ECommerce Current Situation in Vietnam Based on E-Commerce for Digital Content Industry...

eCommerceCurrent Situation in Vietnam

Based on

E-Commerce for Digital Content IndustryOpportunities and Obstacles in Vietnam

Seminar in November 99 during VINIT99 in Hanoi

Stefan Probst, Opticom Technologies Ltd.


CharacteristicsConventional Digital Production Industry Content

Industry(tangible goods) (intangible services)

Investment usually high mostly lowLabour low to medium highSkills low to medium medium to highTrading Sizemedium to high low to mediumDependencies medium to high

low to medium Procedures rather established quite new

(VERY paper based) (paper less)


Procedure Problems: General Issues

- Few End Customers in Vietnam Own a Credit Card- No Bank in Vietnam Knows How to Handle

Merchant Accounts for E-Commerce- There are No “Clearing Houses” in Vietnam- Internet is Very Expensive in Vietnam:

WebSpace for SellersBrowsing for Customers

- E-Commerce Servers are Only Inside Approved ICPs- Vietnamese Companies are Inexperienced in

Internet Dealing with Foreign Companies- “Internet Invoices” are Not Legally Recognised in Vietnam


Legally Valid Invoices:

Vietnam International / Internet- Invoice No. controlled - Invoice No. controlled

by Tax Office by company- only approved forms - form decided by company- needs seal of seller - company has no seal,

stamp not required- needs signature of seller- no signature needed at all

(and possibly of customer)


Procedure Problems: Domestic Trade

End Customer Business Buys Business Sells

Buys from Business to Business

Digital Content - no contract- no contract

delivery via internet - financial invoicee.g. WebPage Design has to be sent

separately

Tangible Goods - no contract- no contract

conventional deliverye.g. Handicraft Items


Procedure Problem: Import / Export

End Customer BusinessBusinessImports Imports Exports

Digital Content - possible, - expenses - VAT accounting?delivery via internet but not taxed bookable?

0%VAT, e.g. WebPage Design no contract

VAT deduction no fin. Invoice no exp.

contract no confirmed imp. no conf.

export- not taxed

Tangible Goods - standard, - difficult with - difficult with

conventional delivery taxed by customs customs customs

e.g. Handicraft Items no import contr. no export contr.

no payment conf.


Conclusions:

Big Opportunities- for individuals (start business, earn money)

- for society (reduce unemployment)

- for national economy (earn foreign exchange)

Severe Obstacles- Training- Legislation & Procedural Problems:

Banking, Taxation/Accounting/Customs


Internet Publisher / Web Designer

Technology Graphics Content ???

PC basics Art Graphics Advertising basics

Internet basics Typography Cultural Design

Web and HTML Web Graphics User Psychology

Database Techn. Multimedia Feedback & QM

SW Workshops Accessible Design Legal Regulations


A Kick-Start Solution:


The

Hanoi Cyber Square

a Virtual Buildingto Start e-Commerce in Vietnam


Hanoi Cyber Square

Goals of this Virtual Pilot Project:

- Provide favourable business environmentfor new e-Commerce businesses

- Provide testing ground for regulatory bodiesto set-up and adjust new rulesin co-operation with the tenants

- Provide clearly defined & limited environmentthat can be well monitoredto enable exceptional and temporary rules

“From Industrial Park to e-Commerce Centre”


Hanoi Cyber Square

The Foundation:

- Low cost, suitable office space in adequate area- Cheap, high-speed internet connection- State-of -the-Art Telecom (e.g. ISDN)- Backup Power- Favourable Taxes

“Make it Easy to Reach a Critical Mass”


Hanoi Cyber Square

Ground Floor(s): PC Shopping Mall

- “Normal” PC equipment shops & stores- Easy, fast supply of hardware to other tenants- Cover some of operational costs of the building- Act as a magnet for customers- Examples:

BKK: Pantip PlazaHKG: Golden Shopping CentreSIN: Funan Centre, Sim Lim Square, Sim Lim Tower

low rent & cheap, high-speed internet & favourable taxes


Hanoi Cyber Square

State Offices:

- Steering Committee with wide ranging power:Telecom/Internet, Finance, Trade, ...

- Tax Office for VAT related issues etc.- Customs Office- Industrial Property Rights / Copy Rights Office


PC Shopping Mall, Canteen, Bank, Post Office, ...


Hanoi Cyber Square

Financial Services:

- Bank(s) for Merchant Accounts, e.g. Vietcom Bank- Clearing House(s)

e.g. Rep. Office of Experienced International Comp.



State Offices: Steering Committee, Tax, Customs, Copy Rights


Hanoi Cyber Square

Internet Services:

- Domain Name Registration Service(for .vn and international Domains)

- Web Hosting Services




Financial Services: Bank f. Merchant Accounts, Clearing House


Hanoi Cyber Square

Content Business:

- Producers, Traders …- Training & Research in Co-operation w. Universities ...





Internet Services: Domain Name Registration, Web Hosting, ...


Hanoi Cyber Square

Content Business:- Content Producers, Traders …- Training & Research ...




Internet Services: Domain Name Registration, Web Hosting, ...


© Stefan A. Probst, Nov. 99, Sept. 01

ECommerce Current Situation in Vietnam Based on E-Commerce for Digital Content Industry...

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