Data from Vietnam’s Ministry of Planning and Investment shows that in the first seven months of 2024, China remained Vietnam’s largest import source, with imports reaching $79.2 billion, a 34.9% year-on-year increase, accounting for 37.2% of Vietnam’s total imports. This influx of cheap goods has put significant pressure on domestic production in Vietnam.

A report from the Ho Chi Minh City Business Association reflects the specific impacts of this pressure. In the second quarter of 2024, the number of companies reporting declining revenues increased by 30.4%, inventory levels rose by 34%, and total outstanding loans grew by 42%. These figures indicate that businesses are facing unprecedented difficulties in selling their goods.

The rapid development of e-commerce has exacerbated this issue. Vietnam’s e-commerce revenue is expected to grow by 45% in 2024, with a large volume of cheap Chinese goods entering the Vietnamese market through this channel. International stores are gaining increasing popularity on e-commerce platforms. Benefiting from advanced logistics systems, products from China are not only cheaper but also offer faster delivery times.

Data from the Agricultural Trade Promotion Center under the Ministry of Industry and Trade shows that cross-border e-commerce trade is booming, but this development appears to be one-sided. While international traders find it relatively easy to sell products to Vietnam on e-commerce platforms, Vietnamese sellers are still struggling to expand into overseas markets.

Facing this challenge, experts have proposed several recommendations. Professor Lê Văn Cường from the Paris School of Economics points out that the United States and the European Union face similar issues, such as the proliferation of cheap Chinese electric vehicles in these markets. He suggests addressing the influx of cheap imports through measures like taxation and quotas, such as implementing anti-dumping duties to support local production and setting up technical barriers. At the same time, he emphasizes the importance of improving logistics infrastructure, modernizing supply chains, and encouraging domestic producers to upgrade, invest in R&D, and build brands.

The Domestic Market Department of the Ministry of Industry and Trade proposes that promoting domestic consumption of Vietnamese-made goods for the remainder of 2024 is a viable solution. The department also points out the need to further improve the legal system, including developing new trade defense regulations to protect domestic production and local markets while complying with international commitments.

Nguyễn Cao Ngọc Dung from NeilsenIQ suggests that Vietnamese enterprises develop more effective retail strategies, focusing on aspects such as unique selling points, product quality, pricing, and presentation to attract buyers and compete effectively. Phạm Hồng Sơn, an expert in e-commerce and digital transformation, recommends that Vietnamese businesses should develop a combination of online and physical distribution channels, optimize competitive advantages, and develop their brands.

Phạm Duy Hưng from Amazon Global Selling Vietnam emphasizes the importance of improving product quality and building brands for long-term business development. Nguyễn Xuân Hùng from the Vietnam Logistics Association calls for substantial investment in logistics systems while focusing on standardizing production and operational processes, encouraging businesses to apply technology to optimize supply chains.

At the policy level, Vietnam is considering imposing value-added tax on low-value goods imported through e-commerce platforms such as Shopee, Lazada, and TikTok. The National Assembly’s Finance and Budget Committee estimates that 4 to 5 million low-value orders are shipped from China to Vietnam daily through e-commerce platforms, amounting to $1.9 billion monthly.

Summary:

• Vietnam faces an influx of cheap imported goods, putting pressure on domestic production.
• The rapid development of e-commerce has exacerbated this issue.
• Experts suggest addressing this through measures such as taxation, quotas, and improving logistics infrastructure.
• Vietnamese businesses need to enhance retail strategies, develop multi-channel sales, and improve product quality.
• The government is considering imposing VAT on low-value imported goods.
• Long-term strategies should focus on improving human resource quality, enhancing production technology, and increasing productivity.