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Did you know that there are over 60 million Internet users in Vietnam? Or that by 2020, the predicted turnover in Vietnam’s e-commerce sector is US$ 10 billion?
Starting an e-commerce company in Vietnam offers enormous opportunities. We have put together this guide to give you an overview of Vietnam’s e-commerce market as well as walk you through the process of setting up an e-commerce business in Vietnam.
Vietnam e-commerce market size and trends in 2019
With its 97 million residents and an increasing number of Internet users, Vietnam is attractive for many online retail businesses.
According to the 2019 Global Digital Report released by We Are Social and Hootsuite in January 2019, an average Vietnamese spends 6 hours and 42 minutes a day online.
Moreover, 87% of the Vietnamese had visited an online retail store during the month preceding the survey, and 77% of them had made a purchase.
Compared to the previous year, these numbers have grown by 33% and 30%, respectively.
Sources: Digital 2018: Vietnam; Digital 2019: Vietnam
According to the report, the most popular types of products the Vietnamese spent on were:
- Travel (including accommodation)
- Electronics and physical media
- Fashion and beauty
What activities are classified as e-commerce in Vietnam?
Under the Vietnamese regulations, e-commerce is the act of creating and/or managing a website or an online instrument (i.e., smartphone apps) and levying a fee upon a business or an individual that uses it as their trading platform.
In other words, all businesses that operate a platform where customers can buy goods, either physical products or intellectual property, would fall under the e-commerce business line.
Some of the top e-commerce websites in Vietnam are:
- Sendo
- Shopee
- The Gioi Di Dong
- Tiki.vn
- Lazada Vietnam
- Vatgia
Keep in mind that if you are going to sell products directly to consumers, your e-commerce business in Vietnam also needs a trading license which will take 6-12 weeks to acquire.
Types of e-commerce businesses
Online marketplace
An online marketplace is a website where different merchants gather to sell their goods. You mediate advertisements and payments for the products that go through your site. The most well-known global online marketplace giants are Amazon and eBay.
To set up an online marketplace in Vietnam, you also need to register the website with the Ministry of Industry and Trade in addition to the general company registration process.
The website must comply with the criteria set by the Vietnamese government, and in general, the registration takes up to one month.
Online classifieds
The main idea of a classified is the same as of an online marketplace. However, payments for the products do not go through the site but go directly to the seller, and you only mediate advertisements. One of the most popular classified advertisement web pages is Craigslist.
Online classifieds, just as online marketplaces, require website registration with the Ministry of Industry and Trade.
Online retailer
In contrast to marketplaces and classifieds, online retailers both sell and storage their own products. You do not mediate the advertisements of other vendors but sell products from your own stock.
A considerable number of online retailers are regular retailers who also sell their products online. For example, Walmart is an online retailer who operates with retail stores as well.
If you are going to become an online retailer in Vietnam that sells its own products, your website only requires a notification instead of the registration.
Cost of starting an e-commerce business in Vietnam
In general, there is no official minimum capital requirement in Vietnam for most business lines. However, when setting up a company, your capital contribution should cover all your planned expenses.
How to register an e-commerce company in Vietnam?
The general process of registering an e-commerce company in Vietnam is the same as for any other foreign investment company. However, a few additional steps are required.
#1 Investment registration certificate
First of all, you must apply for an investment registration certificate from the Department of Planning and Investment (DPI).
The investment registration certificate is the primary license for doing business in Vietnam. Without this license, your company cannot conduct any business activities in Vietnam.
#2 Business registration certificate
Secondly, you need to acquire a business registration certificate. Your company will be registered as a trading company, and if you sell online, we will conduct website notification and registration activities.
After the Department of Planning and Investment has granted you one, you have 90 days to make the initial capital contribution.
#3 Approval from the Ministry of Industry and Trade (trading license)
Thirdly, if you are going to sell products directly to consumers, you’re also going to need a trading license.
The application for a trading license will be sent to the Ministry of Industry and Trade for approval after the incorporation process, and in general, it takes 6-12 weeks to acquire a trading license in Vietnam.
#4 Website notification or website registration
Lastly, after the general company registration process in Vietnam, you also need to proceed with either website registration or website notification, depending on the type of your e-commerce company in Vietnam.
|
Type of e-commerce business |
Requirement |
Timeline |
|
Online retailer (selling your own products) |
Website notification |
Ten days |
|
Online marketplace or a classified |
Website registration with the Ministry of Industry and Trade |
Up to 1 month |
The website must fulfill the criteria set by the Vietnamese government. For example:
- terms and conditions are included in your application and on your website
- terms of service are also available in Vietnamese
Additionally, you must register the headquarters of your e-commerce business in Vietnam. However, you don’t need to open different branches to service clients in other locations.
The requirement to open branches only applies if you also want to operate retail stores in Vietnam.
Are you also planning to import your products to Vietnam? Find more information in our guide to importing to Vietnam.
What to consider when starting an e-commerce business in Vietnam
Do you need to import any products?
You need to have a trading license in Vietnam if you want to import products for your online retail business. The Ministry of Industry and Trade issues the license, and all foreign companies must have it before importing goods to Vietnam.
If you wish to import to Vietnam on a grander scale, read our previous article on how to start a trading company in Vietnam.
Importer of record in Vietnam
Another option would be to use an importer of record (IOR). When using Emerhub’s IOR service, you don’t need to obtain any licenses or worry about getting your goods through the Vietnamese customs.
See more benefits of using an importer of record service.
Are the products new or used?
The process of choosing the products you want to sell can cause a lot of headaches. Another thing to consider before starting your company registration process in Vietnam is to decide whether the products you want to sell are new or used.
If you plan to sell second-hand items that you need to import, you might want to reconsider. Vietnam does not allow the import of used consumer goods.
For example, you can’t import used electronic equipment, clothes, home appliances, etc. The products should be brand new.
Starting an e-commerce business in Vietnam
Contact us via the form below to schedule a complimentary consultation. Our consultants will assist you in getting started with your e-commerce business in Vietnam.
