Vietnamese firms are urged to use online platforms to expand their market reach in the UK now that the UK-Việt Nam Free Trade Agreement (UKVFTA) has come into effect, experts said.
With revenue of US$117.7 billion in 2021, the UK is the fourth largest market for e-commerce in the world, placing it ahead of Germany and behind Japan, according to a global provider of market and consumer data Statista.
Last year, the UK e-commerce market contributed to a worldwide growth rate of 15 percent with an increase of 12 percent, Statista said.
The biggest player in the UK e-commerce market is amazon.co.uk. The store had a revenue of $17.1 billion in 2021. It was followed by tesco.com and argos.co.uk which gained respective revenue of $9.5 billion and $6.3 billion. Altogether, these top three stores account for 30 percent of online revenue in the UK.
Meanwhile, Việt Nam is regarded as the second largest e-commerce market in Southeast Asia, only after Indonesia, according to a global e-commerce report in the first half of 2022 by Metric.vn.
The prolonged COVID-19 pandemic has also given fresh impetus to the country’s e-commerce industry which recorded growth of up to 53 percent in 2021, making it the optimal form of transactions for individuals and firms.
With such rapid growth, experts said it is time for both sides to raise the bar on this platform in order to facilitate online business.
According to Bùi Thanh Hằng, head of the International Cooperation Office under the Ministry of Industry and Trade’s E-commerce and Digital Economy Agency, the UKVFTA has allowed new means of market entry to emerge, notably e-commerce.
B2B and B2C are traditional forms of business for this platform, but new forms are also beginning to take root, including online showrooms and national pavilions, she said.
In order to help firms keep pace with these innovations, the government is urged to continue to refine the legal framework and develop programs that improve firms’ capacity. At the same time, firms themselves should embrace digital transformation and put it on top of their agenda to be able to expand their market footprint via e-commerce.
In a bright spot, Vietnamese businesses have effectively taken advantage of Amazon’s innovations to strongly develop and build the “Made-in-Việt Nam” brand on the world map, thereby leaving a strong mark of the country’s economy in the international market including the UK.
At the same time, several Vietnamese goods have affirmed their positions in another e-commerce platform in the UK, alibaba.com. In 2021, the UK positioned itself among the top 10 buyers of food and beverage, top six for clothes, and came in fourth in terms of furniture from Việt Nam.