The E-Commerce War Heats Up
The E-Commerce War Heats Up
And HCMC's metro for Christmas?
Good morning! Hello to new readers, and welcome to the latest edition of the Vietnam Weekly, written by Ho Chi Minh City-based reporter Mike Tatarski. The Friday version of the newsletter is always free to read.
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On to the news.
The E-commerce Onslaught
Last month Temu, the fast-growing Chinese e-commerce platform that has courted controversy worldwide and booked commercials during this year’s Super Bowl in the U.S., debuted in Vietnam.
This has spurred much consternation in domestic media, with Vietnamese vendors on Shopee, TikTok Shop, and Lazada - the biggest current e-commerce platforms here (none of which are Vietnamese) - allegedly being undercut by new Chinese competitors.
That competition includes Shein, Temu’s low-cost Chinese peer - the two corporations are locked in a bitter legal dispute themselves.
Huge discounts are how Shein and Temu (or any new platform, really) attract customers: VnExpress shared the story of a Hanoi customer who bought a dashboard camera through Temu for US$2.80, a fraction of what it would have cost on Lazada/Shopee.
Beyond stiff competition, there are legal issues at play: the Ministry of Trade requires any e-commerce platform with a Vietnamese domain, content in Vietnamese, or over 100,000 transactions annually to register domestically.
Temu isn’t registered as a business yet, while the HCMC Department of Industry and Trade wants to block ads for excessive discounts on the platform (as well as Shopee).
Vietnamese authorities have been slower to move on this than some of their regional peers.
Earlier this month Indonesia blocked the Temu app in a bid to protect domestic vendors, and the government there previously banned TikTok Shop (though not by name), forcing that Chinese giant to partner with an Indonesian company.
In September, Thailand began taxing imports valued at less than THB1,500 (US$44), closing a loophole that many goods from international e-commerce platforms fit through. Thai manufacturers are calling for further regulations.
Vietnam currently exempts imported goods below VND1 million (US$39) from value-added tax, though this week the finance minister said that policy would be eliminated. (Not sure what that timeline is.)
By the end of September, Vietnamese consumers had spent an average of US$1 billion per month on online shopping, and Vietnam is the fastest-growing e-commerce market in Southeast Asia. The financial stakes here are massive.
There are other concerns, such as all the packaging waste created by this torrent of small-value orders - though it’s worth noting that allegations over copyright infringement and forced labor aimed at Temu and Shein largely from developed markets aren’t getting any play in Vietnam.
Meanwhile, Lam Le of Rest of World has a great feature on how many vendors at traditional markets here are reluctant to embrace e-commerce platforms.
A quick music break: My friends at Loud Minority, one of the few promoters bringing high-quality international live music to Vietnam, have announced that Jack White will play in HCMC on December 2. He performed here in 2022 and it was an incredible show, so don’t miss out if you’re in town - tickets are available here.
Can Billionaires Save Ha Long Bay?
In May, I wrote about the curious fixation domestic media has with billionaires, a demographic portrayed with notable admiration.
News outlets aren’t alone in this sentiment.
In mid-October the administration of Quảng Ninh Province announced that it aims to identify seven deserted islands and secluded beaches in Hạ Long Bay that will be developed exclusively for billionaires.
Tours for the “super-rich” offering “unprecedented and special” experiences are now set to launch this month. According to VnExpress, the first group “includes a U.S. billionaire whose identity has not been disclosed to ensure privacy.” The tour will be organized by All Asia Vacation, which led Bill Gates’ obsessively covered visit to Đà Nẵng in March.
The coverage of this tour included one particularly odd sentence (credit to Stuart McDonald of Travelfish for pointing it out): “The company will ensure that trash on the islands and in surrounding areas is cleaned up before guests arrive, and the islands will be returned to their original state after each trip.”
So does that mean they will put the trash back?
Whatever the case, this is pitched as a way to increase visitor numbers and tourism revenue for Quảng Ninh, with officials emphasizing their belief that the wealthy contribute more than regular tourists - however I don’t see how these tours will benefit more than the one or two companies involved in running them, especially with visitors arriving on private jets and then being whisked around by private drivers and boats.
Sticking with the bay and billionaires, in January the ‘Art for Climate Hạ Long Bay’ festival will take place, with officials claiming that “over 200 billionaires from Europe" will attend.
Amusingly, even VnExpress doesn’t seem to believe that, noting that Europe has fewer than 600 billionaires in total.
Finally, domestic media devoted detailed articles to five private jets that brought - you guessed it, billionaires - to Đà Nẵng for a conference last month.
A Metro for Christmas?
On Monday the HCMC Management Board for Urban Railways (MAUR) began a 50-day campaign to finalize the hideously delayed Bến Thành – Suối Tiên metro line and open it to the public on December 22.
Officials say that work on the project is 99.9% complete, and in early October, MAUR began daily trial runs on the route.
In late September, the municipal People’s Committee said the line would open by the end of the year, a timeline that Prime Minister Phạm Minh Chính has demanded too.
This would be fantastic for the city, though any announcement of a completion date has to be taken with a grain of salt at this point. I certainly hope this happens - we will see!
In the meantime, enjoy this story about tourists being confused by the presence of street signs pointing to metro stations when the metro isn’t running yet.
Data Corner:
At least 1,062: The number of diamonds smuggled into HCMC by two separate Indian nationals on separate flights, one last Wednesday and another last Friday.
Eight: the number of years Lê Anh Xuân, the owner of a karaoke parlor in Bình Dương where a fire killed 32 people in 2022, will serve in prison. Five former firefighting officials were also jailed for violating fire safety regulations.
21.8%: HCMC’s public budget disbursement rate as of October 25. The city needed to invest about US$400 million per month starting in August to reach its year-end goal, but has only hit about US$50 million per month.
Extra Links:
Bullied by China at Sea, With the Broken Bones to Prove It (The New York Times)
Triangle Trouble: What’s Next for Vietnam’s Indochina Strategy? (Fulcrum)
Weaving Nation and Nature: The Rise of Indigenous Textiles in Vietnam’s Eco-fashion (Heinrich-Böll-Stiftung Southeast Asia)
Can incinerators solve Viet Nam’s waste crisis? (Mekong Eye)
Media Relations in Vietnam: Lessons from VinFast (The Shiv)
Have a great weekend!
