There are many obstacles in the way of e-commerce development, of which the lack of a legal framework may be the biggest one.

Half electronically, half manually

A recent survey conducted by the Vietnam Chamber of Commerce and Industry (VCCI) on 2,233 enterprises in five big cities (HCM City, Hanoi, Hai Phong, Da Nang and Can Tho) showed that only 2.7% of the enterprises utilised e-commerce, though the Internet connection ratio was reported at 91%.

Explaining the fact that 97.3% of enterprises say ‘no’ to e-commerce, Tran Dinh Toan, Head of the E-Commerce and Information Section under the Enterprises Informatics Institute cited two main reasons for enterprises’ indifference to e-commerce, namely lack of awareness and concern about risks.

Nevertheless, the most important reason is that in the absence of a legal framework, e-transactions are not guaranteed by law. Despite the E-Commerce Law and five government decrees, enterprises still do not have answers to many of their questions.

Most recently, the Asian workshop on protecting e-commerce consumers held in Kuala Lumpur in August 2005 put out a 12-point proposal, serving as the basis for governments construct e-commerce policies that protect customers. Experts said that the proposal should be seen as a good starting point for the relevant Vietnamese authorities to compile legal documents on e-commerce.

One of the reasons why people do not use e-commerce is the complicated payment procedures. No commercial bank in Vietnam accepts on-line payments yet, and customers have to go to the bank to confirm their payments. This ‘half electronic, half manual’ method is inconvenient, which is why most customers prefer buying products and services with cash, and at markets.

Le Hong Ha, a member of the E-Commerce Law compilation board said that the most important thing Vietnam should do now is improve the country’s image internationally, with a focus on transparency and obeying common rules.

Too many barriers to small enterprises

Statistics show that Vietnam now has 773,000 enterprises, including private households, and only 80,000 of them, or 10% of enterprises, are equipped with computers. Experts believe that there are three factors hindering e-commerce development in enterprises: lack of awareness, lack of human resources and low information technology (IT) utilisation capability.

An ostrich breeding company once said that it could not do the business without IT. However, only a few companies share the same view. The majority of enterprises (60%) just focus on hardware installation and maintenance, while paying less attention to consultancy and training services.

Regarding human resources, only 22.8% of the 2,233 enterprises polled have more than 40% of their staff possessing basic IT skills, which also means that very few staff can use specialised software fluently.

The Government has approved a programme to support enterprises in utilising IT. However, no detailed project has yet been made to support enterprises in their production and business activities. Only Intel has been pursuing a project to supply equipment to 200 medium and small enterprises and supplying 1.5mil private households with information services.

Source: VietnamNet