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Guide to approaching the US market: E-commerce for small and medium enterprises in Vietnam (08/21/2019)
Houston Trade Branch in Vietnam compiled a guide to accessing the US market through e-commerce channel for small and medium-sized enterprises in Vietnam.

The United States is a large market with a population of over 300 million people, along with consumer culture that has created the world's largest buying market. However, with a large and competitive market, sales through intermediary channels and traditional distribution are not simple and often costly, which makes it difficult for Vietnamese businesses to export. goods into the United States, especially when 98% of Vietnamese businesses are small and medium.
With the explosion of internet and e-commerce, Vietnamese businesses can now sell their products directly to US consumers. The Vietnam Trade Office in Houston compiled a guide to accessing the US market through an e-commerce channel for Vietnam's small and medium-sized businesses that want to sell online into the United States.
1. What is e-commerce
E-commerce involves buying or selling products and services over the internet. This purchase can use a website, online market (marketplace) like amazon, ebay, .. or media sites and social networks to sell to overseas customers.
2. Why online sales
Online sales opportunities are huge and growing. Enterprises can sell products directly to consumers without having to go through traditional distribution channels. By selling online, Vietnamese companies can:
- Business 24/7
- Looking for new customers in foreign markets
- Branding
- Access to new markets at low cost
- Control the time of sales and use data to make reasonable business decisions.
- Receive money in advance, limit the risks related to payment
3. Method of developing e-commerce strategy
If businesses see e-commerce suitable for their businesses, businesses should consider building an e-commerce strategy to help businesses succeed and ensure competitiveness.
Enterprises may consider some of the following points in strategic planning for export of goods through e-commerce
Clarify goals
Businesses need to know what their sales or online presence must achieve? Businesses seek to sell online, or just to promote their products or services?
Resources
Setting up an online sales facility can take time. So businesses need to clarify what resources businesses will need to manage until they start to make profits?
Market information
Clearly identify who the target customers of the business are: other businesses? Young consumers? Elder? Geographical areas that businesses want to target? Characteristics of consumer culture. (It should be noted that the United States is very large with many different climate zones, many different ethnicities so consumption habits may also vary). Enterprises also need to find out who is the main competitor of the business, and what makes them successful in online business?
This information will help businesses adjust their business strategies or online promotion plans.
Features of the website
Businesses need to decide what features businesses want their website to have before consulting a professional web developer for assistance.
It should be noted whether the Website needs to be mobile friendly? Or do you need a separate application?
Choose a matching channel that suits your business
There are 4 main channels for selling through e-commerce. Enterprises may consider using one or a combination of the following methods:
- Website: businesses can build and use their own website to promote products, raise consumers' awareness about businesses or use that website to sell products or services directly. business case. The website may host in Vietnam, the United States or a third country and should be designed by professional web developers.
- Online markets: for small businesses, online markets provide a useful "gate" for Vietnamese businesses to expand their reach and increase revenue while minimizing risks. The famous online markets of the United States can be mentioned as Amazon, Ebay, Fruugo, ...
- Distributor is a third party: Enterprises can sell their products or services through third-party websites, using existing marketing and sales networks. For example, businesses can use Amazon as an online market to sell their products, but on the other hand, businesses can use Amazon as a distribution service channel for businesses. At this time, the royalization will be instructed: "distributed by Amazon"
- Social network: can be useful to increase the presence and promotion of the market of businesses. Through social networking, businesses can build consumer awareness about brands or even sell directly to customers. Enterprises can hire a local marketing company with knowledge and local culture sensitivity for managing social networks.

4. E-commerce in the United States
The United States is home to the world's most sophisticated e-commerce market. According to 2018 statistics, US customers spent US $ 517.36 billion on online shopping with a total value of goods sold online reaching about 3.63 trillion US dollars. The value of online purchases increases by about 15% per year. Currently in the United States, many traditional stores and retail chains have closed due to the strong development of e-commerce. Online retail market accounts for 14.3% of total retail sales and has continuously grown in recent years.
The above figures show that e-commerce provides a great potential for Vietnam's small and medium enterprises to increase revenue through commodity exports to the United States via this path.
Implementation steps
Businesses need to consider marketing, payment, efficiency, taxes and other fees. This is an integral part of the e-commerce strategy of the business.
Marketing products and services
Enterprises need a clear marketing strategy, taking into account the local factors of the target customer group. When marketing goods or services to US customers, businesses need to provide the following details and details:
- Payment and delivery methods;
- Steps related to ordering;
- Total cost of orders (including goods prices, shipping prices, taxes and surcharges if any) or methods of calculating delivery costs;
- Minimum conditions and time for an order.
In addition, the following factors need to be added:
- Enterprises can use social media sites like Facebook, Twitter or YouTube to promote their products and develop customer bases in the United States.
- Encourage the use of coupons, promotions and cross-sale promotions (ie buying this item can be discounted other items that the business sells if in the same order) - these methods are available Special attraction for US customers.
- Provide a reliable customer experience for your product - including direct customer service where possible
Pay
US consumers mainly use credit cards, debit cards and PayPal to pay online. However, American Express, Discover Card and local payment cards are also very popular (local payment cards are credit cards issued by companies, retailers, such as Amazon credit cards, Costco. , HEB, macy ...). Businesses should try to provide the widest range of optional payment possible.
Stage completed: delivery of goods or services of the business

To make an order, note the following points
- Consider using an online market that can handle shipping (such as Amazon) or use a logistics company that is a third party to manage the delivery and return of products of the business. Currently Amazon has signed a partnership with the Ministry of Industry and Trade to support Vietnam's small and medium enterprises to sell on Amazon, including leasing warehouses and using Amazon's transport services. However, businesses can fully consult and work with forwarding companies to transport their goods to US buyers.
- Note the specific conditions of online sales, the return / exemption conditions, clear recommendations for customers to know before placing a purchase order. Before placing a purchase order, the business needs to clarify:
+ Customers must pay in advance to accept orders
+ Payment method (types of cards can be accepted), delivery options (fast, slow, ..) and prices
+ List the steps related to customer ordering
+ Allow customers to correct errors in the order process if they are confused
+ Ensure customers can store order and invoice terms such as allowing them to print the file, to the printer
+ For email address to contact
+ Description of goods clearly and honestly
+ Total costs: including commodity prices, shipping prices and taxes, ...
- After ordering, businesses should:
+ Confirm the order placed as soon as possible via email, and must be earlier than the delivery time
+ Provide copies of contracts, orders via email and other formats as long as possible for future reference or disputes if any later
+ If possible, can provide delivery journey and expected time of delivery to the recipient
Taxes, customs fees and surcharges
Business goods will need some relevant documents and are subject to customs duties and sales tax (sales tax) when the goods are delivered to buyers

The US tax system is very complicated. Although the United States has no value-added tax (VAT), goods will be subject to sales tax (sales tax). Sales tax in each state is different, shoppers will have to pay this tax at the state tax rate that the goods are required to send if the business has a physical presence (office, warehouse) in the state. of the buyer. For example, buyers in Texas state when buying goods online will be subject to a state tax of 8.25% if the seller has an office or warehouse in Texas. However, buyers will not have to pay this tax if the seller does not have a physical presence (office, warehouse) in the state. Some states like Alaska, Delaware, Montana, New Hampshire and Oregon do not impose sales taxes (sales tax is zero).
Protection of intellectual property rights on e-commerce sites
Different e-commerce sites have different rules to protect intellectual property rights. Enterprises should pay attention to registering the protection of their copyright, patents, trade marks and industrial designs in the country in which the enterprise sells and produces (Vietnam and the United States), including both via e-commerce channel.
US law allows a one-year grace period for an inventor to register a patent from the date of publication. In the United States, copyright registration is recommended but not required for published or unpublished copyright. Businesses should regularly check to ensure their copyrighted materials and brands are not abused. Enterprises should also check products that businesses are selling without copyright infringement available in Vietnam.
Protect customer information
Businesses should be aware of the confidentiality of customer information and may not transfer US customers' personal information to a third party, which needs to thoroughly understand the legal constraints on this issue.
Support
Approaching a competitive new market always meets with initial difficulties. However, Vietnamese enterprises can seek appropriate support and assistance from government agencies, associations, trade agencies as well as customs clearance programs, workshops and Learn from businesses and customers who have experienced online business
Vietnam Commercial Branch in Houston (USA)


Source: Moit.gov.vn

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