Vietnam e-Business Forum 2007

Hanoi, Vietnam 2007 – January 17, 2007

eCommerce – Vietnam – 2007

…in the Context of WTO
and Worldwide ICT
“Hyperdisruption”
delivered by Robert gray, Research VP

Including contributions by: Frank Gens, Steven Minton,

Rick Villars

www.idc.com
“Hyperdisruption” – the Definition

“Major structural changes taking place along different

industry vectors at once all interacting with each other
and, more important, accelerating each other.”

 Small business become big

 More software become services
 More services become software
 Business IT players become more "consumer-ish“
 Consumer players become more businesslike

Insight: disruptive changes provide openings

For newer entrants like Vietnam
Source: IDC Predictions, 2007, Doc#204631,
Dec 2006, Frank Gens
eCommerce Spending Share of GDP
Rank Country eCommerce Share
of GDP (%)
1 Singapore 17.3%
6 United States 11.9%
24 China 5.7%
30 Thailand 3.4%
35 Indonesia 2.7%
52 Vietnam 0.2%

Insight: Vietnam’s Internet eCommerce opportunity

waits to be developed. Vietnam can benefit
from the learning of others.
Source: Information Society Index, 2006, Doc#204122,
Nov 2006, Steven Minton
Can You Survive Without eCommerce?

Only with the permission of

your customers and supply
chain
Only in monopoly markets
or in product sectors where
personal touch and direct
product experience is
paramount
…and then only with
significant difficulty!

Insight: Most product and service organizations

will need eCommerce in the future.
 What Makes eCommerce Interesting?
Low entry barriers, small suppliers can
compete with larger ones
Low friction transactions at high speed
Better buyer experience, more efficient sales
24 x 7 market
Virtually no geographic boundaries
Long tail of large product set
No-cost delivery of “bit-based” products
Computer-based and mediated payments
Finer grain monitoring and control
Insight: eCommerce transaction is generally a
“better”experience and is the 21st century way to
get to market
But…on the Other Side…
Your competitor is only a “click”
away
You may need to change business
processes to gain full benefits
Infrastructure must be robust and
24 x 7 x 365
Need for local language and
English
Need for emphasis both on “buyer
experience” as well as “Fraud
prevention”

Insight: Successful eCommerce requires

effort and discipline
Business to Business Considerations

Power of global trading sites

Dis-intermediation of distribution
stages – manufacturer to retailer
transaction
You, as manufacturer, are
considered part of the supply
chain and “outsourced
production”
Expect to be tightly managed
and held to commitments and
quality
How has Mature eCommerce Impacted
Developed Nations?

eCommerce supports
store shopping
eCommerce creates
entirely new products &
services
Large, public eCommerce
businesses have very high
market value

Insight: eCommerce is important and

growing more important
What Vietnam Needs to Build for eCommerce
Reliable electricity supply
Internet access &
Broadband Internet access speeds
Pre sales support – search, product
price comparisons, product reviews
Electronic payment systems
Product delivery systems
Post sales support – operation,
updates, warranty support
Legal framework
Insight: Vietnam will need to improve
Infrastructure to gain full eCommerce benefits
Recommendations
Design products for regional
and global tastes and styles
Create efficient infrastructure
– transport, and payments
Self-police on product quality
Organize for volume supply
Develop Vietnam supplier
directory on web for
consumers

Insight: The opportunity is huge

Advantage….Vietnam

Ability to create “clean slate”

eCommerce, learning from
pioneers
Support for English as second
language
Low product unit cost advantage
with high quality
Large ex-patriot (Viet Kieu)
population of Vietnamese around
the world

Insight & Conclusion: work to strengths

 Questions?

Please email me at
rgray@idc.com