that facilitate e-commerce trade. These include a flexible customs system that has significantly reduced clearance times from four hours to one minute and an extensive bonded warehouse system, which allows goods to be cleared almost instantaneously upon order placement. As a result, China's cross-border e-commerce market reached $ 53 billion in 2021, growing by an impressive 46% from the previous year.

Drawing inspiration from China’s success, Vietnam is set to launch its first cross-border e-commerce pilot project. The collaboration involves the joint venture of King Bac Binh Ket Global Investment Fund and Becamex, a pioneering infrastructure developer in Vietnam. Binh Duong was chosen as the ideal location for this initiative due to its proximity to Ho Chi Minh City, convenient access to Tan Son Nhat Airport and Cat Lai Port, and well-developed infrastructure that supports import and export activities. Binh Duong has also positioned itself at the forefront of attracting foreign investment and boasts an abundant skilled workforce.

The BW Supply Chain City project in Binh Duong spans 75 hectares and includes various components such as a high-tech production area, office space, and a goods distribution center. A significant aspect of this project is a 14-hectare bonded warehouse facility specifically designed for cross-border e-commerce. This facility will enable overseas sellers to pre-store inventory for e-commerce platforms.

The innovative model developed in this pilot project aims to streamline the supply chain from production to distribution and will allow goods stored in the warehouse to be processed and shipped to consumers in just 2 to 3 days, a significant improvement compared to the current 15 to 30 days wait time. Additionally, a multi-channel transaction management platform will facilitate seamless interaction between buyers, sellers, logistics services, and management agencies like customs. This system will monitor and trace the origin of goods, enhancing the convenience for all stakeholders involved.

As e-commerce continues to thrive post-COVID, this cross-border e-commerce project presents opportunities for buyers to access a global market filled with diverse, affordable, and safe products, while simultaneously reducing costs for businesses and optimizing tax revenue.

Keywords

Cross-border e-commerce
Vietnam
BW Supply Chain City
E-commerce growth
China
Customs system
Bonded warehouse
Ho Chi Minh City
Binh Duong

FAQ

1. What is the significance of Vietnam's first cross-border e-commerce project?
The project aims to enhance Vietnam's e-commerce landscape by providing a streamlined supply chain model for international trade, thus enabling local businesses to compete on a global scale.

2. Where is the BW Supply Chain City project located?
The project is located in Binh Duong, Vietnam, which is adjacent to Ho Chi Minh City and has access to crucial logistics facilities.

3. How will the project affect delivery times for consumers?
The project is expected to reduce delivery times from 15-30 days down to just 2-3 days, significantly improving the shopping experience for consumers.

4. What advantages does Binh Duong offer for this project?
Binh Duong has developed infrastructure suitable for import and export activities and is recognized for attracting foreign investment due to its skilled workforce.

5. How does this project relate to China's e-commerce success?
Vietnam's project draws lessons from China's extensive experience with cross-border e-commerce, including strategies related to customs efficiency and bonded warehousing.