The transition towards e-commerce platforms for the distribution of local specialties and consumer goods is a recognized market transformation, driven by the decline of traditional trade. Nevertheless, small and medium enterprises (SMEs), which constitute the majority of sellers, are experiencing vulnerability due to platform dependency, cost burdens, and substantial market exits. Deputy Minister of Industry and Trade Phan Thi Thang addressed the issue of SME sustainability and their role in economic development in an interview with SGGP Newspaper reporters.
A prevalent challenge faced by contemporary businesses, particularly SMEs, is the difficulty in accessing markets and establishing effective product distribution channels in competition with larger corporations, Deputy Minister of Industry and Trade Phan Thi Thang said. Furthermore, SMEs often encounter shortages of high-quality human resources, as well as constraints related to limited scale and production capacity.
Additionally, she added that securing financial capital remains a significant hurdle, as many SMEs struggle with insufficient collateral or unfavorable credit histories, which impede their ability to obtain loans. In the current development context, businesses in this group still lack understanding of the applications and benefits of advanced technologies such as artificial intelligence.
To attract customers, various businesses implement pricing strategies, including continuous and long-term promotional campaigns, to enhance commercial reach effectively, according to Deputy Minister Phan Thi Thang. Additionally, the promotion of products through social media, e-commerce platforms, key opinion leaders (KOLs) and key opinion consumers (KOCs) has been widely utilized by numerous enterprises across the country, from the North region to the South region.
Preliminary reports from market research firms indicate that while advertising effectively stimulates consumer interest and accelerates purchasing behavior, the average transaction value per order has declined. This suggests that purchases are often driven by novelty and price sensitivity, potentially impacting long-term business profitability and product quality. Therefore, a strategic equilibrium between price competition and quality/service differentiation is essential for sustainable business operations, she continued.
To remain competitive, businesses must develop a comprehensive strategic plan, rather than solely focusing on lowering prices.
The Deputy Minister revealed that a number of small businesses have recently penetrated the domestic market and diversified their export destinations successfully to enter markets in the United States, United Kingdom, France, and Japan despite limited advertising expenditure. Notable examples include Duy Anh Foods (rice paper, vermicelli), Quang Thanh Lettuce (gotu kola, perilla, celery, green tea), and Meet More Coffee in Ho Chi Minh City, alongside producers of bird's nest and wine powder in the Mekong Delta and Central Highlands regions. Although small and medium-sized enterprises may seem modest now, they hold immense potential. In the future, these businesses can achieve the success of major corporations, making invaluable contributions to national development. They are the seeds of future growth.
According to Ms. Thang, an improvement in regional economic development initiatives was seen across numerous localities, marked by effective public-private partnerships aimed at business assistance and market linkage. In Ho Chi Minh City, certain businesses are prepared to access preferential loans from the VND200,000 billion financial package, which offers competitive interest rates, to enhance their production capacity and maximize business profits. The market stabilization program in the southern largest city, which involves many small businesses, operates steadily, providing consumers opportunities to shop at affordable prices.
In addition to effective programs, according to her, methods need to guide people to do sustainable business with quality products and good services; have specific strategies to link growing areas, combine exploitation, product promotion and welcoming tourists, increasing the value of agricultural products. In addition to the efforts of businesses, each locality needs to have policies to support and nurture large businesses.
In an effort to bolster e-commerce participation among sellers, predominantly SMEs, the industry and trade sector has implemented a suite of supportive policies. These initiatives encompass training and consultancy programs, keyword-based e-commerce business guides, website management and online marketing workshops, and complimentary legal, accounting, and technological advisory services for SMEs.
The industry and trade sector will facilitate opportunities for small and medium-sized enterprises to access and integrate with major e-commerce platforms. Additionally, it organizes trade promotion programs, showcases products through various media channels, and supports businesses in brand development and expanding customer reach.
Moving forward, the Ministry of Industry and Trade will prioritize the development of the Law on E-commerce to enhance the efficacy of state management, foster sustainable and orderly e-commerce growth, and drive digital economic development. Concurrently, sellers are advised to proactively augment their digital literacy and online business acumen, leverage digital technologies and e-commerce platforms, and establish independent online sales channels. Utilizing existing platforms such as Facebook, Lazada, Shopee, Sendo, and Tiki for website management, online marketing, transaction processing, and customer service is strongly recommended for sellers.
Next, the ministry will restructure the business model, enhance product and service quality, and reduce reliance on a limited number of sales channels. Additionally, it will optimize the supply chain to lower operating costs while prioritizing loyal customer segments with strong purchasing power.
