2006 vietnam e

MINISTRY OF TRADE
VIETNAM
E - COMMERCE
REPORT
2006
Hanoi, January 2007
MINISTRY OF TRADE
VIETNAM
E - COMMERCE
REPORT
2006
Hanoi, January 2007
Note
This report has been published by the E-Commerce Department,
Vietnam Ministry of Trade. The presentation of the material in this
publication reflects the results of empirical research and surveys,
and do not imply the expression of any opinion whatsoever of the
Vietnam Ministry of Trade.
Material in this publication may be freely quoted or reprinted, but
full acknowledgement is requested, with reference to “Vietnam ECommerce Report 2006” by Vietnam Ministry of Trade.
This report may be obtained by direct request to the E-Commerce
Department, Vietnam Ministry of Trade, 21 Ngo Quyen, Hanoi.
http://www.mot.gov.vn
FOREWORD
Year 2006 has opened a new phase of Vietnam e-commerce development, marked by official legislative
recognition of e-commerce and dramatic development of e-commerce in all aspects.
Following the Vietnam E-commerce Reports from 2003 to 2005, Vietnam E-commerce Report 2006 presents
an overview of e-commerce development and application in all areas of the socio-economic life, highlighting
the areas with most outstanding progress in the past year.
The Report was drafted basing on the collection and analysis of data, research, survey, and interviews to paint
an inclusive and faithful picture of Vietnam e-commerce status as of 2006. This year’s Report recognized that
e-commerce had become popular among the population as well business communities, B2B e-commerce
rapidly developed in all dimensions, public services much improved with increasing IT application in
administrative procedures by state agencies. Nonetheless, year 2006 also witnessed several drawbacks such
as delayed promulgation of guiding texts for the E-transaction Law and failure to tackle the security issue as
well as other emerging issues that hinder e-commerce development.
From the Report’s analysis and evaluation, we hope that in the context of vigorous economic development
to the direction of socialist – oriented market economy, considering Vietnam’s recent accession to the WTO,
Vietnam e-commerce will see new and viable developments in the years to come.
On behalf of Ministry of Trade, I would like to express our sincere thanks to all organizations, enterprises,
press agencies, and experts who have rendered their enthusiastic cooperation during the making of this
Report. We look forward to your comments and suggestions with the view to continuously improve the
quality of our annual E-commerce Development Report.
Hanoi, Spring 2007
Le Danh Vinh Ph.D
Vice Minister of Trade
i
OVERVIEW
Year 2006 has been a significant milestone for Vietnam e-commerce development, being the first year
when e-commerce is officially recognized by law as the E-Transaction Law, the Revised Commercial Law,
and the Decree on E-Commerce came into effect. Year 2006 has also been the first year for implementation
of the Master Plan on E-commerce Development for the 2005-2010 period stipulated by Prime Minister’s
Decision 222/2005/QĐ-TTg dated 15 September 2005.
The spectacular development of e-commerce in 2006 has been associated with rapid and sustainable
economic development. Trade continued its vigorous growth, constituting a significant drive for economic
development. Year 2006 witnessed in-depth and all-round integration of Vietnam economy into the world.
Vietnam has become the official 150th member of the World Trade Organization, and also fulfilled its role as
host country for APEC 2006, manifesting a strong commitment to continuous open-door policy. International
economic integration requires that businesses pay serious consideration to increasing their competitiveness,
for which e-commerce provides an effective means that many businesses choose to employ.
Businesses’ interest in e-commerce has been proven by ever-rising transactions on e-Marketplaces,
diversified online services and escalating revenue from e-commerce. Also, the number of business
websites, especially websites with domain names .vn has been rapidly increasing, number of business
people attending e-commerce training courses were much higher than the previous year. A majority
of businesses have recognized the benefits of e-commerce in cutting transaction costs and expanding
the market, both domestically and abroad. Many businesses have succeeded in forming contracts with
partners via e-Marketplaces.
Following are the five outstanding features of Vietnam e-commerce in year 2006:
1.
E-COMMERCE BECAME POPULAR
E-commerce continued to expand into new business categories, among which was the provision
of content to electronic devices. Despite being newly formed, business in this field have been widely
conducted and proven to be lucrative. Revenue from value-added services on mobile devices has rapidly
increased. Business in online training, online news and database services, online games, interactive TV
games, online movie and music services has also witnessed vigorous growth.
Together with the proliferation of Internet users and credit card users, number of consumers doing online
shopping has rapidly grown, especially among the urban youth. Consumption psychology and shopping
pattern started to shift from traditional mode to modern methods of e-commerce.
2.
BUSINESS TO BUSINESS (B2B) E-COMMERCE RAPIDLY DEVELOPED
Increasingly easier access to high bandwidth Internet with decreasing cost, together with the urging
demand of improving competitiveness as Vietnam officially joined the world market are the two major
factors that spured businesses’ interest in e-commerce. Survey results showed that 92% of the interviewed
businesses have Internet connection, 81% of which through ADSL. Number of businesses participating in
Vietnamese and foreign B2B e-marketplaces rapidly increased, many of which have found new partners
and business deals. The use of emails in business transactions have become universal, moreover, many
iii
businesses started to use Internet as a distribution channel for their goods and services. In 2006 B2B ecommerce has rapidly developed, constituting a highly positive feature in the e-commerce picture as
compared to year 2004 and 2005.
3.
ONLINE PUBLIC SERVICES IMPROVED
For enhanced national competitiveness, the State is also faced with the need of reform, through
modernizing its administration and establishing an e-Government. State agencies have, for the past
year, accelerated information technology application in communication with businesses and citizens.
A majority of ministries and provincial administrations have had websites, through which to provide
useful information for businesses. A number of Central and provincial administration agencies started to
provide online public services at the initial level, such as online business registration, electronic customs
declaration, online public procurement notice, and electronic certificate of origin (C/O).
4.
LEGAL TEXTS TO GUIDE THE IMPLEMENTATION OF THE
E-TRANSACTION LAW WERE SLOW TO BE PROMULGATED
The Government issued the E-commerce Decree numbered 57/2006/NĐ-CP on 9 June 2006, marking a
big progress in building a complete legal framework for e-commerce. This Decree recognized the legal
effects of electronic communications in trade-related activities. This is the foundation for businsesses
and consumers to conduct e-commerce transactions, facilitating e-commerce development, protecting
lawful rights and interests of participants, and serving as the legal basis for settling disputes related to
e-commerce The E-commerce Decree was the first Decree to instruct the E-transaction Law and the sixth
to instruct the revised Commercial Law that has been issued.
Many ministries and relevant authorities have made big efforts in formulating other decrees to instruct
the E-transaction Law, such as the Decree on digital signature and C/A services, Decree on electronic
transaction in banking, and Decree on electronic transaction in financial activities. However, to the end of
year 2006, none of these decrees has been issued.
5.
MANY OBSTACLES TO THE DEVELOPMENT OF E-COMMERCE STILL
EXISTED
Regular review of legal texts related to e-commerce was yet to be conducted. Several regulations
hindering the development of e-commerce that were subject to wide complaints for the past years
remained untackled. Regulations of website licensing and domain name trading were lagging behind.
Together with technology advances, the quick development of e-commerce always pose new challenges
to the legal system governing e-commerce. The booming of online games has induced questions about
the legal effects of virtual property, domain name disputes raised the need of a proper management
mechanism for this special resources, the prevalence of commercial advertisement e-mails required
corresponding measures to protect email users.
Issues of cyber security and crimes related to e-commerce are also the focus of public attention in year
2006. Technology-based crimes tended to increase, most notably were attacks aimed at e-commerce
websites www.vietco.com and www.chodientu.com. Besides, bank account hacking and credit card theft
have also affected e-commerce activities in Vietnam..
iv
The vote for 5 outstanding e-commerce events in year 2006 organized by the Vietnam Television has
produced the following results: 1) Vietnam successfully host e-commerce conferences within the
framework of APEC; 2) The E-transaction Law came into effect; 3) The National E-commerce Portal (ECVN)
reached out to the world market; 4) The E-commerce Decree was promulgated; 5) One of the leading
e-marketplace of Vietnam was attacked. This vote showed the society’s widespread concern of security
issues, and presented urgent need for an effective legal framework to tackle high-tech crimes.
In 2006, e-commerce training and awareness raising activities have improved both in tensity and quality,
but still lagging behind society’s demand. Research and development activities related to e-commerce
were practically absent.
If 2005 was the last year of the period whereby e-commerce was formed and officially recognized by
Law, 2006 has opened a new period of development involving all relevant aspects, from policy and legal
framework to practical transactions among businesses and consumers, as well as diverse support from
State agencies. This is a promising signal for leapfrog development of e-commerce in the coming years,
contributing to overall trade and economic growth of the nation.
v
CONTENT
OVERVIEW
iii
CHAPTER 1 - ENVIRONMENT FOR E-COMMERCE DEVELOPMENT
1
I. Social awareness and human resources for e-commerce
3
1. Social awareness of e-commerce
3
1.1. Consumers awareness
4
1.2. Businesses awareness
4
1.3. Awareness about security in conducting e-commerce
5
1.4. Awareness raising activities
6
2. Training and developing human resources for e-commerce
2.1. Demand
9
9
2.2. Forms of training
10
2.3. Lecturers
11
2.4. Textbooks
12
II. Policies and law for e-commerce development
13
1. Policies
13
1.1. Implementation of the Master Plan for E-commerce Development in the 2006-2010 period
13
1.2. Polices related to e-commerce
15
2. Law
15
2.1. E-commerce Decree guiding the Electronic Transaction Law and the Commercial Law
17
2.2. Specialized law
18
2.3. Other legal issues
21
III. Technology infrastructure and support services for e-commerce
27
1. Information technology industry
27
1.1. Hardware industry
27
1.2. Software industry and IT services
28
2. Telecommunications and Internet
28
3. Electronic payment
30
3.1. Development of the card payment market
30
3.2. E-banking services
31
3.3. Mobile payment
32
vii
CHAPTER 2 – ONLINE PUBLIC SERVICES
35
I. Background
37
1. Basic functions of an administrative agency’s website
37
2. Public services and online provision of public services
37
3. Ministries and localities’ readiness for ICT application
40
II. Information provision and online public services on ministries’ websites
43
1. Overall
43
1.1. Number of websites
43
1.2. Websites’ interface
44
1.3. Websites’ features
44
1.4. Quality and content of websites
46
2. Information provision
46
2.1. Information provision
46
2.2. Online interaction and exchange of information
47
3. Status of online public services
48
3.1. Disclosure of public services procedures on websites
48
3.2. Online provision of public services
51
III. Information provision and online public services on provicial websites
55
1. Overall
55
1.1. Number of websites
55
1.2. Webistes’ interface
56
1.3. Websites’ features
56
1.4. Quality of website contents
58
2. Information provision
58
2.1. Information provision
58
2.2. Online interaction and exchange of information
59
3. Online public services
59
3.1. Disclosure of processes, procedures and progress of handling public services on websites
59
3.2. Online provision of public services
60
CHAPTER 3 - SOME TYPES OF ONLINE SERVICE BUSINESS
65
I. Background
67
1. New direction for businesses
67
2. Eventful but unbalanced development
68
3. Orientation of development
69
viii
II. Online advertisement
70
1. The establishment of online advertisement
70
2. Currently low turnover but high potential
71
III. Online entertainment
72
1. Online games
72
1.1. Legal framework
72
1.2. Increased number of online games and providers
73
2. Online television and music
74
2.1. Large firms launched online television services
75
2.2. Online music-video developed in more professional manner
75
IV. Online education
76
1. Background
76
1.1. Advantages and disadvantages of online education business
76
1.2. Benefits of online education
77
2. Direction of development
77
2.1. Universities with online education
77
2.2. Enterprises with online education
79
V. Other online value added services
81
1. E-newspapers
81
1.1. E-newspapers gain popularity
81
1.2. Going online to reinforce market position
82
2. Value-added services for mobile networks
84
2.1. Types of content provision for mobile networks
84
2.2. Current market status
85
CHAPTER 4 - E-COMMERCE APPLICATION AND E-COMMERCE BUSINESSES
89
I. E-commerce application in enterprises
91
1. E-commerce readiness of enterprises
91
1.1. Use of computers in enterprises
93
1.2. IT and e-commerce training
94
1.3. Telecommunications and Internet infrastructure
95
1.4. Purposes of using Internet in enterprises
96
1.5. Network construction and use
96
1.6. Obstacles to the use of Internet in enterprises
97
ix
2. Level of e-commerce application
98
2.1. Better identified strategy in applying e-commerce
98
2.2. Increased number of enterprises with e-commerce staff
98
2.3. High rate of enterprises having websites
98
2.4. Higher frequency of information updates on websites
100
2.5. Rapidly increased number of enterprises participating in e-marketplaces
100
2.6. More vigorous IT application in enterprises
101
2.7. Diversified e- transaction forms but limited choice of delivery methods
102
2.8. Introduction of many payment methods
103
3. The effectiveness of e-commerce application
104
3.1. Investment in e-commerce
104
3.2. Effectiveness of e-commerce investment
105
3.3. Obstacles to e-commerce application
107
3.4. Impact of e-commerce on business
107
II. Status of e-commerce businesses
108
1. Business-to-Business e-marketplaces model (B2B)
108
1.1. Overview
108
1.2. Typical e-Marketplaces of 2006
109
2. Business-to-Consumer model (B2C)
110
2.1. Goods and services on B2C websites
110
2.2. Business on B2C websites
112
3. Consumer-to-Consumer model (C2C)
114
4. Participation in e-marketplaces and new vision of business strategy
115
x
LIST OF BOXES
Box 1.1
Electronic payment applied in essential services
4
Box 1.2
Crimes in C2C e-commerce transactions in 2006
5
Box 1.3
Role of community and awareness raising activities in the prevention
of violations via the Internet
6
Box 1.4
E-commerce forum on www.mot.gov.vn
8
Box 1.5
Sao Khue 2006 award for e-commerce solutions
9
Box 1.6
Human resource requirement for e-commerce
9
Box 1.7
Investment in human resource development for e-commerce
10
Box 1.8
Enterprises to provide e-commerce training services
11
Box 1.9
Stands on e-commerce training
13
Box 1.10
State agencies with the implementation of Electronic Transaction Law
18
Box 1.11
Several documents guiding tax and customs procedures for export and import of
software via the Internet
19
Box 1.12
Validity of electronic communications in finance activities
20
Box 1.13
Difficulties in implementing electronic airtickets at Vietnam Airlines
21
Box 1.14
The government to handle software infringement
22
Box 1.15
Many big banks lost their “.vn” domain names due to negligence in domain registration 23
Box 1.16
Mechanisms to handle spam emails
25
Box 1.17
Drastic penalties for high-tech criminals are urgently needed
26
Box 1.18
Typical website attacks in 2006
26
Box 2.1.
Contents of developing e-Government in the Strategy for ICT Development towards 2010
39
Box 2.2
Websites of the Government, the Party and the National Assembly
44
Box 2.3
The State Website helps broaden communication between Government and citizens
48
Box 2.4
Description of a licensing process on the website of Ministry of Industry
49
Box 2.5
Description of a licensing process on the website of Ministry of Trade
50
xi
Box 2.6
3 implementation stages for electronic issuance of certificate of origin
53
Box 3.1
Efficiency of online education at the Post and Telecommunications Institute
79
Box 3.2
An example of online education
80
Box 3.3
Online English training
81
Box 3.4
Vnexpress to be listed among Top 500 websites of Alexa.com
82
Box 3.5
Some features of e-newspapers
82
Box 3.6
Benefits of e-newspapers
83
Box 4.1
Enterprise resources planning (ERP) in implementation
102
Box 4.2
Hapro to implement e-commerce
105
Box 4.3
Experience of e-commerce application and development in a handicraft enterprise
106
Box 4.4
Success story of a B2B portal
110
Box 4.5
A successful B2C model
113
Box 4.6
A newly established C2C e-Marketplace in 2006
114
xii
LIST OF FIGURES
Figure 1.1 Growth of Vietnam Internet users from 2000-2006
29
Figure 2.1 Model of e-customs operation
61
Figure 3.1 Participants and total revenues from some online services
68
Figure 3.2 The rate of users and paid users – indicators of growth potential of online service business
69
Figure 3.3 Revenues from online advertising of Vnexpress and Vietnamnet
71
Figure 3.4 Turnover from message services of VASC from 2004 to 2006
86
Figure 3.5 Market shares of value added services for mobile networks
86
Figure 4.1 Workforce scale of surveyed enterprises
92
Figure 4.2 Workforce scale of garment enterprises
92
Figure 4.3 Comparison of workforce distribution between mechanics and transportation industries 93
Figure 4.4 Computer distribution in enterprises
93
Figure 4.5 Internet access methods of enterprises
96
Figure 4.6 Security obstacles as evaluated by enterprises
97
Figure 4.7 Percentage of enterprises having websites
99
Figure 4.8 Updating frequency of enterprises’ websites
100
Figure 4.9 Correlations between number of e-commerce staff and level of participation
in e-Marketplaces
101
Figure 4.10 E-commerce investment and turnover comparision
105
Figure 4.11 Garment products on BTSPlaza
111
Figure 4.12 Price comparison interface of AHA - a C2C e-market place
115
xiii
LIST OF TABLES
Table 1.1
E-commerce topics discussed on VOV’s technology forum in 2006
7
Table 1.2
Training programs on e-commerce at universities
10
Table 1.3
Survey findings on e-commerce lecturers
12
Table 1.4
List of localities and their projects on e-commerce deployment
14
Table 1.5
List of policies related to e-commerce
15
Table 1.6
Legal texts on e-commerce promulgated in 2006
16
Table 1.7
List of guiding decrees for the Commercial Law
17
Table.1.8
IT industry value of Viet Nam in 2002-2005
27
Table 1.9
Vietnam’s PC statistics in comparison with the world
28
Table 1.10 Top Internet service providers in Viet Nam
29
Table 1.11 Indicators for Internet development in Vietnam and the world
30
Table 1.12 Some statistics of Vietnam’s card payment market
31
Table 2.1
Some public services in the trade sector
38
Table 2.2
E- Readiness ranks of Ministries
40
Table 2.3
20 localities with highest e-readiness level
42
Table 2.4
Summary of some features on 29 currently operational Ministry websites
45
Table 2.5
Summary of language display on 29 currently operational Ministry websites
45
Table 2.6
Disclosure of procedures of public services on some Ministry websites
49
Table 2.7
Summary of features of 52 operational city and province websites
57
Table 2.8
Summary of languages used on 52 operational city and province websites
57
Table 2.9
Some statistics about e-customs procedures
63
Table 3.1
Some major news websites for online advertisement services
70
Table 3.2
Market allocation of electronic games businesses
73
Table 3.3
Some most popular online games
74
xiv
Table 3.4
Some online broadcast channels
75
Table 3.5
List of typical online training websites
80
Table 3.6
Comparison between independent e-newspapers and online version of newspaper
83
Table 3.7
Current popular services
84
Table 3.8
List of enterprises with message services at 8xxx
85
Table 4.1
Average number of computers by industries
94
Table 4.2
Training methods of enterprises
95
Table 4.3
Level of network use of enterprises
97
Table 4.4
E-commerce projects of enterprises
98
Table 4.5
Functions and features of websites
99
Table 4.6
Popular e-marketplaces
101
Table 4.7
Ordering methods through electronic means
103
Table 4.8
Payment methods
103
Table 4.9
Investment in e-commerce out of total investment
104
Table 4.10 Obstacles to e-commerce application
107
Table 4.11 Impact of e-commerce strategy on business activities of enterprises
107
Table 4.12 Benefits from membership of ECVN
109
Table 4.13 Assessment of members of service quality of ECVN
109
Table 4.14 Booking turnover through www.hotels.com.vn during first 2 quarters of 2006
111
Table 4.15 E-commerce turnover of BTS Plaza in 2006
112
xv
CHAPTER 1
ENVIRONMENT
FOR E-COMMERCE
DEVELOPMENT
CHAPTER 1
ENVIRONMENT FOR
E-COMMERCE DEVELOPMENT
Following stable and rapid economic development of the 2001-2005 period, Vietnam economy in 2006
continued its high-rate growth with an 8.17% increase in GDP.1 Trade maintained vigorous growth.
For foreign trade, export turnover totaled USD 39.6 billion, import turnover reached USD 44 billion,
corresponding to a 22.1% and 20.1% increase, respectively, as compared with year 2005. For domestic
trade, total value of product and service retail reached 523,500 billion VND, 20.9% higher than that of
year 2005.2
Year 2006 witnessed full and all-round integration of Vietnam into the global economy with milestone
events, such as becoming the 150th member of WTO, successfully organizing the 14th APEC Summit
and having Permanent Normal Trade Relations (PNTR) status approved by the US Congress. This socioeconomic setting has created favorable conditions for e-commerce development.
I.
SOCIAL AWARENESS AND HUMAN RESOURCES FOR E-COMMERCE
1.
Social awareness of e-commerce
According to result of the survey conducted by Vietnam Ministry of Trade among 1077 enterprises, social
awareness of e-commerce has been evaluated as a prime obstacle for e-commerce development in
Vietnam. This evaluation showed increased attention of enterprises to the importance of human and
social factors in e-commerce development. However, creating social awareness about a new business
method is a long and complicated process, requiring active participation of all stakeholders, from state
agencies, media, social organizations to businesses and consumers. Although awareness of different
interest groups in the society may change at different paces, overall social awareness of e-commerce in
2006 has seen great improvement as compared to the previous years.
1. Report at the regular Cabinet meeting, December 2006
2. Source: Investment and Planning Department, Ministry of Trade
3
1.1.
Consumers awareness
In 2006, along with the progress of electronic banking services and penetration of electronic payment
to a number of utility industries like electricity, water supply and telecommunication, etc., consumers’
awareness of modern payment methods has been much improved. Card use habit has begun to take
shape in big cities.
Box 1.1 Electronic payment applied in essential services
Hanoi Post accepted tax payment through ATM
From 8/1/2006, customers using services of Hanoi Post can make payment through ATM system.
Currently, electronic tax payment can be made with ATM cards issued by Vietcombank and
Incombank. All transactions are free of charge. The bills are sent to customers’ address after epayment had been completed.
Danang Electricity cooperated with EAB to provide payment service through ATM cards
Danang Branch of East Asia Bank signed a contract with Danang Electricity to launch a new service
enabling customers to automatically make payment for monthly electricity bills since August 2006.
This payment is performed via EAB’s multimedia card (MMC). To use the service, customer must
have ATM issued by EAB (freely issued) and come to make registration at EAB’s branches or EAB
representative offices in Danang City.
E-Commerce Weekly News Review from 14th to 19th August 2006 at www.mot.gov.vn
According to the statistics by Vietcombank (VCB), in 2005, the value transacted via VCB’s ATM cards accounted
for only 1% of the total value transacted between cardholders and the bank. In 2006, the figure increased to
15%. Up to 6/2006, 1.2 million VCB’s ATM cards were issued with aggregated balance totaling 3.000 billion
VND. In average, each account has a balance of 2.5 million VND.3 Card payment was merely at the first stage
of development; however, they reflected a shift from the habit of cash payment among the population. With
increasing popularity of ATM cards, modern purchase method and consumption pattern have been formed,
which created a strong momentum for widespread e-commerce application in the society.
Beside changes in cash usage habit, purchase pattern and consumption practice have also been greatly
altered by the increase of information content in the economy. Consumers, especially the youth and highincome people, are more educated and have better access to information, thus more sophisticated needs.
In this context, e-commerce was an ideal solution, enabling consumers to gather information and expand
their product choices. More and more Internet users in Vietnam is beginning to take part in e-commerce
from simple activities as searching information, studying about products and services, etc. to directly
purchasing Internet-based services like online games, digital music or software.
1.2.
Businesses awareness
Improvement in businesses’ awareness of e-commerce is reflected in the result of the survey conducted by
Ministry of Trade with 1,077 enterprises nationwide. The survey result is discussed in Chapter 4 of this Report.
3. Weekly Commercial Fast news from 7/10 to 7/15/2006 at www.mot.gov.vn
4
1.3.
Awareness about security in conducting e-commerce
E-commerce activities take place in a new economic sphere which is remarkably different from traditional
business and embedded with particular risks. To benefit from the efficiency yielded by e-commerce,
participating parties need to beware of these risks and equipped themselves with proper knowledge
for self-protection in that environment. Many violations and defrauds related to e-commerce during the
past year were made possible partly because consumers were not thoroughly aware about security issues
when participating in e-commerce.
Box 1.2 Crimes in C2C e-commerce transactions in 2006
Defraud in C2C transaction
In September 2006, High-Tech Crime Prevention Team (C15 – Ministry of Public Security) conducted
an investigation and summoned Dao Anh Tuan who performed a fraud via the Internet to occupy
20 million VND from members of online forum TTVNOL.
In the middle of May 2006, after joining this forum, Dao Anh Tuan with the nickname Enquire81
acted as a broker to purchase goods with competitive prices on behalf of buyers with low
commission. Tuan required the members who want to purchase goods to make deposit of 50%
of the total value of goods, transferring via bank accounts. After receiving nearly 20 million VND,
instead of sending such goods as laptops and high quality clothes made in USA, Tuan sent buyers
old cloths and rusted electronics boards. The victims laid a petition to the police and after 2 months
of investigation, with the cooperation of Bach Khoa Network Security Center, C15 brought out all
the fact of the defraud.
Forgery of ATM card
Investigation Department from the Ministry of Public Security has just finished an investigation on
faking ATM cards and suggested the People’s Supreme Procuracy arrest 10 criminals led by Nguyen
Anh Tuan- president of RC company’s management board. This criminal group stole information
of credit-card holders then made faked ATM to withdraw 2.6 billion VND. The investigators seized
exhibits including 10 computers, 4 ATM printer machines and some others assets purchased by
stolen money.
VietnamNet, 18/09/2006 http://www2.vietnamnet.vn/cntt/2006/09/613153/
Apart from organized crimes such as fraudulence and card forgery, year 2006 also witnessed an outbreak
of harassment and corruption in the cyberspace, like dispersing virus or hacking e-commerce websites.
Those deeds might, at the beginning, just start from ill awareness of some people but ended up causing
huge social impacts, deteriorating consumers’ confidence and destroy the stability of Vietnam e-commerce
environment. On the other hand, the proliferation of impacts and scale of these violations showed that
social awareness about self-protect methods when participating in e-commerce was low. Therefore,
this issue should be addressed as priority of propaganda activities to increase public awareness of ecommerce in year 2007.
5
Box 1.3 Role of the community and awareness raising activities in the prevention of Internet crimes
It is a common knowledge that awareness of the community is the key factor to fend off the
epidemic of Vietnamese-virus dispersed via chat tools.
“As long as users are well-aware, some people can write simple firewall software that can recognize
links infected with virus and be integrated with chat tools to prevent computer users from downloading
harmful links. In case computers are infected by a virus, computer users can automatically update the
link and the virus to this software. In that way, new viruses will be continuously updated into the system’s
blacklist and fewer computers will be infected.” – suggested a Vietnamnet’s reader.
Instead of placing the responsibility on authorities and network security organizations, computer
users should stand together for self-protection, that is both cost and time effective.
Current awareness of computer users on self-protection is still limited. Some computers were
continuously infected by all kinds of Vietnamese viruses but their users still did not learn from the
experience. Following repetitive warning by specialists about self-protection measures, here again
are several tips for computer users:
- Do not click on a strange link or unknown attached file sent via chat or email (it would be better
to ask the sender before opening it)
- Use at least one anti-virus software package, scan virus and frequently update information.
Usually download repairing programs of software providers like Microsoft, etc
- Close all of programs that can be infected by virus like YM, Outlook Express, web mail, etc when
computer is infected by virus and inform as soon as possible IT department or other appropriate
authorities to solve the problem.
Vietnamnet on 16th September 2006, http://www2.vietnamnet.vn/cntt/2006/09/612476/
1.4.
Awareness raising activities
Changing and raising awareness about e-commerce is a gradual process that requires high level of
commitment and participation of all stakeholders, particularly businesses and mass media. These two
groups are the most dynamic forces who always keep abreast with new trends and movements in society.
With their active involvement, e-commerce propaganda activities in 2006 have been blooming.
1.4.1.
E-commerce awareness raising on traditional media
Television, radio and newspapers are 3 major media that have proactively partaken in e-commerce
propaganda during year 2006.
The introduction of digital television channel 5 (VTC5) on 8/1/2006 brought to TV viewers more diverse information
about technology in general, and useful knowledge about e-commerce in particular. Right upon its inception,
VTC5 launched exciting programs such as Digital House, Digital Enterprise, Mobile Culture, Games World, Online
Life Style, Product – Application, Digital Window, etc. These programs have spread notion of e-commerce among
the public, creating considerable improvement in awareness and consumption pattern of the society.
6
“Digital Life” of VTV1 is a highly popular program that attracts vast attention of the viewers. During 2006,
this program broadcast 18 reports on e-commerce, introducing various applications and promoting ecommerce among the mass.
The Voice of Vietnam (VOV) Radio is also active in propagandizing e-commerce to their audience throughout
the country. The program “Informatics and Life” broadcasted 30 minutes per day provides lots of useful
knowledge of e-commerce. In addition, VOV has other exciting programs to popularize e-commerce legal
documents and discuss particular issues of interest such as e-payment, security, or transaction process
in e-commerce. Moreover, each month VOV operates a special talk show on technology issues. This is a
forum for VOV’s audience and specialists to discuss different topics including e-commerce.
Table 1.2 E-commerce topics discussed on VOV’s technology forum in 2006
No.
Topic
1
Vietnam E-Commerce Portal – one year after launching
2
Legal documents guiding the Electronic Transaction Law
3
Security in e-commerce - Warning bell
4
E-commerce writing contest
5
Vebiz E-commerce Forum
6
SMEs to participate in e-commerce
Beside televisions and radios, newspapers and magazines are also regarded as important propaganda
channels for e-commerce. Major newspapers have created a specialized Information Technology column
to provide information about e-commerce events and activities, such as the PC World, the Labor, Vietnam
Economic Times, etc.
Unlike newspaper, electronic news websites cater to viewers that have ready access to and certain
knowledge of Internet applications. With various advantages as convenience, low cost and high update
frequency, electronic news is an effective propaganda channel for e-commerce, attracting increasing
number of viewers. Special columns like Digital Life Style (www.tuoitre.com.vn), Computer (www.
vnexpress.net), Informatics and Communication (www.vietnamnet.com.vn), Computer and Internet
(www.24h.com.vn), Science and Technology (www.tienphongonline.com.vn), E-commerce (http://
chungta.net) have attracted vast attention of readers.
1.4.2.
Awareness raising on corporate websites and e-commerce forums
E-commerce knowledge is also readily available on websites of e-commerce enterprises, where consumers
or enterprises could study about e-commerce from beginning to advanced levels. In addition to columns
providing tips or instructing skills in e-commerce transactions, these enterprises’ websites also host
special-issues sections and online libraries for e-commerce.
Online forum is also an effective e-commerce propaganda channel. Some forums on e-commerce have
attracted active participation and discussion of large number of members.
7
Box 1.4 E-commerce forum on www.mot.gov.vn
The E-commerce forum on www.mot.gov.vn is a policy forum that has drawn vast attention of the
public. The forum has created a multilateral communication channel for people to discuss issues of
common interest and participating in policy making related to e-commerce.
During 2006, a variety of legal issues for e-commerce development were subject to heated
discussion on this forum, such as the Decree on E-commerce or the Circular on e-mail
advertisement. Besides, many web surfers wished to study issues concerning e-commerce like
e-payment, e-commerce websites, e-commerce practices throughout the world, etc. Therefore,
those issues were also hot topics.
1.4.3.
Awareness raising through contests, seminars, and other activities
Along with various competitions and prizes related to e-commerce that originated from 2005, in 2006
several new e-commerce prizes and awards have been introduced. Beside the E-commerce Gold Cup
presented by the Informatics Association, the Sao Khue Award by Vietnam Software Association for the
first time announced prizes for best e-commerce solutions. Knowledge contests of e-commerce were
frequently organized in universities and on television channels, inducing participation of many students
and TV viewers. Other contests hosted by mass media agencies or enterprises, such as BIT Cup that was
organized for the first time in 2006, also had exclusive awards for e-commerce solutions.
The Trust Mark program for e-commerce websites carried out by the Ministry of Trade in cooperation
with Vietnam Informatics Association has gained increasingly high reputation and popularity, assisting
enterprises and consumers in identifying reliable e-marketplaces to conduct e-commerce transactions.
8
Box 1.5 Sao Khue 2006 award for e-commerce solutions
In 27 May 2006, at Hanoi Opera House, VINASA announced and awarded Sao Khuê 2006 prize.
Mr. Le Danh Vinh, Deputy Minister of Trade came and awarded the prize to 21 typical software
providers, of which there were 2 prizes for e-commerce: Chodientu.com of Peacesoft and electronic
air ticket selling software of VDC. Particularly, Chodientu.com of Peacesoft was one of three 5 star
software according to international standards.
In 2006, conferences and seminars on various topics of e-commerce were organized in many provinces
and cities, particularly Hanoi and Hochiminh City. These conferences and seminars have effectively
enhanced social awareness of e-commerce, especially among particular interest groups and on particular
subjects. Most conferences attracted the attention of mass media and the content of such events were
widely disseminated in Vietnam.
2.
Training and developing human resources for e-commerce
2.1.
Demand
The blooming of information technology and mass media left strong impacts on business activities of
organizations and individual as well as socioeconomic development of Vietnam. E-commerce is an effective
tool helping enterprises to increase competitive capacity on their way of international integration. For
this reason, training to have high quality human resources with comprehensive capacity to manage ecommerce activities is an urgent demand.
Box 1.6 Human resource requirement for e-commerce
Doing business in international economic environment require involving parties not only to be
well–aware of international business operations and international trade law but also to take full
advantage of information technology achievements to increase business effectiveness, reduce cost
and enhance competitiveness of enterprises.
Responding to the specific requirements of e-commerce, training human resource with full knowledge
of international trade law, frequent skills of information technology will help to meet the urgent
demand of enterprises and international trade organizations.
Nguyen Van Thoan, MA, lecturer of Foreign Trade University, speech at Conference on E-commerce
Training, Hanoi, August 2006
Recognizing the advantages and effectiveness of e-commerce, many enterprises were taking initiatives in
training e-commerce skills for employees. As a result, there was remarkable improvement in the quality of
man power for e-commerce; which to a certain extent satisfied demand of enterprises in doing business
via the Internet. In most large-size enterprises of Vietnam, the informatics and technology department
has enough capacity for e-commerce applications at the medium level.
9
Box 1.7 Investment in human resource development for e-commerce
“For their small scale, SMEs can run business simply, with human centralization. Informatics
investment may not necessary because the effectiveness is not too much. However, when the work
volume and the number of employees increase with the development of business, enterprises will
face loss after a long running time unless they are well – aware about the importance of investment
in information technology. Typical troubles are known as changes and crises in human resources,
stagnancy in business activities resulting in claims from customers, loss in finance due to loose
supervision, etc”
Ms. Le Thanh Canh, Deputy Director of Weixin Company, www.vietnamnet.vn
Unlike big enterprises, many small enterprises, due to lack of skills and resources, are yet to take full
advantage of the benefits brought by e-commerce when building websites or joining e-marketplaces. A
lot of free training courses have been organized to help enterprises quickly command this new business
method. However, not all enterprises gained full benefits from these courses, some remained aloof and
some joined the courses just for fad.
2.2.
Forms of training
Year 2006 has witnessed a variety of e-commerce training forms. According to a recent survey conducted
among regular training institutions in the North, 75% of universities and junior colleges have e-commerce
in the curriculum with at least 3 credits.
Table 1.3 Training programs on e-commerce at universities
Colleges/Universities
Subjects
Credit
University of Commerce
- E-commerce Basics
- E-marketing
- B2B and B2C e-commerce
management
- Information Security
- Web design
Foreign Trade University
E-commerce
60 credit hours
National Economics University
E-commerce
45 credit hours
Economics College, National University
E-commerce
45 credit hours
Hanoi University of Trade and Technology
E-commerce
45 credit hours
Hanoi University of Business and Management
E-commerce
45 credit hours
Phuong Dong Private University
E-commerce
45 credit hours
Hung Yen Technical Teaching College
E-commerce
45 credit hours
10
Colleges/Universities
Subjects
Credit
Institute of Banking
- Inter-bank electronic payment
- Stock market
- Stock exchange
College of Economics, Technique and Industry
No.1
- E-commerce Programming
- Web design
90 credit hours
University of Trade and Technology
E - commerce
45 credit hours
Economic Management Department – Hanoi
University of Technology
E - commerce
45 credit hours
Central College of Trade Officials
E-commerce will be trained in 2007
- 2008
For short term training, universities and organizations were quite active in providing one-week courses on
e-commerce. Two agencies of the Ministry of Trade – the E-commerce Department and Trade Information
Center – took lead in organizing e-commerce training courses for commerce managerial officers and
enterprises. VCCI Informatics Institute, Foreign Trade University and Vietnam E-commerce Portal also held
numbers of short-time training courses for enterprises all over the country. Companies in e-commerce
sector were also actively involved in e-commerce training.
Box 1.8 Enterprises to provide e-commerce training services
GOL Co.Ltd., in cooperation with universities and centers all over the country, is offering various ecommerce training programs. According to the demand and IT capacity level of trainees, GOL has 3
training programs (1) advanced e-commerce, (2) e-commerce practicing, and (3) implementing ecommerce project. Program (1) and (2) are short term courses while (3) is in long term of 6 months.
Each program combined theory and practice. Particularly, Textbook on e-commerce practice won
copyright certification in September 2005.
“E-commerce training”. PC world Series B, October 2006
Beside traditional training forms, some organizations started to provide one-day online training courses.
Documents are sent to trainees before the courses. This kind of training has won support of many
enterprises. However, the number of courses organized was not enough to meet the high demand of the
public.
2.3.
Lecturers
Although e-commerce training has been put into many universities’ teaching curricula and some
universities even have e-commerce departments, but in general, e-commerce lecturers are yet to meet
training requirements. According to a quick survey held recently, e-commerce lecturers come from
various backgrounds. The majority of lecturers graduated with trade or business administration major
and equipped with e-commerce knowledge on a self-study basis. Some lecturers teach e-commerce
using IT approach and lack fundamental knowledge on trade or business. Very few lecturers have official
background in e-commerce.
11
Table 1.4 Survey findings on e-commerce lecturers
Colleges/Universities
E-commerce training levels
Lecturers
University of Commerce
E-commerce Department
E-commerce major
Primarily from economic and business management departments
Trained by the University and others
Foreign Trade University
(FTU)
E-commerce Division
E-commerce major
Self-study, trained by FTU and others
National Economics
University (NEU)
E-commerce major not available
Trained by the University or abroad
Hue University of
Economics
E-commerce courses not yet
available
Qui Nhon University
E-commerce courses not yet
available
National University
E-commerce courses not yet available,
but already in the curricula
Source: Speech at Conference on E-commerce Training organized by E-commerce Department, Ministry of Trade, Hanoi, August 2006
According to specialists, this situation can be explained by the following reasons:
-
-
2.4.
E-commerce subjects require both business and IT background.
Awareness about the necessity of regular e-commerce training in Vietnam was inadequate, which
resulted in the shortage of e-commerce lecturers
Required qualifications of e-commerce lecturers were perceived differently among different lecturers. Many lecturers supposed that for e-commerce training, it is only necessary to have informatics
background. Whereas others thought that knowledge on business management is essential for
e-commerce training.
There was not enough support from education authorities in constructing e-commerce training
programs and training e-commerce lecturers.
Technology infrastructure and support system for e-commerce training were inadequate. Because
of this limitation, lecturers tended to apply traditional book-based training methods. Software and
devices to support e-commerce training were seriously lacking.
Textbooks
At present, each e-commerce training organization constructed its own curriculums and textbooks on
e-commerce. Information for designing textbooks came from various sources. According to a report at
Conference on E-commerce training at universities and colleges, most textbook for e-commerce training
in Vietnam originated from foreign materials and the Internet, including:
•
12
E-commerce textbooks in foreign universities or postgraduate programs (whether specialized
e-commerce materials or general materials containing several subjects on e-commerce) that
Vietnamese lecturers brought back after their graduation overseas.
•
•
•
E-commerce training materials of foreign universities publicized on the Internet.
Foreign materials or books on e-commerce imported to Vietnam through various channels
E-commerce researches and books by Vietnamese authors
As far as the content was concerned, most curricula provided basic knowledge on e-commerce. There
were few specialized curricula majoring in e-commerce application skills, network security, electronic
payment or e-commerce strategy.
Box 1.9 Stands on e-commerce training
In the world, there exist different opinions on e-commerce training. Three remarkable points of views
are: Information Technology training to support e-commerce development, e-business management
training and inter-sector training on e-commerce. In Vietnam, first two methods are synchronously
implemented at all training forms and training level. Basing on motivating start in 2005, in 2006
e-commerce training developed in both quantity (quantity of trainees and training agencies) and
quality (of training programs). Main content of training course were e-business administration and
IT and e-commerce applications.
The effectiveness of e-commerce application in business and e-commerce development in Vietnam in
2006 – 2010 periods strongly depend on quality of e-commerce training and propaganda (including
method and level of training, programs and curriculums, teacher, technical support for training etc)
Associate Prof. Nguyen Hoang Long, University of Commerce, Speech at Conference on e-commerce
training hold by Ministry of Trade, Hanoi 8/2006
II.
POLICIES AND LAW FOR E-COMMERCE DEVELOPMENT
1.
Policies
1.1.
Implementation of the Master Plan for E-commerce Development in the 2006-2010 period
Year 2006 was the first year to implement the Master Plan for E-commerce Development in the 20062010 period speculated in Prime Minister’s Decision No. 222/2005/QD-TTg dated 9/15/2005 (hereafter
referred to as Decision No.222). Ministries, industries and localities have actively carried out the six
policies and solutions proposed in the Plan known as: 1) Training and awareness raising on e-commerce;
2) Improving the legal system for e-commerce; 3) Providing online public services and applying ecommerce in government’s procurement; 4) Developing e-commerce support technologies; 5) Enforcing
legal regulations relating to e-commerce; 6) International cooperation on e- commerce.
To fulfill the tasks assigned by the Prime Minister according to the Master Plan, on 12/6/2006 Minister of
Trade issued Directive No. 14/2006/CT-BTM allocating tasks and duties among units within the ministry
and local trade departments throughout the nation. The Directive emphasized the task of formulating
legal texts to guide the implementation of the E-commerce Decree and required all units and departments
promptly provide public services on the Internet.
To support localities’ implementation of state management on e-commerce, the Ministry of Finance on
11/20/2006 issued Circular No.107/2006/TT-BTC guiding the disbursement of the State Budget in fiscal
year 2007. The text strongly suggested that ministries, central government agencies and localities “allocate
budget for implementing the Master Plan for E-commerce Development in the 2006-2010 period approved
by the Prime Minister under Decision No. 222/2005/QD-TTg and instructed by the Ministry of Trade”.
13
During 2006, local implementation plans for Decision No. 222 was also constructed in many provinces
across the country. A number of projects were approved and will be implemented starting from 2007.
Table 1.5 List of localities and their projects on e-commerce deployment
Localities
Legal Text
Ho Chi Minh City
3942/STM-XTTM
07/9/2006
2
Bac Kan
234/KH-TMDL
07/9/2006
3
Binh Phuoc
465/KH-TMDL
11/9/2006
4.
Ha Tinh
1802/UBND-TM1
23/8/2006
5.
Hai Phong
1010/TM-QLKD
10/10/2006
6
Hoa Binh
1375/UBND-TCTN
16/8/2006
7.
Khanh Hoa
739/STMDL-XT
16/10/2006
8.
Lang Son
258/KH-TMDL
11/8/2006
9.
Nghe An
490/TM-KHTH
27/9/2006
10.
Phu Tho
358/TMDL-KH
08/8/2006
11.
Quang Ninh
2545/UBND-MT
24/7/2006
12.
Tay Ninh
543/TMDL-XT
01/8/2006
13.
Thanh Hoa
267/TM-KHTH
14/8/2006
3023/UBND-KTTC
20/7/2006
14.
Thua Thien Hue
355/STM-QLTM
02/8/2006
15.
Yen Bai
377/CV-TMDL
21/8/2006
1
14
Main Content
Training, propagandizing and popularizing electronic
commerce
1. Organize conferences and training courses on e-commerce for civil servants and business people
2. Co-ordinate with communication agencies to set up ecommerce popularization programs for enterprises and
the masses
3. Organize training courses on particular e-commerce skills
for enterprises
4. Organize training courses for law-executives on
e-commerce
5. Establish systems of prizes, trade fairs and exhibitions on
e-commerce applications.
Supporting e-commerce applications at enterprises
1. Support enterprises to join Vietnam e-commerce portal
and other domestic and international e-marketplaces
2. Consult and support enterprises to choose the most suitable model to apply e-commerce.
3. Establish e-businesses in key export industries.
4. Support typical enterprises to develop e-commerce applications and reproduce and expand the models
Implementing legal regulations on e-commerce
1. Keep track on violations against consumers’ benefits
2. Arrange the implementation of legal regulations on ecommerce; carry out verifications and inspections on ecommerce within the region
Establish environment for e-commerce applications
1. Do yearly surveys on the actual state of e-commerce applications among enterprises within the region
2. Establish regional trade and economic databases
3. Review infrastructure for e-commerce applications and set
up corresponding investment plans
4. Apply e-transaction in public procurement and public services provision
5. International co-operate in e-commerce
1.2.
Polices related to e-commerce
Along with the implementation of the Master Plan for E-commerce Development in the 2006-2010 period,
the government has issued a number of polices and strategic plans during 2006 which were contributive
to the establishment of a comprehensive legal environment for e-commerce development in Vietnam
Table 1.6 List of policies related to e-commerce
Date
Legal Text
2/7/2006
Prime Minister’s Decision No. 32/2006/QD-TTg approving the Scheme for Internet and
Telecommunication Development towards 2010
4/7/2006
Prime Minister’s Decision No. 74/2006/QÐ-TTg approving the Program for Public welfare
Telecom services provision towards 2010
5/24/2006
Prime Minister’s Decision No. 112/2006/QÐ-TTg approving the Development Project for the
Banking sector towards 2010 and Vision for 2020
On drafting
Software Industry Development Plan for the 2006-2010 period
On drafting
Plan for E-government Development
The Development Project for the Banking sector towards 2010 and Vision for 2020, approved by the
Prime Minister in Decision No. 112/2006/QD-TTg, consisted of 14 sub-projects, including 3 related to
e-commerce:
-
Non-cash Payment Development Project for the 2006-2010 period and Vision towards 2020
Phase 2 of the Banking and Payment System Modernization Project sponsored by the World Bank
Management Information System Development and Banking Modernization Project sponsored by
the World Bank
Following the Banking and Payment system Modernization Project phase 1 sponsored by the World
Bank, the 3 above-mentioned projects will contribute to establishing a highly interoperable payment
environment, setting the foundation for a modern electronic payment system to meet the demands of
e-commerce development in Vietnam.
2.
Law
The Electronic Transaction Law came into effect one 1 March 2006, opening a new era in which electronic
transactions are officially recognized and protected by law. Also, in June 2006 the National Assembly
adopted the ICT Law, which will come into effect in January 2007. However, to enforce the laws and make
them rules for social behaviors, guiding legal texts are very much needed to regulate specific aspects of
e-commerce in various social areas.
The Electronic Transaction Law and ICT Law were formulated and issued promptly in comparison with
other laws. But by contrast, the drafting of their guiding texts has been significantly lagging behind. Until
the end of 2006, only 1 out of 5 guiding decrees for the Electronic Transaction Law had been issued,
namely the E-Commerce Decree No. 57/2006ND-CP.
15
Table 1.7 Legal texts on e-commerce promulgated in 2006
Law
6/29/2006
ICT Law (No. 67/2006/QH11)
Decree
6/9/2006
Decree on E-commerce
Decree on electronic transactions in finance activities
Decree on electronic transactions in banking operation
Decree on electronic signature and C/A services
On drafting
Decree on IT applications in government agencies’ operation
Decree guiding the ICT Law on the development of IT industry
Decree on administrative sanctions for IT-related violations and breaches
Other legal texts
1/18/2006
Decision No. 04/2006/QÐ-NHNN of the State Bank to stipulate rules of information system security in Banking
3/23/2006
Directive No. 10/2006/CT-TTg on the reduction of administration papers in State administrative
agencies’ operation.
4/28/2006
Decision No. 13/2006/QD-BBCVT of the Ministry of Post and Telecommunication on rights, tasks,
functions and organizational structure of Vietnam Computer Emergency Rescue Team
5/5/2006
Decision No. 28/2006/QÐ-BTC of the Ministry of Finance stipulating fee rates and charges of
domain and Internet IP registration and management
5/8/2006
Decision No. 14/2006/QÐ-BBCVT of the Ministry of Post and Telecommunication on adjustments
in Internet tariff via public telephone network of VNPT (Vietnam Post and Telecom Group)
6/1/2006
Joint Circular No. 60/2006/TTLT-BVHTT-BBCVT-BCA on online games management
6/29/2006
Circular No. 03/2006/TT-BBCVT on handling breaches involving online games and Internet
services
7/31/2006
Decision No. 35/2006/QÐ-NHNN of the State Bank on principles and regulations of risk management in e-banking operation
8/1/2006
Correspondence No. 1515/BBCVT-VT of the Ministry of Post and Telecommunication constructing Joint Circular No. 60/2006/TTLT-BVHTT-BBCVT-BCA on online games management
Directive of the Prime Minister on enhancing the protection of Computer Programs
On drafting
Joint Circular of the Ministry of Trade and the Ministry of Health on pharmaceutical trading via
electronic means
Decision of Minister of the Ministry of Trade on consumers protection in emails services
16
2.1.
E-commerce Decree guiding the Electronic Transaction Law and the Commercial Law
On 6/9/2006, Decision No. 57/2006/NĐ-CP on e-commerce was promulgated by the Government. This is
the first of 5 guiding decrees for the Electronic Transaction Law and the sixth of 12 guiding decrees for
the revised Commercial Law.
Table 1.8 List of guiding decrees for the Commercial Law
Decree
Date of Issue
1
Decree regulating international goods trading, buying and selling agents, outsourcing/
processing activities and in-transit goods trading
01/23/2006
2
Decree on goods origin
02/20/2006
3
Decree on trade inspection services
02/20/2006
4
Decree on franchising activities
03/31/2006
5
Decree on commercial promotion activities
04/04/2006
6
Decree on e-commerce
06/09/2006
7
Decree on the trading of goods and services listed as prohibited, restricted or provisional
goods and services
06/12/2006
8
Decree on foreign representative offices and branches in Vietnam
07/25/2006
9
Decree on goods trading via commodity exchanges
12/28/2006
10
Decree on foreign-invested enterprises and their trading operations in Vietnam
Submitted to
Government
11
Decree on administrative sanctions for breaches in commercial activities
On drafting
12
Decree on logistics services
On drafting
The major point of the Decree on E-commerce is to assert that electronic communications have legal
effects equivalent to paper documents in all commercial transactions, from inquiries, offers and acceptance
of offers, to the formation and performance of contracts. The E-commerce Decree marked a milestone
in completing the legal framework for e-commerce development, encouraging enterprises to conduct
more e-commerce transactions, protecting rights and interests of involving parties and serving as the
legal basis for e-commerce related dispute settlement.
The Decree was based on principal objectives and stances such as: being consistent with regulations
stipulated in the Civil Code, Commercial Law, and Electronic Transaction Law; rendering maximum support
for business activities of individuals and enterprises; covering all e-commerce activities in practice; and
being flexible enough to embrace fast changes in the e-commerce area. The Decree was also compatible
with international law and adaptive to Vietnam’s specific circumstances.
The Decree consists of 5 chapters with 19 articles, the main content of which is as follow:
-
Chapter 1: General Provisions (Article 1 to Article 6) – stipulates the governing scope, objects of
application, definitions, extent of state management on e-commerce and the agency mandated
with this authority.
17
-
-
Chapter 2: Legal effects of electronic communications (Article 7 to Article 10) – asserts basic principles of recognizing legal effects of electronic communications in commercial activities.
Chapter 3 : Electronic communications in commercial activities (Article 11 to Article 15) – regulates
provisions for the use of electronic communications such as time and place of electronic communication dispatch and receipt, invitations to make offer, use of automated message systems for
contract formation, and input errors in electronic communications.
Chapter 4: Sanctions (Article 16, 17) and Chapter 5: Enforcement (Article 18, 19) – stipulate behaviors that are regarded as e-commerce violations, types of sanction, time the Decree comes into
effects, and enforcement agencies.
To make the Decree commensurate with e-commerce practice and to further complete the legal
framework for e-commerce in Vietnam, relevant authorities need to formulate more detailed guiding
texts on particular issues of e-commerce application such as electronic trading of restricted goods and
services, commercial advertisement using electronics means, use of electronic communications in online
business transactions, consumers protection in e-commerce and other related issues.
2.2.
Specialized law
Financial transactions are of special nature since they involve every aspect of socio-economic activities.
Regulations in taxation, accounting and auditing not only govern transactions between tax collectors and
tax subjects but also affect all commercial transactions among individuals and organizations. Therefore,
to enable electronic payment and facilitate a complete e-commerce transaction cycle, it is required that
the financial law system incorporates specific regulations recognizing the legal effects of electronic
communications.
The Electronic Transaction Law, the Decree on E-commerce and the draft Decree on Electronic Transactions
in Finance Activities have provided sufficient legal basis for recognizing legal effects of electronic
communications used in general businesses transactions. However, specific conditions that constitute
the legal effects of electronic communications in particular areas such as corporate taxation, accounting
or auditing must be stipulated by corresponding authority. At present, such stipulations have just
been documented in a few Official Letters addressing some particular cases. The lack of an overall legal
framework for the use of electronic communications in finance activities has produced confusion among
enterprises and even state agencies when facing with new issues arisen from e-commerce practice in
Vietnam.
Box 1.10 State agencies with the implementation of Electronic Transaction Law
According to Article 40 of the Electronic Transaction Law:
Clause 3: State agencies take initiative to conduct in part or in whole their internal or external
transactions by electronic means.
Clause 4: Basing on socio-economic development conditions and their specific situations, State
agencies determine proper roadmap for applying electronic means in their internal operation or
transactions with other agencies, organizations and individuals
Thus, so far there is still lack of specific regulations on states agencies’ obligations and roadmap for
the acceptance of electronic communications in areas under their state management authority.
18
2006 was the first year of Vietnam full integration into the global economy, which created strong drive
for more rapid and substantial e-commerce adoption among enterprises. On the way of its development,
e-commerce application in various areas has been presented with several obstacles including:
-
-
Taxation and customs procedure for digital product import and export via the Internet
Validity of electronic invoice in some traditional payment method, e.g. when customers make payment with credit cards at points of sale’s counters, whether the card’s tally-sheets and the printed
bills (without legal stamp) are considered valid invoice still remains in question .
Validity of payment receipt in on-line business transactions while all communications are created
and transfer via the Internet
2.2.1. Taxation and customs procedure for digital products import and export via the Internet
Digital products, including software, information, data, digital music or e-books, accounted for an
increasing proportion of commercial turnover in the information economy. Those digital products,
software for example, played an important role in companies’ property and become one of key products
for export. Digital products trading can be conducted via the Internet, exceeding the the current capacity
of tax and customs agencies to control, and thus causing confusion to enterprises as well as tax and
customs agencies.
Box 1.12 Several documents guiding tax and customs procedures for export and import of software
via the Internet
Customs procedure is not required for software import and export via the Internet
In response to the question by Nhan An trading and technology Co., Ltd about customs procedure
for digital products exported via the Internet, in Correspondence No. 2508/TCHQ-GSQL dated
6/9/2006 the General Department of Customs instructed that:
“According to Article 4 of the Customs Law, import and export goods are movable property, coded
and permitted within customs territories. Thus, software imported and exported via the Internet is
not regarded as import / export goods and therefor not subject to customs procedures
0% Value added Tax for software exported via the Internet
In Correspondence No. 976/TCT-TCCS dated 3/7/2006 sent to local taxation departments instructing
about tax rate applied for software exported via the Internet, the General Department of Taxation
stipulated:
“Pursuant to item 1 of the 1st section, part B of Circular No. 120/2003/TT-BTC dated 12/12/2003
and item 3 of Circular No. 84/2004/TT-BTC issued by Ministry of Finance, value added tax levied on
software exported via the Internet is 0%”
“Value added tax on software exported via the Internet will be deducted upon full submission of
contracts with oversea partners, value added invoices and banking documents as required by Law.
No customs declaration for exported goods is required”
2.2.2. Validity of electronic payment communications (applied in taxation, accounting and auditing
agencies)
To perform a complete e-commerce transaction till the payment stage would require significant changes
in the current financial management system, as well as form requirement for financial invoices. Pre-printed
bills and invoices must be replaced by electronic bills printed from enterprises’ information systems or
electronic invoices sent, received and stored in information systems of the involved parties. However,
19
for these electronic invoices to be accepted and used in corporate finance, beside the law’s recognition
of legal effects of electronic communications, there must also be corresponding changes in regulations
about financial invoices stipulated by tax authorities.
Box 1.12 Validity of electronic communications in finance activities
Accounting Law No. 03/2003/QH11 :
Article 18: An electronic communication can be recognized as payment invoice if it contained
information as stipulated in Article 17 of this Law and presented in form of data message.
Decree on E-commerce dated 6/9/2006
Article 8: Where the law requires that a communication should be in writing, that requirement is
met by an electronic communication if the information contained therein is accessible so as to be
usable for subsequent reference
Article 9: Where the law requires that a communication should be made available or retained in its
original form, that requirement is met in relation to an electronic communication if:
(a) There exists a reliable assurance as to the integrity of the information it contains from the time
when it was first generated in its final form, as an electronic communication or otherwise; and
(b) The information it contains is capable of being displayed when needed.
Draft Decree on Electronic Transactions in Finance Activities
Article 8: An electronic communication can be converted to paper form and in that case must have
obvious marks authorizing the converting process. Paper document converted from an electronic
communication has full legal effects if it presents:
-
Integrity of the information as compared to the original electronic form
-
Obvious marks authorizing the converting process from electronic into paper form
-
The name and signature of the person who converted the electronic communication into paper
-
The name and signature of the chief officer or mandated person and the organization’s authentic
mark as required by law
Invoices have long been considered the original and most lawful documents that determine enterprises’
tax rights and responsibilities. An invoice is a dual purpose instrument, serving as the basis for businesses
to do their cost - turnover accounting and also as the certification of consumer’ title to the purchased
product. It is thus required that all invoices circulated in the market strictly observe regulations set by
the Ministry of Finance, including but not limited to requirements about form, content, printing, and
authentic marks (know as the lawful stamps). Electronic communications, which fail to meet those
requirements, would not be accepted as “valid invoice” in transactions with taxation agencies despite the
fact that their legal effect is recognized by Law as equivalent to “original” and “written” documents. This is
a major obstacle that hinders enterprises to develop e-commerce application on a large scale. Following
is a striking case:
20
Box 1.13 Difficulties in implementing electronic air tickets at Vietnam Airline
Under increasing competitive pressure in air transportation business, in 2004 the International Air
Transport Association (IATA) issued a decree on mass implementation of electronic air tickets since
1/1/2008. Being a member of IATA, Vietnam Airlines started its e-ticket project in 2005 and began
to pilot test electronic air tickets for the Hanoi-Hochiminh City route on 1/1/2006. During the first
phase of the project, passengers still have to come to ticket-agents of Vietnam Airlines to pick up
tickets and make payment (e-tickets herein refer to data about passengers and the flight printed
directly from Vietnam Airlines’ information system). After the pilot phase, e-tickets will be sent to
passengers via the Internet or through Vietnam Airlines’ ticket agents.
During the first phase of e-tickets implementing, when making payment for tickets at Vietnam
Airlines’ offices and agents, passengers will be given receipts of airfreight. Only the receipts issued
by authorized taxation’s agencies upon request of Vietnam Airlines’ offices and agents are deemed
valid invoices.
At the second phase, e-tickets are transmitted via the Internet and passengers can make payment
with credit cards. After making payment online, passengers will be given flight’s details and a
secret code. When checking-in at airports, passengers just have to submit the code along with their
personal identification. Vietnam Airlines is still working with relevant agencies to obtain plausible
and lawful solutions for payment invoices in such cases.
Vietnam Airline Corporation, 10/2006
Unlike traditional tickets whose counterfoils are widely accepted by most law because they meet
rigid form requirements on paper material, graphic designing and printing, e-tickets do not bear such
vivid assurance. As for now, e-tickets are required by tax authorities to be issued together with paper
receipts. Receipts issued by Vietnam Airlines are legal basis for tax declaration and deduction. However,
this requirement has derogated the advantage of e-tickets, which is expected to help reducing cost on
handling papers, and will pose a significant obstacle to the implementation of the project’s second phase
when e-tickets are transmitted via the Internet and payment made completely electronically.
The above example is not the case with Vietnam Airlines alone, but also presents a common obstacle for
enterprises in general, as they set out to establish a complete e-commerce model for doing business. To
get over such obstacles and to meet new requirements of economic integration, the General Department
of Taxation has been working on a project to reform its invoice handling and management system for the
2007-2012 period. Such a long-term project will need the collaboration of many ministries, industries and
civil organization before it can be rolled out for actual implementation.
2.3.
Other legal issues
2.3.1.
Intellectual property rights
Being high-level components of the knowledge-based economy and information society, the development
of e-commerce in each country depends a great deal on the enforceability of intellectual property law in
that country. Intellectual property rights in software (the building blocks of e-commerce systems among
businesses), brand names, trademarks, products designs, and business ideas in e-commerce must be
recognized and protected should a sound competitive environment for e-commerce be established.
According to a recent report of the International Data Group (IDG) and Business Software Alliance (BSA)
announced in 5/2006, Vietnam is still one of the countries with highest rate of software infringement in
21
business activities. However, as compared with figures of year 2005, the level of software infringement
has shown remarkable decrease, both in absolute and relative terms.
The year 2006 marked a significant progress as Vietnam heightened its commitment to the protection
of intellectual property rights, both from administrative and business sides. This is an issue of great
concern to Vietnam’s trade partners, and Vietnam has no choice but to observe common rules of the
international market.
Box 1.14 The government to handle software infringement
On 10/5/2006, for the first time unauthorized software stored in an enterprise’s systems are subject
to penalties when a delegation of inspectors from several state authorities paid an unscheduled
inspection visit at Daewoo-Hanel Company, located in Sai Dong B industrial zone-Gia Lam DistrictHanoi. This incident was handled with the cooperation of inspectors from the Ministry of Culture and
High-Tech Crime Prevention Team, Ministry of Public Security. The total value of the unauthorized
software was nearly 1 billion VND.
Minutes of the breach was set and the Chief Inspector from the Ministry of Culture issued a Decision
proposing penalties for Deawoo-Hanel Company according to intellectual property law and Decree
No. 56/2006/NĐ-CP dated 6/6/2006 approved by the Government on administrative cultural breach
handling.
“This event is the beginning of a large and long-term campaign to enhance copyright protection
and remove unauthorized software from business activities. This contributes to the development
of domestic software industry and is consent to Vietnam’s commitments on intellectual property
rights in economic integration process” – say Mr. Vu Xuan Thanh, chief inspector from the Ministry
of Culture
VnExpress http://www.vnexpress.net/Vietnam/Vi-tinh/2006/10/3B9EF187/
Along with deterrent inspections and penalties, authorized agencies are strengthening legal framework
and regulations on intellectual property. I early 2007, the Government is slated to issue a Directive for
enhancing the protection of computer programs according to the Civil Code, Intellectual Property Law
and international commitments on copyright and related issues. The Directive requires that state agencies
earmark portions of their budget for buying copyrighted software and IT products used in agencies’
operation.
Domain names and intellectual property
The process of issuing domain names, especially the secondary domains with “.vn” shows that intellectual
property issues are concerned by Internet-resources management agencies to assure the equality in
approving the domain names related to established and protected brand names and trademarks. VNNIC
issued the secondary domain names with “.vn” since 6/2006 following a 3-stage plan:
-
-
-
22
Phase 1 (from 6/1 to 6/12/2006): priority is given to domain names related to established brand
names of products, art works and domains for state agencies, and socio-political organizations at
home and abroad.
Phase 2 (from 6/13 to 7/13): preferential treatment for those who own third-level “.vn” domains in
registering corresponding secondary domains “.vn”. For example: the owner of www.organization.
com.vn will be granted www.organization.vn upon registration
Phase 3 (since 8/14/2006): registration of secondary domains “.vn” according the principle of “first
come, first serve”.
In case there are domain names, full or parts of which are duplicated or similar to established brand
names in Vietnam and abroad, VNNIC will have concrete solutions for specific cases upon the brand name
owners’ claim.
According VNNIC’s statistics to the end of phase 1 (6/12/2006), 40% of over 1,300 applied domains
belonged to foreign organizations, most of which were large-scale and famous multinational corporations
with recognized trade name in Vietnam. 79%of the approved domains contain full or parts of protected
intellectual property such as company names and product/service brand names. Many companies use the
all-rounded approach in registering domain names like the case of Johnson & Johnson Co., who registered
for www.johnsonandjohnson.vn, www.johnson-johnson.vn, and www.johnsons.vn; or CitiBank with www.
citi.vn, www.citicorp.vn, www.citibank.vn, etc. Some international groups (War Mart for instance) applied
for secondary domain “.vn” even when they were yet to established commercial presence in Vietnam.
Meanwhile, among the rest 60% of Vietnamese applicants, only 15.63% have certification of intellectual
property right for the trademark contained in the applied domains.
Box 1.15 Many big banks lost their “.vn” domain names due to negligence in domain registration
Since the beginning of the 3rd phase for “.vn” domains registration (16.30-8/14/2006), domain
names are approved on the principal of “first come, first served”. Domains containing trade names
of many banks have been registered by other organizations. This fact attracts heated public
attention because the law does not yet permit domain transferring. Decision No. 92/2003/QDBBCVT stipulated that Internet resources transferring in any way is prohibited by the law. Those
banks can only submit a claim in cases the registered domains are not used for rational purposes or
the corresponding websites are not launched within 60 days of registration.
Source: VnExpress http://www.vnexpress.net/Vietnam/Vi-tinh/2006/08/3B9ED37F/
2.3.2.
Personal information and data privacy
In electronic environment, information is quick to proliferate and easy to access, which pose great
challenges to the management and protection of personal information. Consumers’ personal information
was collected and used for commercial purposes with increasing frequency, and in many cases,
against consumers’ will and counter to consumers’ interest. In many developed countries, information
privacy presented a big concern to policy makers and quite comprehensive legal frameworks have
been established to govern the matter. This issue also appears in the e-commerce agendas of various
international cooperation mechanisms such as APEC, AFACT, UNCITRAL, UNCTAD, etc.
So far, Vietnam is yet to have any law on personal information protection. Considering business practices
and consumer habits in the traditional commercial environment, the whole privacy concept is still new
to many Vietnamese enterprises. However, under the pressure of international economic integration, the
importance of personal information rights has won increasing awareness of the business community
as well as state agencies. General principles of protecting personal information are stipulated in the
Electronic Transaction Law dated 11/29/ 2005 and the ICT law dated 6/29/2006.
According to Article 46 of the electronic transaction law:
“Agencies, organizations, individuals are not allowed to use, provide or disclose part or all of information related to private and personal affairs or information of other agencies, organizations, individuals
which is accessible by or under the control [of the first-mentioned agencies, organizations and individuals] in e-transactions without prior agreement [of the other agencies, organizations and individuals]
unless the law provides otherwise.
23
According to Article 21 of the ICT transaction law:
1. Agencies, organizations, individuals can only collect, process and take use of others’ information upon
their agreement unless the law provides otherwise.
2. Agencies, organizations, individuals collecting, processing and taking use of others’ information have
the responsibilities as follows:
a) Notify the relevant agencies, organizations, individuals how, where, why and how much their
information is collected, processed and taken use of.
b) Take use of the information for the right purpose and archive it within a specific time allowed
by the law or upon the agreement of the relevant parties
c) Take necessary technical and managerial actions to assure that the information of the
relevant parties is not lost, stolen, disclosed or destroyed.”
According to Article 21 of the ICT transaction law:
1. Individuals have the right to request the agencies, organizations, individuals archiving his/her personal
information to check, correct or repeal such information.
2. Agencies, organizations, individuals are not allowed provide personal information of others to a third
party unless there is agreement of the relevant parties or the law provides otherwise.
3. Individuals have the right to be compensated in case their personal information is provided to third parties for unauthorized purposes.
A decree to guide the ICT law on penalties for administrative violations in ICT field was on drafting and
expected to gain Government’s approval by the end of 2006. The decree consists of regulations on punitive
measures for violations involving personal information collecting, processing, and using. This was the
starting steps of legislative and executive agencies to establish a mechanism for personal information
protection in Vietnam in conformity with international rules and regulations.
2.3.3.
Consumer protection in electronic commercial advertising
Along with the increase of Internet and mobile phone users in Vietnam, advertising through electronic
means (email, SMS or e-news etc.) was increasingly developed. Advertising on electronic newspapers
and magazines somehow have common characteristics with traditional means of advertising like public
advertising or advertising through mass media. Meanwhile, email advertising has developed as a new
application that increasingly involved in consumers’ rights on personal information.
The biggest advantage of email advertising is its high speed, convenience and wide spreading. The cost
for email advertising is relatively lower to other means of advertising. However, using email to make
advertisement had its black side of disturbing receivers when advertising emails were overused, being
out of receiver’s expectation and seriously damaged information systems. Advertising email contributed
to large volume of the spam email pervading global Internet line.
At present, the problem of advertising and spam email was dealt with using two approaches: protecting
consumer’s rights in email service and data privacy in electronic environment.
24
Box 1.16 Mechanisms to handle spam emails
Internationally, spam emails are regulated by two main mechanisms: opt-in and opt-out. With optin method, the senders can only send spam emails upon recipients’ consent. For example, when
visitors register to receive newsletters from a website, the newsletters will be sent to them only
when they have ticked the box showing that they agreed with the registration. Whereas, opt-out
approach, emails can be sent without any permission of recipients in advance, but must be ceased
in case recipients refused further communication. Which approach will Vietnam opt for?
Advertising on websites and via electronic means was accepted by the Ordinance on Advertisement
approved by the government and its guiding decree No. 24/2003/NĐ-CP. However, rigid and infeasible
requirements contained therein have eroded the effectiveness of these legal texts. In a more general
context, advertising activities are regulated by the Commercial Law and its guiding decree No.
37/2006/NĐ-CP.
In such context, Ministry of Trade have been drafting a Ministerial Decision on Consumer Protection in
Email Advertising. The decision aimed to assist enterprises in taking full advantages of email advertising
and at the same time minimize its negative impacts on email users.
Ministry of Culture was also constructing a Rule on ICT’s information management. Until the time the rule
is issued and implemented, Ministry of Culture suggested that Ministry of Post and Telecommunication
require ICT service providers to apply proper measures to prevent the spreading of vulgar messages via
their systems.
2.3.4.
Tackling e-commerce violations and crimes
E-commerce has merely started to develop in Vietnam, thus social awareness of e-commerce and
practical application was still at low level. However, criminal and abusive violations in the cyber space
already occurred by increasing frequency, affecting the confidence of enterprises and consumers in this
new method of business. Criminal violations varied from defrauds in online trading, ATM card forgery to
virus spreading, password thefts and websites attacks. 2006 was an alarming year of e-commerce related
crimes in terms of the quantity, severity and frequency of crimes.
This situation has presented state management agencies with the urging demand of quickly completing
Vietnam’s legal framework to tackle crimes and establish a safe and sound environment for e-commerce
development. Involving ministries and industries have been conducting research to stipulate effective
sanctions for high-tech crimes in general and e-commerce related crimes in particular.
Crimes on network are now handled according to the following legal texts:
-
Electronic transaction law
Criminal law
The decree No. 55/2001 approved by the Government on the management, provision and utilization of Internet.
The decision No. 71/2004/QĐ-BCA for assuring the safety and security for the management, provision and utilization of Internet in Vietnam: proposing concrete levels of penalties for violations as
stipulated in the decree No. 55/2001
25
Virus Disperse
2006 was an alarming year of Vietnamese-originated viruses. According to BKIS’ statistics, within just a few
months those domestic viruses infected about 200,000 computers in Vietnam.4
It is widely recognized that this problem is due partly to the lack of harsh measures against virus dispersion
imposed by the State. Up to now, most severe penalty for high-tech crime are only administrative sanctions
such as warning, notifying to the offenders’ agencies or pecuniary penalties with highest level of just 10
million VND.
Box 1.17 Drastic penalties for high-tech criminals are urgently needed
According to Mr. Tran Van Hoa, Head of Anti High-tech Crime Department (under to C15), to keep
the stability of the network, there must be revision to the criminal law system that enables drastic
penalties for high-tech crimes.
“Handling violations has to base on legal texts whereas up to now Vietnamese criminal law system
only stipulated administrative penalties for high-tech crimes. Strict penalties, imprisoning for
instance, can only be applied if 4 necessary factors forming a criminal case are met, which are hard
to prove in cases of high-tech criminals.
Website attack
Beside such criminals as stealing credit cards through online transactions, dispersing viruses into
information systems, sending spam emails etc., attacks aimed at e-commerce websites occurred with
high frequency in 2006, interrupting many enterprises’ business operation, destroying the entire websites’
databases and thus damaging the property and image of enterprises.
Box 1.18 Typical website attacks in 2006
1.
www.vietco.com attack: during 3/2006 website www.vietco.com of SGC technology services
trading company had been attacked in DDoS mode and the website operation were cancelled
within a month. After the attack, SGC lost most of its customers, the number of employees
reduced from 30 to 4 people and the company was brought to ruin.
2.
www.nhanhoa.com.vn attack: 3 months since 3/2006 the website www.nhanhoa.com of Nhan
Hoa software Co., Ltd was attacked in DDoS mode and unable to operate. The company lost 200
customers and borne the damage of about 1 billion VND
3.
www.chodientu.com attack: www.chodientu.com of Peacesoft company continuously attacked
in 2005-2006. The first attack occurred in 3 days, from 22 to 24 October 2005 choking the
transmission line and making the website inaccessible. The second attack happened during
8/2006 with Spy ware and X-Flash to paralyze the website operation. www.chodientu.com
was attacked for the third time on 23 and 24 September 2006. Hackers attacked to usurp the
domain name of the website and upload unsound information about the company’s management
board.
4. Presentation by Mr Vu Ngoc Son – Head of Virus Department – Bach Khoa Network Security Center at Conference on E-commerce Violations
held by the Ministry of Trade on 11/7/2006
26
From legal point of view, these attacks can be considered as unsound competitive activities. Article
44 of the competitive law dated 12/03/2004 and approved by the National Assembly stipulated that:
“enterprises are prohibited to perturb business activities of others with direct and indirect obstructive
actions”. Article 9 of the electronic transaction law banned all the activities to sabotage the technology
infrastructure for electronic transactions. In serious cases, law-breakers and offenders could be criminally
penalized. However, legal texts constructing the way to handle such cases were still unavailable.
The Ministry of Judiciary was operating a project to supplement and update legal texts related to hightech crime to better manage and reduce the legal violations on network.
III. TECHNOLOGY INFRASTRUCTURE AND SUPPORT SERVICES FOR
E-COMMERCE
Information Society Index reported annually by International Database Group (IDG) is one of the researches
to evaluate the development level of information society among nations. This index ranks 53 nations in
the world basing on 15 indicators grouped into 4 areas (computer infrastructure, Internet infrastructure,
telecommunications infrastructure, and social infrastructure). According to figures announced in
September 2006, Vietnam ranked 52 in the 53 listed nations.
1.
Information technology industry
Total value of Vietnam IT industry in 2005 reached 1.4 billion USD, showing a 49.6% increase as compared
with the value of year 2004. The hardware industry thrived thanks to the growth of multinational
companies in Vietnam.
Table.1.9 IT industry value of Viet Nam in 2002-2005
Unit: USD million
Year
Software
Hardware
Total
Domestic market
Processing/ Export
Total
2002
65
20
85
550
635
2003
90
30
120
700
820
2004
125
45
170
760
930
2005
180
70
250
1150
1400
1.1.
Hardware industry
For the second year in a row, the hardware industry exceeded the threshold of USD 1 billion,5 becoming
one of the eight staple export industries with turnover above USD 1 billon per year (together with crude
oil, garment and textile, aquatic products, rubber, footwear, wood products and rice). However, the
development of the IT industry was mostly attributed to companies with 100% foreign capital investment,
manufacturing in Viet Nam and exporting to other countries. Domestic IT companies, especially top
computer manufacturers in Vietnam, after 3 years of high growth, has slowed down in 2006.
5. According to Department of Planning and Investment, Ministry of Trade, export turnover of the hardware industry (including electronic home
devices and computer components) in 2006 reached USD 1.77 billion, a 24% increase on year 2005
27
Table 1.10 Vietnam’s computer statistics in comparison with the world – year 2005
Total number of computer
(thousand)
Computers/ 100 inhabitants.
China
52’990
4.08
India
17’000
1.54
Indonesia
3’022
1.36
Japan
69’200
54.15
Korea (Rep.)
26’201
54.49
Malaysia
4’900
19.16
Philippines
3’684
4.46
Taiwan, China
11’975
52.78
Thailand
3’716
5.83
Viet Nam
1’044
1.26
Asia
226’640
6.51
Africa
17’450
2.24
Americas
296’491
34.73
Europe
236’116
30.21
Oceania
16’119
50.73
World
792’816
13.38
ITU 2005 Statistics (International Telecommunication Union, the United Nations)
(Italic figures are estimated numbers)
1.2.
Software industry and IT services
Turnover of Vietnamese software industry reached USD 250 million in 2005, of which USD 180 million were
for the domestic market (61.1%), and USD 70 million were from software outsourcing services (38.9%).
Total turnover showed a 47% increase as compared with year 2004. Turnover from software outsourcing
services increased 55.5%. Domestic software turnover increased 44%, with major contribution from the
digital content industry, especially from value-added services on mobile network and online games.
2.
Telecommunications and Internet
Year 2006 witnessed continuously high growth of telecommunications and Internet services in Vietnam.
In comparison with year 2005, the number of Internet subscribers increased 38%; Internet users increased
36%, making up 17.5% of the population.6 If year 2005 saw Internet user ratio of Vietnam surpassing the
average level of Asia, year 2006 has marked this ratio exceeding the average level of the world.7
6. Statistics announced in December 2006 by Vietnam National Internet Center (VNNIC), www.vnnic.net.vn
7. According to Internet World Stats, average Internet user rate of the world by the end of 2006 was 16.8%
28
Figure 1.1 Growth of Vietnam Internet users from 2000-2006
Vietnam Internet users (thousand)
16.000
14.509
14.000
12.000
10.710
1000
8000
6.345
6000
4000
2000
3.098
1.000
1.300
2001
2002
0
2003
2004
2005
2006
The Internet services market in 2006 developed following the trend of service diversification and market
share equalization among Internet services providers, although the centralization level was still high. The
four top service providers hold 92% of the overall Internet market and 98% of the broadband Internet
market.
Table 1.11 Top Internet service providers in Viet Nam
Rank
2006
Providers
Market share
2006 (%)
Market share
2005 (%)
Market share
2004 (%)
Market share
2003 (%)
1
VNPT
42.79
46.72
58.83
66.92
2
FPT Tel
19.66
27.65
22.65
20.68
3
Viettel
15.33
9.68
2.53
1.09
4
EVNTel
14.29
N/A
N/A
N/A
5
SPT
5.02
7.06
7.15
3.49
6
NetNAM
2.06
6.67
7.04
6.32
Vietnam National Internet Center (VNNIC),12/2006
During 2006, transmittance volume of international Internet connection almost doubled, from 3,615
Mbps to 6,235 Mbps. The leading connection service provider was VNPT with nearly 4,000 Mbps. FPT
Telecommunications followed with more than 1,500Mbps. A notable feature of the Internet and
telecommunications market in 2005-2006 was the vigorous development of ADSL services. The number
of ADSL subscribers in 2006 increased more than 200% as compared with year 2005, reaching 453,000
subscribers. This will be a strong momentum for the development of Internet-based services and digital
content industry in the future.
29
Table 1.12
Indicators for Internet development in Vietnam and the world – year 2005
Number of hosts
Hosts per 10.000
inhabitants
Number of Internet
users (thousand)
Internet users per
100 inhabitants
China
162’821
1.25
111’000.0
8.44
Indonesia
111’630
5.01
16’000.0
7.18
Japan
16’445’223
1’286.80
64’160.0
50.20
Korea (Rep.)
5’433’591
1’130.06
33’010.0
68.35
Malaysia
135’082
52.81
11’016.0
42.37
Philippines
65’390
7.91
4’400.0
5.32
Singapore
503’099
1’202.15
2’421.8
57.87
3’153’004
1’389.65
13’210.0
58.01
Thailand
360’255
56.56
7’084.2
11.03
Viet Nam
391
0.05
10’711.0
12.72
27’986’795
74.22
368’437.8
9.78
424’968
4.92
32’753.7
3.72
Americas
205’502’481
2’339.10
276’455.5
31.55
Europe
29’055’601
363.23
269’605.2
33.71
Oceania
4’571’332
1’404.66
17’019.5
52.03
267’541’177
421.63
964’271.7
15.17
Taiwan, China
Asia
Africa
World
ITU 2005 Statistics (International Telecommunication Union, the United Nations)
(Italic figures are estimated numbers)
3.
Electronic payment
According to statistics provided by the State Bank, cash payment still accounted for larger proportion (2030%) of total payment methods, whereas, card -payment only made up 2%. However, this figure showed
a milestone progress of card payment market in Vietnam in the recent three years. Some new payment
methods as mobile payment appeared in 2006, gives optimistic signal for diversified development of
electronic payment methods in the future.
3.1.
Development of the card payment market
From 2002, number of cardholders has increased in geometric progression. In three continuous years, the
average growth rate reached about 300%.8 By the end of 2006, number of cards issued in Vietnam was
estimated to reach four million, 3.6 million of which were domestic cards and 0.4 million were international
ones,9 increasing 150% as compared to year 2005.
8. “Banking card associations- 10 years of development” – reported by Ms. Nguyen Thu Ha, President of the association. Card magazine issued by
Banking card association 8/2006
9. Report of the State Bank in 12/2006 on the implementation of Decision No. 222/2005/QD-TTg on the master plan for e-commerce development
in 2006-2010 periods
30
Table 1.13 Some statistics of Vietnam’s card payment market
Number of cards issued
4 million
Number of card issuing banks
17
Number of ATM
2.500
Number of POS
14.000
Ratio of card payment over total payment volume of the economy
2%
Source: December 2006 Report by the State Bank
The increased number of cards issued led to a recorded augmentation of the value transacted via cards.
Value transacted through international cards increased fifty folds during the 2002 – 2006 period, reaching
an estimated USD 200 million by the end of 2006.
Card payment market developed sharply in 2002–2006. Network of card acceptance services has
expanded from several hundreds to 14,000 entities. The network has developed not only in quantity but
also in quality. People tended to use hand-swiping machines to read card in the near past. However, up to
now, 80-90% of card acceptance points have equipped with electronic data capture (EDC).
Banks paid lots of their attention to developing ATM services. In 2002, a bank only had several tens ATMs.
Now the number of ATMs increased to more than 2,500 throughout the country. More than 600 new
machines were installed in 2006. However, cooperation an infrastructure sharing in ATM system between
banks was still at low level, resulting in the distraction of the market and inconvenience for card users
when cards issued by a bank were disuse at ATMs of other banks.
3.2.
E-banking services
At present, most banks have their own websites and much or little offer online services through those sites
enabling customers to send questions and suggestions to the bank; view exchange rates, saving interest,
balance account, list of arising transactions; transfer money and pay invoice, etc. However, not all services
were in good operation. Account holders in Internet banking services could mostly check their balance
account, but rarely enable to transfer money or make payment for electricity, water, telecommunication
bills etc.
Besides Internet Banking, some other services like Phone Banking, SMS Banking, Mobile Banking and
Home Banking were being tested at different levels.
From 8/1/2006, more than 8000,000 multimedia card (MMC) holders of the East Asia Bank (EAB)
could transfer money through mobile phones. This is one of new services offered by EAB in their
second stage of SMS banking services launching. With SMS banking EAB’s MMC holders can make
transactions with the bank only by their mobile phones without limit of time or place.
E-commerce weekly news review, from 7th to 12th August, 2008 at www.mot.gov.vn
31
E-banking service can effectively operate and well support e-commerce transactions (especially B2B and
C2C transactions) only if there are high interoperability among banks’ systems and a well-functioning
payment gateway. Without such tools, e-banking services, even the most progressive ones, can only
allow clients to transfer money internally within a banking system. If sellers and buyers have accounts
at different banks, they are mostly unable to make electronic payments during online transactions. With
pressing demand for electronic payment in e-commerce some banks like EAB, Techcombank have taken
research and are preparing to deploy an electronic payment gateway in Vietnam.
3.3.
Mobile payment
At present, there were more than 10 million of mobile subscribers10 including prepaid and post paid ones.
Most subscribers were high-income people or the youth who were sensitive with new technologies. In
comparison with 12 million Internet users, the number of mobile users was so potential for e-commerce
application in general and in particular for mobile solutions in near future.
mATM
In 4/2006, a mATM services were officially introduced at seminar titled “Information Technology Overview
of Vietnam in 2006” and “Vietnam Computer Electronic World Expo 2006” exhibition. mATM services
were based on the cooperation between Minh Viet International Company, Asia Commercial Bank (ACB),
Vinaphone and eMobile – a mobile solutions provider from Singapore. With mATM service, clients of ACB
using Vinaphone (regardless prepaid or post paid) can check account by mobile phone, debit account for
payment, and withdraw money from account at retail points, or buy online or offline services accepting
payment by mATM. Retailer can even perform electronic money transferring and receiving services
despite their customers have accounts opened at the bank or not.
According to the plan for mATM services, by the beginning of 2007, mATM will be concretized into the
following services:
1. Clients of ACB registered mATM can make payment and withdraw cash at all Fujifilm camera shop
in Vietnam.
2. Clients of mATM can use their mobile phone and account at ACB to make payment for online photo
printing at www.imv.com.vn. They will receive the photos at a nearest Fujifilm shop afterward.
3. Clients of mATM can fully perform transactions with bank by their mobile phone.
mBay
On 8/1/2006, Evina Trading Company officially opened an online buying and selling system and mobile
payment system at www.mbay.com.vn. This was a place where individuals, organizations and enterprises
can freely buy and sell products and services. In addition, mBay also offered collecting service through
SMS mobile payment technology for members of mBay.
10. According to the statistics by ITU, Vietnam has over 9,593,000 mobile phones subscribers, accounting for 11.39% of the population and 37.7%
total subscribers throughout the country.
32
“When a customer registers for mBay, we will activated one more separate mBay account for
him/her on their own SIM card besides his/her own account at Vinaphone or Mobifone. The mBay
account holder will load money on his/her account through PC ATM software provided by eVina. With
such money, he/she can do buying or selling on mBay system. eVina with keep the sellers’ name
for secret. Once the buying decision is made, eVina will provide contact information for the involved
parties and the transaction fee will be charged.” – says Ms. Nguyen Thi Minh Thu – manager of
mBay project.
mBay system will deduct 5% of the order from the buyers’ account as a deposit. This is to assure the
trustfulness of the buying decision. On receiving the deposit, the systems will automatically diminish
the chosen products and services out of the products ranges listed on the website and information
of involving parties will be provided. In case the transaction fails, the deposit will be returned to the
buyers’ accounts with 2,000 plus.
mBay has just apply the services with products/services buying and selling. “We have just
implemented the services within mBay services but not yet operate payment service via telephone
although the system infrastructure is available. eVina will cooperate with many banks to run this
service in the future”- says Ms. Thu
Computer World, B series, 8/2006 issue, “Era of M-commerce ”, p. 50
The above two models of mobile payment was still at the initial stage of development. The effectiveness
and application level has not been defined. However, mATM and mBay put a very first step to m-commerce
realization and contributed to diversify payment solutions for e-commerce in Vietnam.
33
CHAPTER 2
ONLINE PUBLIC
SERVICES
CHAPTER 2
ONLINE PUBLIC SERVICES
I.
BACKGROUND
1.
Basic functions of an administrative agency’s website
Basically, websites of administrative agencies have 3 major functions as follows:
-
-
Providing sufficient information related to the sector, area or locality administered by that agency, of which the most important are policy and legal documents having relevance to or impact
on people’s life and activities of organizations and individuals under the administration of that
agency.
Exchanging and receiving feedback from organizations and individuals so as to improve formulation and enforcement of policies and laws as well as operation of the agency.
Providing online public services administered by that agency, meaning conducting partial or full
process of administrative procedures via the Internet.
While in the first function, information is provided only one-way from the administrative agency to outside
organizations and individuals, in the second and third functions, information exchange is two-way. In
both cases, information provided by the administrative agency is not in the form of “raw” information,
but already “customized” to satisfy needs of one or a number of organizations and individuals at a certain
time. The use of website to perform the third function will be a major breakthrough in administration
reform, helping accelerate the processing of administrative procedures, facilitate enterprises and people,
and save many social costs such as traveling costs, waiting time etc.
Currently all administrative websites are performing the first function at different levels of information
volume and quality. A few administrative websites perform the second function with forums, online
dialogues, question and answer via the website and the third function with business registration and ecustoms declaration.
2.
Public services and online provision of public services
One of the tasks of administrative agencies, including Ministries at the central level and People’s
Committees at various local levels, is to provide public services.
37
Public services are all activities of communication between administrative agencies and organizations and
individuals in society with the final outcome of meeting a need of those organizations and individuals.
Public services are the output of policy-making activities and institutionalized in legal documents. Among
users of public services, enterprises constitute a large proportion. Meanwhile, there are a great number
of public services provided by administrative agencies. For instance, statistics by December 6, 2006 show
that there are as many as 35 public services in the trade sector.
Table 2.1 Some public services in the trade sector
No.
Public services
Legal basis
1
Permit temporary import for re-export, temporary export for
re-import, and in-transit shipments
Decree No.12/2006/ND-CP
2
License import of two-wheel and three-wheel motor vehicles
with engine cylinder volume of 175 cm3 or more
Decree No.12/2006/ND-CP
3
License export of fertilizers with import origin
Decree No.12/2006/ND-CP
4
Permit business persons to offer promotion in the form of lottery tickets
Decree No.37/2006/ND-CP
5
Register to organize fairs and exhibitions abroad
Decree No.37/2006/ND-CP
6
Issue D-form certificate of origin for exports to other ASEAN
countries
Decision No.1420/2004/QD-BTM
7
Allocate quota for apparel exports to the U.S.
Joint-Circular
No.18/2005/TTLT/BTM-BCN
8
Issue liquor business licenses
Decree No.59/2006/ND-CP
9
Issue licenses for foreign businesses to establish branches and
operate in Vietnam
Decree N9.72/2006/ND-CP
10
Issue franchising licenses for franchise between foreign and domestic business entitiies.
Decree No.35/2006/ND-CP
Source: Ministry of Trade
Public services are exclusive rights of administrative agencies, meaning that only administrative agencies
or organizations mandated by them are authorized to provide public services. For example, only police
agency is authorized to grant ordinary passports, only district-level Natural Resources and Environment
Departments are authorized to issue land-use right certificates. That is different from ordinary services
which may be provided by private enterprises or institutions.
The fact that only administrative agencies are entitled to provide public services results in the monopoly of
services, leading to their authoritarian working manner and failure to quickly satisfy the needs of enterprises
and people. When prolonged in some places, that situation leads to people’s discontents against the working
manner of administrative agencies, increase business costs and reduce competitiveness of enterprises.
Aware of the importance of facilitating enterprises and people’s access to public services, the Government
has promulgated various directives and measures to improve this situation as part of the process of
38
administration reform. Together with reform of administrative processes, restructure of the organizational
system and enhancement of personnel capacity and expertise, application of information technology in
public services and bringing them “online” have become a breakthrough measure actively taken by many
administrative agencies over the past time.
Provision of online public services is conducted in various forms. Given the context that Internet has
become popular, the most common form is administrative agencies’ using websites to provide information
and conduct transactions with enterprises and people.
Box 2.1 Contents of developing e-Government in the Strategy for Information and Communication
Technology Development towards 2010
100% of Government agencies will have websites with complete information about their respective
activities, relevant laws, policies and regulations, administrative procedures, working processes,
and investment, tender and procurement projects. Enterprises and people will be able to quickly and
easily look for information relevant to activities of administrative agencies. The system of information
about population, officials and civil servants, natural resources, environment and statistics should
have basic information updated adequately and regularly. Some services of declaration, registration
and licensing are provided online via information systems of urban districts and departments in
cities and provinces.
Decision No. 246/2005/QD-TTg dated October 6, 2005 of the Prime Minister approving Vietnam’s strategy
for Information and Communication Technology Development till 2010 and orientations toward 2020.
As of December 2006, all Ministries and 52 out of 64 provinces and centrally-administered cities have had
their own websites, of which some have offered online public services and allowed access to business
information, download of application form, extension of licenses, business registration, license application
and tax payment etc. This is an important step towards building an e-Government in Vietnam. While a
number of websites were put into operation in or before 2003, the majority have become operational since
2004. Nonetheless, the level of technology application and practical efficiency of these administrative
websites varied among Ministries and among localities.
Information available on administrative websites currently remains both redundant and insufficient.
Many websites post duplicate information while still lack information about respective agencies’ area
of specialization to meet the look-up needs of users. In reality, electronic communication gates of cities
and provinces haven’t become databases allowing users to find various kinds of information. A lot of
information exists in the forms of texts, official documents, regulations or excerpts from newspapers
without thorough editing and conformity with specific features of online information.
Some state agencies have made great efforts to bring public services online, with some typical examples
as Hochiminh City People’s Committee and the General Department of Vietnam Customs. Although some
typical online public services like tax declaration, business registration, e-customs declaration, electronic
issuance of certificates of origin have received attention and been put in operation by Ministries and
localities, they are still piloted and lack consistent orientation. Provision of online public services remains
limited at providing information about forms and processes, far from the level of replacing paperwork
and conducting online communication between enterprises and citizens and state agencies.
Between September and December 2006, the Department of E-Commerce (Ministry of Trade) had
conducted a survey and assessment of the current situation in provision of information and public
39
services to enterprises on administrative websites. Main findings will be introduced in Part II and Part III of
this Chapter. In addition, Annex 2 provides useful information about websites of Ministries and localities.
3.
Ministries and localities’ readiness for ICT application
Among elements needed for successful provision of online public services, readiness for ICT application,
or E-Readiness, is important. Determining this Readiness has been given more and more attention
from agency and business leaders. The Vietnam Association for Information Processing has started to
build a set of indicators for E-Readiness since 2003. This set of indicators is one of convenient tools to
evaluate readiness of each agency or enterprise, subsequently determining ICT development strategies
or orientations of that agency or enterprise.
In August 2006, the Office of the National Steering Committee on Information Technology joined with
the Vietnam Association for Information Processing in releasing Index on the readiness for development
and application of information and communication technology of Vietnam for year 2005 (Vietnam ICT
Index 2005). According to the report, the readiness for development and application of ICT of Ministries in
terms of technical and human infrastructures, organization and policy environments etc. are as follows:
Table 2.2 E-Readiness ranks of Ministries
No.
40
Ministry
Technical
Infrastructure
Human
Infrastructure
ICT
application
Organization
and policy
environment
ICT Index
1
Ministry of Trade
0,7201
0,3942
0,6519
0,8333
0,6163
2
Ministry of Posts and
Telematics
0,6978
0,6703
0,4402
0,6667
0,6059
3
Ministry of Finance
0,3787
0,5991
0,6264
1,0000
0,5217
4
Ministry of Transport
0,4927
0,3736
0,5186
0,1667
0,4680
5
Ministry of Home
Affairs
0,4830
0,5240
0,3906
0,8333
0,4662
6
State Bank of
Vietnam
0,4013
0,3443
0,6233
0,8333
0,4639
7
Ministry of Justice
0,5278
0,3490
0,4226
0,6667
0,4493
8
Vietnam National
Administration of
Tourism
0,4885
0,3877
0,4040
0,5833
0,4361
9
Ministry of
Construction
0,5634
0,2586
0,3954
1,0000
0,4351
10
Ministry of Health
0,6170
0,0038
0,5211
1,0000
0,4339
11
Ministry of Culture
and Information
0,6038
0,2663
0,3461
0,2500
0,4303
12
Vietnam Institute
for Science and
Technology
0,5209
0,1409
0,5165
1,0000
0,4278
Human
Infrastructure
ICT
application
Organization
and policy
environment
ICT Index
No.
Ministry
Technical
Infrastructure
13
Ministry of Planning
and Investment
0,4924
0,5366
0,1978
0,2500
0,4044
14
Ministry of Natural
Resources and
Environment
0,4703
0,3036
0,3536
0,5000
0,3900
15
Vietnam Television
0,4662
0,4276
0,1274
1,0000
0,3500
16
Ministry of Science
and Technology
0,4270
0,4108
0,2086
0,1667
0,3486
17
Ministry of Foreign
Affairs
0,3414
0,1675
0,4613
0,3333
0,3367
18
General Statistics
Office
0,3505
0,2783
0,3529
0,6667
0,3360
19
Radio the Voice of
Vietnam
0,3046
0,2947
0,3610
0,5000
0,3224
20
Ministry of Industry
0,3994
0,3514
0,1839
0,6667
0,3189
21
Committee for
Ethnic Minorities
0,3318
0,1744
0,2896
0,6667
0,2812
22
Government
Information Security
Committee
0,1649
0,3699
0,3114
1,0000
0,2728
23
Ministry of Labor,
Invalids and Social
Affairs
0,3990
0,2355
0,1244
0,5833
0,2690
24
Ministry of Fisheries
0,2876
0,1228
0,2958
0,6667
0,2521
25
Ministry of
Education and
Training
0,2283
0,1933
0,2641
1,0000
0,2384
26
Ministry of
Agricultural and
Rural Development
0,1972
0,1490
0,1984
0,8333
0,1913
Source: Vietnam ICT Index 2005, Office of the National Steering Committee on Information Technology and the Vietnam Association for Information Processing, August 2006
Among top 10 Ministries and agencies in the ranking list, as many as 7 are in the economic block. In
the time of reform and international economic integration, those Ministries of the economic block are
under greater reform pressure to meet the needs of enterprises, therefore application of information
technology have become their urgent need. The three with the highest ranks – Ministry of Trade, Ministry
of Posts and Telematics and Ministry of Finance – are those who have made widespread investment in all
41
technical infrastructure and human infrastructure, applied information technology in their management
and issued policy documents facilitating application of information technology. Notably, Ministry of Trade
and Ministry of Finance have been the two agencies assuming the greatest responsibility in Vietnam’s
negotiations for accession to the World Trade Organization (WTO) for more than a decade now.
In terms of human resources alone Ministry of Post and Telematics gets high rank because this is the
state agency administering information technology, thus capable of mobilizing forces of IT experts.
Meanwhile, Ministry of Education and Training’s advantage of sources of officials from education and
training institutions hasn’t been able to help improve the Ministry’s index of ICT human resources.
The organizational environment and policy for information technology comprises strategies and
mechanisms to encourage application of information technology operational structure, and executive
officers and leaders’ attention to IT application. Certain Ministries have scored high in the indicator
of leaders’ attention, but failed to score high overall. That indicates leaders’ attention is essential, but
it is more important to turn that attention and policies into specific activities to enhance the agency’s
capability of IT application.
Readiness for development and application of ICT of 20 localities with the highest ranks are as follows:
Table 2.3 20 localities with highest E-Readiness level
Technical
Infrastructure
Human
Resources
ICT
application
ICT
business and
production
Organizational
environment
and policy for
ICT
ICT
Index
No.
Cities/Provinces
1
Hochiminh City
0,5671
0,4883
0,2994
0,8252
0,6667
0,5500
2
Ha Noi
0,6235
0,6028
0,1958
0,6095
0,6667
0,5444
3
Da Nang
0,5740
0,4145
0,1364
0,2737
0,8889
0,4144
4
Can Tho
0,4094
0,4161
0,5827
0,0553
0,7778
0,3954
5
Ba Ria Vung Tau
0,3692
0,3656
0,5734
0,1425
0,8889
0,3880
6
Khanh Hoa
0,2693
0,5165
0,4695
0,1454
0,8889
0,3846
7
Dong Nai
0,3060
0,5052
0,5550
0,1863
0,0000
0,3699
8
Lam Dong
0,2224
0,4330
0,4070
0,1993
0,6667
0,3337
9
Quang Ninh
0,2710
0,2867
0,2621
0,5000
0,5556
0,3297
10
Quang Binh
0,1710
0,3022
0,2348
0,4327
0,8889
0,3035
11
Bac Ninh
0,2216
0,2721
0,3115
0,3674
0,7222
0,3031
12
Thua Thien - Hue
0,2172
0,4117
0,2984
0,1544
0,6667
0,2993
13
Lao Cai
0,2036
0,2607
0,5107
0,1668
0,6667
0,2891
14
Hai Phong
0,2522
0,2986
0,4343
0,1528
0,4444
0,2885
42
Environment
of organization
and policy for
ICT
ICT
Index
Technical
Infrastructure
Human
Infrastructure
ICT
application
ICT
business and
production
Vinh Phuc
0,2553
0,3671
0,2068
0,0950
1,0000
0,2883
16
Binh Duong
0,2965
0,2196
0,4849
0,0210
0,5556
0,2692
17
Binh Thuan
0,2259
0,1830
0,4727
0,0690
1,0000
0,2657
18
Hai Duong
0,2117
0,2148
0,1577
0,3341
1,0000
0,2650
19
Thai Nguyen
0,1339
0,4647
0,3215
0,0521
0,4444
0,2637
20
Kien Giang
0,2458
0,2811
0,2070
0,0905
0,9444
0,2566
No.
Cities/Provinces
15
Source: Vietnam ICT Index 2005, Office of the National Steering Committee on Information Technology and the Vietnam Association for Information Processing, August 2006
Topping the locality group are the 3 major economic centers of the country – Hochiminh City, Ha Noi and
Da Nang. Those cities are home to a large number of agencies, organizations and enterprises who apply
information technology, a large team of qualified experts and substantial investment in IT infrastructure.
Vinh Phuc, Binh Thuan and Hai Duong are those provinces who are highly appreciated for their environment
of organization and policy, though that hasn’t really helped them obtained a high score of E-Readiness.
Khanh Hoa, Bac Ninh and Thua Thien – Hue are those who have high ICT application in reality, but they are
not in the group of top scorers partly because their indicators of IT business and production remain low.
All centrally-administered cities are present in the top 20. The remaining provinces all enjoy high economic
growth rates and attract significant foreign investment. The presence of two mountainous provinces Lam
Dong and Lao Cai in the list can be attributed to advanced policies and continuous support of the local
leaders over the past years, that strongly encouraged application of information technology for the sake
of socio-economic development.
II.
INFORMATION PROVISION AND ONLINE PUBLIC SERVICES ON
MINISTRIES’ WEBSITES
1.
Overall
1.1.
Number of websites
In 2006, the Government of Vietnam comprises of 20 Ministries and 6 ministerial-level agencies. With
the target of assessing information provision for enterprises by state websites, this Report surveyed 30
websites of Ministries and agencies who have activities relevant to enterprises.
-
Ministry websites: 18 (except Ministry of Defense and Ministry of Public Security). Among these
websites, the website of Ministry of Internal Affairs wasn’t operational during the survey time
(December 2006).
43
-
Websites of ministerial-level agencies and governmental bodies: 2 websites of the State Bank of
Vietnam and the National Committee on International Economic Cooperation.
Websites of general departments and departments: 10
Box 2.2 Websites of the Government, the Party and the National Assembly
The Government has established website www.vietnam.gov.vn which is also accessible via the
address www.chinhphu.vn) and website www.egov.gov.vn. These websites host data and links to
websites of the Party, the National Assembly, Ministries, provinces and cities nationwide, facilitating
organizations and individuals who need to look for information from state authorities. It is also
a step forward of the Vietnamese Government in the approach of “one stop” and toward people,
enterprises and civil society organizations.
In addition, the website of the Communist Party of Vietnam www.cpv.vn and the website of the
National Assembly www.na.gov.vn are also important channels in informing guidelines and policies
of the Party and State, providing the service of online dialogues between Party and State leaders
and enterprises and citizens.
1.2.
Websites’ interface
In general, websites of Ministries have reasonable information structures and clear-cut classification of
information into groups and headings. Interfaces of some websites were well and impressively designed,
with harmonious combination of colors, beautiful and rich introduction and home pages, such as websites
of Ministry of Culture and Information, Ministry of Industry and Vietnam National Administration of
Tourism.
However, most Ministry websites have simple interfaces with little attention to balancing texts and images,
thus not attractive and rich. One third of the surveyed websites have homepage interface displaying
only information and texts, lacking images except for website links and advertisement. In addition, there
remain some websites displaying the whole text right on their homepages, causing negative feelings for
viewers. Some websites divide length of news columns disproportionately with too-long columns or tooshort columns, placing horizontal news blocks beside vertical news columns or even lacking a system of
heading menus, thus making it difficult for viewers to read information. Almost all websites have U-type
homepage interfaces, meaning banners above, two functions bars in the two sides, only the space at the
center displaying changing information.
1.3.
Websites’ features
All websites have features of providing and managing information, updating news about activities
and typical events of each Ministry as well as political, economic, cultural and social news of the whole
country. 100% of Ministry websites post and enable search for legal documents and relevant forms for
administrative procedures of each Ministry.
Government-to-business (G2B) communication in the form of public services is still limited, most of
which are business support information services such as apparel export quota look-up or instructions of
relevant administrative procedures. Some Ministry websites have bidding invitations but are yet to allow
online bidding or submission of bidding documents.
44
Table 2.4 Summary of some features on 29 currently operational Ministry websites
Search
Feature
Number of websites
Normal
Advanced
13
14
Forum
FAQ, dialogue
Procedure
disclosure
9
11
10
Information about
Feature
Number of websites
Public services
Activities
Legal Texts
Projects
Specialize area
29
27
9
27
3
Source: E-Commerce Department, Ministry of Trade
Some websites allow membership registration and member log-in. However, this feature is mainly
reserved for internal members to use e-mail and look up information inside a sector or agency, not open
to all website users.
Frequently asked questions (FAQ) serve as a useful bridge between websites and users, though the number
of having FAQ section accounts for only one third of the total Ministry websites. On some websites, there
are few questions in the FAQ section, or questions aren’t concrete and sufficient enough, as most of them
provide only instructions for how to use the websites.
Regarding languages, most websites of Ministries have already had English versions. Notably, the website
of Vietnam National Administration of Tourism has 5 versions in 5 different languages of Vietnamese,
English, French, Japanese and Chinese.
Table 2.5 Summary of language display on 29 currently operational Ministry websites
Languages
Only Vietnamese
Vietnamese and English
Multi-languages
Number of websites
7
21
1
Source: E-commerce Department, Ministry of Trade
Loading speeds of administrative agency websites are just medium. Some websites load slowly because
their introduction pages or/and homepages have many images or/and flashes. Many websites lack
uniform format for download documents, particularly in the section of legal documents. The regularlyused formats of documents for download are DOC, PDF, ZIP, RAR, XLS, and RTF. Moreover, some websites
offer support for users to download some enhancers such as Vietnamese Fonts and Acrobat Reader.
In general, internal search tools of websites have limited search capability, while their database is not rich.
Legal document search tools usually allow search for legal documents based on date of issue or issued
number or require choosing available fields, thus not convenient for search by key words. Only 13 out of
30 websites allow advanced search, providing more search fields for searchers. In addition, only half of
Ministry websites record the number of visitors.
45
Useful links on Ministry websites are not abundant. Some links even don’t function. Most of links go to the
Government website or other Ministry websites.
1.4.
Quality and content of websites
The data updating frequency of most Ministry websites are low. The majority of websites update information
on the basis of events, corresponding to time of new decisions/documents or time of outstanding events
in relevant fields. Among 30 Ministry websites, 8 update daily, 10 update more frequently about 2 – 3
times a day, and 12 update occasionally every week or corresponding to events.
Contents of information related to administrative procedures are rich, yet not thoroughly edited to conform
to the electronic news format, as most of websites keep providing original paper documents, official
documents or decrees. As a result, users find it difficult to both read and look up information. Moreover,
some websites have only headings in menus without contents. This is because Ministry websites lack
professional web editing boards, leading to infrequent information provision as well as oversimplified
and disregarded data organization, exploitation and update.
Regarding information reliability, the majority of Ministry websites are highly reliable, with information
directly sourced from working units of the Ministries. In addition, some Ministry websites use major
newspapers as well as specialist press as their sources of information.
All Ministry websites specify people who are responsible for the websites’ contents and detailed
contacts.
2.
Information provision
Information provision is a public service of state agencies. However, because online information provision
is simpler than online provision of other public services, this Report divides public services into 2 groups
which are services of information provision and other public services.
2.1.
Information provision
In general, information provided to enterprises on Ministry websites can be divided into 4 main groups
as follows:
-
Information on activities of respective Ministries or agencies;
Information on systems of relevant legal normative documents;
Information on major projects and programs administered by respective Ministries;
Specialized information related to scopes of activities of enterprises.
8 out of 30 websites have all 4 above-mentioned information groups. Among those groups, information
on organization and activities of Ministries or agencies and information on systems of legal normative
documents are dominant contents on those websites. Those contents help enterprise stay aware of
activities and major guidelines and policies of Ministries and agencies, facilitating them in contacting and
completing related procedures. However, information on systems of legal normative documents remains
fragmented and duplicate. Every website has the section of legal normative document search, but there
are certain duplicate documents, while some documents can’t be found.
46
The rest of 22 websites lack the third group of information on major projects and programs related to
enterprises administered by respective Ministries. This indicates that disclosure of Ministry-administered
projects on websites remains limited, therefore small and medium enterprises have few opportunities to
participate in those projects.
In addition, Ministry websites are rich sources of information on specialized sectors, helping enterprises
learn about sectors related to their business. For instance, the website of Ministry of Planning and
Investment has information on bidding and procurement of goods and services financed by the State
Budget, information on investment supervision, allocation and use of Official Development Assistance
(ODA) funds, etc.
2.2. Online interaction and exchange of information
Via their websites, administrative agencies are not only to provide information to citizens but also to
create opportunities for citizens to raise their ideas which should be listened and received by the agencies.
One simple way of interaction is use of forum and forms of feedback. Forum is a democratic discussion
form on websites. Having advantage of discussion participation regardless of space and time, forum is a
good tool for enterprises and citizens to discuss and contribute their ideas about policy formulation and
implementation of administrative agencies.
Although this form of communication is very popular on ordinary websites, Ministry websites have so far
paid little attention to development of forum. As a result, they have poor interaction, dialogue and online
forum. Of 30 surveyed websites, only 8 have forums and 8 have feedback sections. Some forums exist but
have fallen into oblivion with few member log-ins and no new posts or feedback. One reason is that those
websites fail to attract readers, or questions haven’t been answered timely and clearly. The forums on the
websites of Ministry of Trade and Ministry of Natural Resources and Environment attract many members
and have rich and serious contents for exchanges of ideas and discussions. The forum of Ministry of Trade
came into operation in 2003, but hasn’t become prestigious until 2006. On this forum, there are many
profound discussions about trade issues that receive great attention from numerous enterprises and
citizens like international economic integration, the Commercial Law, e-commerce, multi-level sales etc.
In 2006, Ministries paid more attention to use of website for collecting feedback and comments for draft
legal normative documents and conducting public opinion surveys of new policies or events of their
respective sectors. For example, the website of Ministry of Finance invited comments on draft documents
on public finance and State Budgeting. The website of Ministry of Justice conducted a public opinion
survey of completion of the national law database. The website of the General Department of Taxation
has a section to answer questions on taxes and tax procedures.
2006 witnessed a tendency of greater attention paid by Governmental and Ministerial leaders to online
dialogues with citizens. On the website of Ministry of Natural Resources and Environment, Minister Mai Ai
Truc and Deputy Ministers as well as department-level officials conducted online dialogues with citizens
about relevant issues, with most focus on land issues, attracting numerous citizens to raise questions and
make recommendations and proposals.
47
Box 2.3 The State Website helps broaden communication between Government and citizens
Office of the Government specifies organization of receiving feedback and recommendations of
individuals, organizations and enterprises about administrative procedures on the Government
website, including difficulties met by individuals, organizations and enterprises in completing
administrative procedures, delays of state administrative agencies in dealing with administrative
procedures, and recommendations on amendment or removal of those procedures no longer
matching reality and impeding business and production of enterprises and people.
Results and progress of dealing with difficulties and recommendations of individuals, organizations
and enterprises are to be timely informed on the Government website.
Decision No. 07/2006/QD-VPCP dated August 18, 2006 by Office of the Government.
On the Online Newspaper of the Vietnam Communist Part, Minister of Education and Training Nguyen Thien
Nhan had conducted online dialogue with citizens on hot and sensitive issues in the field of education and
training, including those of outside-class teaching and learning and enrolment. During the time of online
dialogue, the Minister couldn’t answer all the questions, but he promised to answer them on the website
of Ministry of Education and Training (www.moet.gov.vn). Like Minister Mai Ai Truc, Minister Nguyen Thien
Nhan showed a democratic open style of leadership when asserting that all questions sent by people to
Ministry of Education and Training would be answered on the Ministry’s website. Moreover, not only the
Minister but also Deputy Ministers and leaders of consultative departments have the responsibility to
answer questions of citizens.11
At the highest level, the head of the Government – Prime Minister Nguyen Tan Dung, is also ready for
“online dialogue”.
“I have asked Ministries to study experience of Ministry of Natural Resources and Environment to
conduct dialogue with citizens. I have demanded that the Government website open a section of
receiving online comments of people and that section has been operational for over one month now.
I’m also ready to conduct online dialogue with people whenever convenient.”
Speech delivered by Prime Minister Nguyen Tan Dung to the 11th National Assembly, 10th Session,
on November 27, 2006.
3.
Status of online public services
Although the service of information provision on Ministry websites are relatively diversified, rich
and frequently updated, online provision of other public services remains limited. Even disclosure of
procedures of public services on websites was observed only by a few Ministries.
3.1. Disclosure of public services procedures on websites
Some Ministry websites have disclosed procedures of public services such as procedures of granting
business licenses, issuing export-import permits, registering for protection of industrial property rights,
and consular procedures, or providing license or declaration forms etc. and receiving filled-out forms
online, as well as informing document codes and results of online application processing.
11. Tien Phong Newspaper, Issue No. 298, dated December 19, 2006
48
Table 2.6 Disclosure of procedures of public services on some Ministry websites
No.
Ministry or Agency
Public services
1
Ministry of Trade
www.mot.gov.vn
- Procedures of granting permits and certificates
2
Ministry of Industry
www.moi.gov.vn
- Procedures of granting permits and certificates
3
Ministry of Foreign Affairs
www.mofa.gov.vn
- Consular and protocol procedures
- Application forms
4
General Department of Taxation
www.gdt.gov.vn
- Tax payment procedures
- Tax invoice forms
Ministry of Industry is among the pioneers in disclosing procedures of online licensing. On its website,
one can easily find licensing procedures for 10 types of licenses. The following box demonstrates the
licensing process for one of those 10 licenses.
Box 2.4 Description of a licensing process on the website of Ministry of Industry
The process of licensing export or import of pre-chemicals for industrial uses
The Department of Mechanics, Metallurgy and Chemicals – Ministry of Industry is the unit handling
application documents submitted for licenses of export or import of pre-chemicals according to the
process 08 (QT_08) ISO 9001:2000.
Diagram of the process of licensing export or import of pre-chemicals for industrial uses
Leaders, officials and civil servants of Ministry of Industry, with combined determination and efforts,
are committed to performing functions of state administration over the industrial sector effectively
and efficiently, and fulfill quickly, accurately and efficiently public services to meet the needs of
organizations and individuals engaged in industrial activities across the country.
1. Receipt of applications
The clerical section of the Department of Mechanics, Metallurgy and Chemicals receives from the
Ministry’s Clerical Section application documents of enterprises for licenses of export – import of
pre-chemicals for industrial uses and submit those documents to Department leaders. Receipt of
documents is conducted according to Procedures for handling in and out documents (QT.05).
2. Task assignment
Department leaders assign chemicals officials, namely handling officials, to be responsible for
checking and assessing application documents for licenses. Contents of tasks are clearly written
down in Note of document handling requirement (QT.05).
3. Checking licensing conditions and appraising application documents
3.1. Checking licensing conditions according to the following requirements:
a. Application documents should comprise all the following documents:
- Application for export, import conforming to Form 1 of the Procedures of Administering prechemicals for industrial uses
…
3.2. Appraising application documents
a. Handling officials are responsible for appraising application documents for license of export or
import of pre-chemicals for industrial uses and report to Department leaders to decide later;
49
4. Printing licenses
Handling officials are responsible for drafting licenses of export – import of pre-chemicals then
submitting the licenses to Department leaders who subsequently submit them to Ministry leaders.
After Ministry leaders examine and agree on contents of those licenses, handling officials print out
the licenses.
5. Approving licenses of export – import of pre-chemicals
After printed out, licenses of export – import of pre-chemicals are submitted to Ministry leaders,
specifically the Deputy Minister in charge of the chemicals sub-sector, for approval.
6. Issuing licenses
Licenses of export – import of pre-chemicals are made in 06 copies: 01 copy sent to applying
enterprises, 01 copy sent to Ministry of Home Security, 01 copy to General Department of Customs,
01 copy to border gate customs, 03 copies kept as archives at Ministry of Industry.
7. Monitoring implementation and archives
a. Handling officials are responsible for monitoring enterprises’ export, import and use of prechemicals via quarterly and yearly reports (enterprises submit reports according to forms in Annex
3a and Annex 3b, and officials update database according to Table B.08.01).
Ministry of Trade is also one of those who are determined to disclose procedures of public services. In late
2006, Ministry of Trade reviewed and post openly completion processes of 35 administrative procedures
under the administering of the Ministry at its office and places of receiving application documents. The
detailed list of administrative procedures and completion processes is posted on the official website of
Ministry of Trade (http://www.mot.gov.vn).
Box 2.5 Description of a licensing process on the website of Ministry of Trade
Import licensing for sports guns and ammunition
1. Presiding Unit
Department of Export and Import
2. Handling officials
No.
Full name
Job title
Duties
Telephone
1
Ho Quang Trung
Deputy Director
Directing
(04) 8.246.803
2
Ho Son Nga
Official
Executing
(04) 8.262.538 ext. 1152
3. List of documents
-
Official application documents of business person
-
The Decision approving import issued by the Minister and Chairman of Sports and Physical
Training Affairs.
4. Charges: None
50
Step No.
Job
Time
1
Officials assess documents, make proposal papers to Ministry leaders
and draft official documents replying enterprises, starting from the
time of receiving eligible application documents.
2 days
2
Submit all to Department leaders
1 days
3
Submit all to Ministry leaders for approving, signing official documents
and complete procedure for issuing official documents
2 days
6. Relevant legal normative documents
-
Decree No. 12/2006/ND-CP dated 23/01/2006 by the Government specifying the implementation
of the Commercial Law on international goods sale and purchase and activities of sale and
purchase agency, processing and transit of goods with foreign parties;
-
Circular No. 04/2006/TT-BTM of April 6, 2006 guiding a number of contents of Decree No.
12/2006/ND-CP.
Some websites have the section of “Instructions for administrative procedures” yet without contents or just
staying at posting relevant legal normative documents, such as the website of Ministry of Construction.
3.2.
Online provision of public services
In 2006, there were no ministries or agencies actually providing online public services. Ministry of Finance,
specifically the General Department of Vietnam Customs, has implemented a pilot project of e-customs
for the past several years and obtained some progresses in 2006. The service of e-customs declaration will
be mentioned in the part of locality websites survey.
Given this context, Ministry of Trade’s pro-active implementation of electronic certificate of origin issuance
(eCoSys) can be considered as a positive signal about online provision of public services. The following
part will describe in detail about provision of that service in 2006 and implementation plan for 2007.
The importance of Certificate of Origin (C/O) and electronic certificate of origin
C/O plays an essential role in exports and imports between Vietnam and other signatories to Free Trade
Agreements (FTA). Commodities exported from Vietnam to the territory of another member country, in
order to enjoy preferential tariffs, shall have C/O issued by authorized agencies of the exporting country.
Aware of the importance of origin of goods, the National Assembly and the Government have specified
regulations on this matter.
In the amended Commercial Law approved by the National Assembly in 2005, origin of commodities is
provided for as follows:
51
Article 33 Certificate of origin of goods and rules of origin of goods
1. Export and import goods shall have certificates of origin in the following cases:
a)
Goods enjoy preferences in tariffs or other preferences;
b)
As provided for by Vietnamese laws or international treaties of which the Socialist Republic of
Vietnam is a member.
2. The Government shall provide for in detail rules of origin of export and import goods.
On February 20, 2006, the Government promulgated Decree No. 19/2006/ND-CP making detailed
provisions for implementation of the Commercial Law with respect to Origin of Goods. Chapter 5 of this
Decree provides for in detail duties and powers of Ministries.
Article 17 Duties and powers of the Ministry of Trade
1.
To formulate and to submit to the competent level to promulgate, or to promulgate in accordance
with its own authority, legal instruments on country of origin of goods.
2.
To organize the issuance of Certificates of origin of export goods; to directly issue or to authorize
the Vietnam Chamber of Commerce and Industry and other organizations to issue Certificates
of origin of goods.
3.
To administer research activities and to engage in international co-operation in the sector of
origin of goods.
4.
To preside over negotiations regarding Rules of Origin of Goods in accordance with international
treaties.
On April 17, 2006, Ministry of Trade issued Circular No. 07/2006/TT-BTM detailing the contents of the
above-mentioned Decree No.19/2006/ND-CP.
However, the customs office of importing countries has to check the authenticity of C/O. Therefore, the
matter is how to control fully certificates of origin issued in Vietnam.
One of the controlling measures that are being strongly taken is operating the system of administering and issuing
electronic certificates of origin. When completed, the system will be an efficient and modern tool for controlling
certificates of origin, enhancing capability of authorized agencies and help promote trade facilitation.
The implementation of the system of administering and issuing electronic certificates of origin also helps
administering agencies have timely and sufficient data of Vietnam exports which serve as grounds for
its negotiations in international trade disputes. In fact, for many years now, we have encountered many
disadvantages in negotiations related to trade disputes between Vietnam and the United States, the
European Union and some other partners owing to insufficiency of exports data.
Ministry of Trade’s plan to provide the service of electronic certificate of origin issuance
Recognizing the importance of certificate of origin and electronic certificate of origin, on March 21,
2006, the Minister of Trade signed Decision No. 0519/QD-BTM approving the plan on administering and
issuing e-certificates of origin (eCoSys for short). The Department of Export – Import and the E-commerce
Department preside and cooperate with other specialized bodies of the Ministry and relevant agencies
to implement the plan.
52
The plan is to help state administering agencies quickly obtain statistics on Vietnam exports, facilitating
state administering activities in the trade sector, particularly negotiations for and settlement of international
trade disputes. Meanwhile, application of information technology will help enterprises reduce input costs,
lower product costs and enhance competitiveness of enterprises and their products. Implementation of
the plan also includes providing online public services on certificates of origin according to Decision No.
222/2005/QD-TTg of the Prime Minister to approve the Master Plan on E-commerce Development for the
2006 – 2010 period.
The goals of the Plan are:
1. Administer centrally certificates of origin issued nationwide, collect statistics on exports quickly and
accurately, helping trade policy formulation better.
2. Help enterprises complete quickly and conveniently procedures related to certificate of origin, thus
help them reduce production costs and improve competitiveness.
3. Accelerate administration reforms in public services provision of Ministry of Trade, solidifying
foundations for online provision of public services.
The eCoSys Plan will be implemented in 3 stages.
Box 2.6 3 implementation stage for electronic issuance of certificate of origin
1. Stage 1: Electronic administering of issued certificates of origin
In Stage 1, the administering procedures will be rebuilt on the basis of applying latest ICT advances.
Origin database will be administered based on concentrated technology. Data of certificates of origin
issued by all Offices of Export-Import Management is transferred to the Integrated Data Center of
Ministry of Trade and subsequently saved and processed at the Center’s servers.
The system will not change operational skills of each Office of Export-Import Management. Software
will be developed to help those Offices manage their work and data more easily and conveniently.
Inputting data daily from issued certificates of origin is the job of Offices of Export-Import
Management.
Data is required to be reliable and safe based on the digital signature technology. Enterprises will
be able to look up information on issued certificates of origin online.
2. Stage 2: Issuing electronic certificate of origin in a narrow scope
2.1. Approach to implementation
In Stage 2 of eCoSys, electronic certificates of origin will be issued in a narrow scope to largesized and prestigious enterprises with large and stable exports turnover. The initial step will be
implemented according to each preferential form, and extended afterwards to other forms including
non-preferential ones.
Narrow-scoped implementation of eCoSys will go on the viewpoint of “post-check”, accordingly
agencies authorized to issue C/O trust enterprises’ declaration, consider enterprises reliable partners
and support enterprises as much as possible. Sanctions will be adopted to mitigate trade frauds and
impose heavy penalties on enterprises deliberately cheating on their origin declaration.
2.2. Appraising enterprises
Enterprises who want to implement electronic C/O have to register some information with C/O
issuing organizations. Any change in previously registered information such as changes in type of
ownership, business scope, production process etc. shall be informed to C/O issuing organizations.
53
2.3. Process
Narrow-scoped implementation of electronic C/O issuance is taken in the following steps:
Step 1: Declaration at enterprises
Enterprises complete electronic declaration forms (eForm for short) themselves on computers at
their offices. Afterwards, enterprises’ leaders electronically signed eForm and send it to the Office of
Export-Import Management.
Step 2: Checking validity
The Office of Export-Import Management checks electronic signatures on eForms, assessing validity
of submitted information. Information on validity or invalidity of eForms is openly posted online for
enterprises to look up and check easily.
Step 3: Issuing C/O at the Office of Export-Import Management
Enterprises have to bring Origin Declaration Form bearing signatures of authorized leaders and
other paper documents to submit to the Office of Export-Import Management. Officials at Offices of
Export-Import Management check consistency between eForm and paper Origin Declaration Form.
If the two are consistent, they will recommend Office leaders to sign and seal the Origin Declaration
Form, and issue C/O to enterprises.
Step 4: Post-check
Checking after issuance of C/O may take place in 2 scenarios:
-
The Office of Export-Import Management will check on probability accuracy of information
electronically declared and signed compared to information in the original paper documents.
-
When informed by importing countries about frauds, the Office of Export-Import Management will
check the whole original paper documents.
In both scenarios, there will be very heavy penalties if frauds discovered.
3. Stage 3: Issuing electronic certificate of origin in broad scope
This stage will be implemented when the General Department of Vietnam Customs has completed
the e-customs declaration system and all enterprises have reached a high level of information
technology application. Every document will be electronically signed and automatically transmitted
to Ministry of Trade. Based on those electronic documents, Ministry of Trade will issue electronic
certificates of origin. Enterprises may print those C/Os themselves or Ministry of Trade will directly
transmitted them via the Internet to importing countries.
In this period, Ministry of Trade will preside over implementation of electronic C/O issuance at
regional Offices of Export-Import Management, Export Processing Zone Management Boards and
Industrial Zone Management Boards. Ministry of Trade will introduce standards for the whole system
of eCoSys to unify state administering and encourage C/O issuing units of Vietnam Chamber of
Commerce and Industry to apply that system.
The situation of eCoSys implementation in 2006 and the plan for 2007
a. The situation of eCoSys implementation in 2006
Effectuating guiding documents on certificate of origin and the eCoSys Project, Ministry of Trade has
finished Stage 1 of the Project. Major results from implementation of Stage 1 are:
-
54
Finish development of eCoSys software for Stage 1, placing a branch on the website of Ministry of
Trade at the address http://ecosys.mot.gov.vn.
Build the MOT-CA system for digital signing and authentication of digital signatures on the system
of eCoSys.
-
-
Establish the system of managing Form-A C/O for footwear exports to EU between Ministry of
Trade and regional Offices of Export-Import Management administered by the Ministry. Starting
from October 01, 2006, Offices of Export-Import Management have the responsibility of updating
online all data about Form-A C/O issued respectively to the eCoSys system every day.
Build standard for exchange of XML electronic data on C/O between Ministry ofTrade and Vietnam Chamber
of Commerce and Industry (VCCI). Starting from October 11, 2006, VCCI began transmit all data on C/O issued by VCCI to Ministry of Trade. All data from VCCI is digitally signed before sent to Ministry of Trade. Data
from VCCI is also checked for authenticity by the system before officially updated to database.
Implementation of eCoSys Stage 1 can be considered relatively successful. Data sent by all units and
organizations has sufficient information on C/O. Particularly, most of goods codes in the data are HS 8digit codes. This is the outcome that wasn’t obtained for long before. This makes statistics on exports
more detailed and accurate. In the long term, relevant agencies will be able to exploit that database for
negotiations on international trade disputes.
b. The plan for 2007
Stage 2 of the eCoSys Project is schedule to start from the second quarter in 2007. Planned contents are
as follows:
-
-
-
Build eCoSys software for Stage 2, including a component on the MOT website to serve management agencies and another component at the Vietnam E-commerce Portal http://www.ecvn.gov.
vn (ECVN) to provide services to enterprises.
Initially allow enterprises to directly fill out forms of the eCoSys system on ECVN to be sent to
Ministry of Trade. Selected enterprises are prestigious ones with large exports turnover and golden
members of ECVN. To participate in the system, enterprises will be issued digital signatures on the
MOT-CA system of Ministry of Trade.
C/O is still issued in paper form.
Ministry of Trade provides information on C/O of enterprises on both MOT website and ECVN website to help enterprises look up information easily.
III. INFORMATION PROVISION AND ONLINE PUBLIC SERVICES ON
PROVICIAL WEBSITES
1.
Overall
1.1.
Number of websites
As of 2006, among total 64 People’s Committees of provinces and centrally-administered cities (provinces
and cities for short), 52 have had operational websites, 11 hasn’t had websites or their websites were out
of function during the survey time (Bac Lieu, Dac Nong, Dien Bien, Dong Thap, Ha Giang, Hai Duong, Hoa
Binh, Khanh Hoa, Lai Chau, Quang Ninh and Son La). The website of Yen Bai province has only an email
system, thus not considered as an operational website.
In 2005, 49 cities and provinces had operational websites.12 That means the quantity of websites of
localities increased trivially in 2006.
12. According to Vietnam e-Government Overview report, through survey of state administration agencies’ websites, Hochiminh Informatics
Association, June 2005, PhD. Pham Thi Bich Hoa.
55
1.2.
Webistes’ interface
Compared to Ministry websites, websites of cities and provinces have, to some extent, more colorful and
diversified display interfaces. Website homepages usually have images featuring each locality such as
images of famous geographic names, production activities of typical professions, and local specialties etc.
Colors of certain pages are well combined, and images, news and articles are reasonably arranged.
However, the overuse of images, banners and flashes that take up most of space on some websites’
homepage has reduced their loading speed and volume of information provided. For instance, the size of
the banners at the top of homepages compared to below information blocks on the websites of Phu Tho
and Thanh Hoa is disproportionate. Some websites’ display of information makes it difficult for viewers
to navigate, for example, too many articles displayed on homepages, disproportionate grouping of
information that makes viewers go through many empty pages to reach needed information. Fonts and
line spacing also affect the efficiency of reading. For example, too little line spacing embarrasses viewers’
eyes, too much line spacing reduces information, and blurry characters due to their light color on a dark
background also make it difficult to read information. On some websites, sometimes there appear font
errors or broken groups of characters when moving on to inner pages.
1.3.
Websites’ features
All city and provincial websites have news sections introducing specific characteristics as well as events
and activities of respective cities or provinces. News is quite rich, comprising articles, brief news, image
news, reports and special reports covering political, economic, social and cultural activities of each city
or province. Most of the websites allow access to data on legal normative documents, administrative
procedure declaration forms issued by central or local authorities, as well as access to data on enterprises
and statistics yearbooks. Forums, Q&A section and survey section are relatively popular on the websites
of cities and provinces. There, questions and answers go into details, raising many problems needed to be
dealt with by administration agencies.
Compared with Ministries’ websites, those of cities and provinces provide more enhancers such as
application download (Vietnamese fonts, anti-virus software, and office software), weather forecast,
gold price, rate of exchange, housing price, office working timetable, railway timetable, flight timetable,
necessary information like local maps, addresses of hotels, restaurants, hospitals and schools, and
emergency phone number etc. Beside instructions on sitemaps, news as per month and date, those
websites started, as a first step, integrating multimedia applications in order to enrich information
such as online television, video, photo library and audio library. For instance, the website of Quang Tri
province broadcasted online video “Outstanding science and technology events of Quang Tri in 2005”,
while the website of Thai Nguyen allows watching online CD “Thai Nguyen – potentials and opportunities
of investment and development”, the website of Vinh Phuc provides photo and music libraries. Some
websites allow sharing information via Really Simple Syndication (RSS) format, like the websites of Hai
Duong and Dong Nai.
56
Table 2.7 Summary of features of 52 operational city and province websites
Search
Feature
Number of websites
Normal
Advanced
23
20
Forum
FAQ, dialogue
Business
Support
12
31
21
Public
services
3
Information on
Locality
Potentials
Investment
Legal documents
Procedure
disclosure
52
50
44
43
35
Feature
Number of websites
Source: E-commerce Department, Ministry of Trade
In addition, city and province websites also initially allow provision of some public services like post and
telecommunications services, electricity and water services, and other public services related to local
departments and agencies, especially Departments of Trade, Departments of Culture and Information,
and Departments of Planning and Investment.
The number of city and province websites with English versions is relatively large. Some even display in 3
languages. That demonstrates activeness of local authorities in establishing relations and inviting foreign
investment.
Table 2.8 Summary of languages used on 52 operational city and province websites
Language
Number of websites
Vietnamese
16
Vietnamese + English
32
Vietnamese + Chinese
1
(Lao Cai)
Multiple languages
3
(Lang Son: Vietnamese, English and Chinese)
(Da Nang: Vietnamese, English and Japanese)
(Thua Thien – Hue: Vietnamese, English and French)
Most of websites have high download speed. However, the fact that homepages of city and province
websites usually have many images of localities affects the access speed of viewers. On some websites
with an introduction page, when clicking the Homepage button on the browser, one is moved back to the
initial introduction page, making users wait for the page to reload, wasting time and causing frustration.
Although website is an effective tool for citizens to look up legal normative documents and administrative
procedures, the capability of search tools on websites is currently low. While looking up documents
and regulations, users are required by some websites to input search field as issuance number or time
of issuance, causing big difficulty for users. Only a few websites allow searching for documents or
information according to key words and also allow searching on subordinate or associate websites, thus
providing more search results and more user-friendly. Table 2.7 shows that the number of websites with
57
an advanced search tool accounts for only 38% of the total number (20 out of total 52 websites). The rest
hasn’t had search tools, or they do have search tools of low capability and hasn’t made use of available
links to websites of departments or agencies to enhance quality and amount of information.
Linkages on city and province websites are abundant, with links to functional bodies of cities and provinces
such as specialized departments and agencies, forming a unified system of useful information. However,
there are a considerable number of broken links from websites of cities and provinces to subordinate
websites.
1.4.
Quality of website contents
The frequency of information updating is one important determinant of a successful website. This
frequency is different across cities and provinces. Most of websites still update information according to
activities or events taking place at respective localities. The websites of major cities are more frequently
updated. Some websites keep information on their homepages for too long, making viewers bored. For
example, on the Ninh Binh province website surveyed on 10 October 2006, the “Headline news” section
still shows articles posted on 26 January and 22 February 2006. In the “Headline news” section of Thai
Nguyen province’s website, some articles were last updated on February 27, 2006.
Regarding reliability of information, because the sources of information are local administration and
media agencies, information is relatively reliable. However, duplicate information is not occasional at all.
2.
Information provision
2.1.
Information provision
In general, information on websites of cities and provinces is provided in 5 main groups as follows:
Group 1. Introduction on the locality: geographic location, natural conditions, climate, famous landscapes
for tourism, population, culture, history, traditions, and places of administration agencies (provincial
districts or town). This is the most abundant and well - displayed information section.
Group 2. Introduction on economic potentials and development of the locality: conditions and potentials
to develop the sectors of industry, agriculture, culture, tourism and services, sector structure, key sectors,
and statistics on contribution of each sector in the local economic structure.
Group 3. Investment information: introducing investment encouraging policies and investment
opportunities at the locality, table of preferential land rents, human resources, investment projects under
implementation and those inviting investors, and local Industrial Parks and Export Processing Zones.
Group 4. Information on legal documents: including legal documents of the Government, Ministries and
localities such as those on land, natural resources, investment, trade and taxes.
Group 5. Business supporting information: facilitating business of enterprises, such as information on
markets, rate of exchange, quality standards, list of local enterprises (name, address, business license,
business scope, current situation).
58
Compared with 2005 statistics from the “E-Government Overview” report by Hochiminh City Computer
Association, the number of websites providing legal documents has increased from 32 to 43. In general,
quality of information provision on websites of cities and provinces has been considerably improved.
2.2.
Online interaction and exchange of information
Apart from providing stationary information, websites start paying attention to interaction and exchange
of information between authorities of cities and provinces and enterprises and citizens.
Surveying websites of cities and provinces showed that interaction between local administration agencies
and enterprises is conducted in simple forms of contact, questions and answers (Q&A), feedback, dialogue,
and online forum etc., creating many favorable conditions in relations of the two sides. The website of
Kien Giang has the section “Chairman’s Mailbox”, while that of Quang Ngai has “Mailbox to receive citizens’
comments” section.
The website of Hochiminh City has two-way interaction between citizens, enterprises and the city’s
authorities at all levels via the section “Dialogue with enterprises”, attracting numerous participants. By
that way, the city’s leaders can learn about worries of people and deal with remaining difficulties, while
enterprises can keep track of the progress of handling their documents.
However, few cities and provinces pay attention to website interactive features. 31 websites don’t
have Forum sections. Among those having forums, only 4 forums operate well with many members
contributing ideas and the forums highly active. Some websites did establish forums but the forums have
few activities. One of the reasons for that inactiveness is that topics raised on the forums are not of public
interest and the authorities remain slow in answering people’s questions via websites. It is not exceptional
that there are only questions and no answers on certain forums. The reason for this lateness is that state
agencies lack specialized officials. In some places, website administrators are officials with additional task
of updating information.
3.
Online public services
3.1. Disclosure of processes, procedures and progress of handling public services on
websites
35 websites have disclosed processes, procedures, documents, processing agencies, time and charges
etc. They also provide many forms for services required to declare according to specified forms. That is the
first simple type of public services provision currently on administration websites.
The websites of Hanoi and Hochiminh City allow following progress of document handling online. This
not only saves time for both state agencies and enterprises but also improve working methods of state
agencies towards a model of modern administration agencies in the future.
Like those two websites of the two largest cities in Vietnam, disclosure of procedures of public services
provision has been conducted at different levels by many websites of other cities and provinces such as
An Giang, Binh Duong, Can Tho, Hai Phong, Da Nang and Dong Nai.
59
3.2.
Online provision of public services
Some websites have provided services of business registration, e-customs declaration, gas station
management, and register for certification of measuring instruments etc.
In terms of online business registration, the leading websites now are those of Hochiminh city, Hanoi
and Da Nang. Users only need declare information in a form, send that information, receive feedback
about document code and keep track of progress. In terms of customs declaration at localities, Da Nang
is one of the cities and provinces who made great efforts to provide this public service via the Internet.
The website of Dong Nai has provided some online services about standards, metrology and quality,
such as register for certification of measuring instruments, management of gas stations, and declaration
of certified products, though they didn’t work when surveyed. The website of Vinh Phuc has the section
“Public Services”, but actually the services of looking up electricity, water or telephone charges are not
considered as public services.
Among cities and provinces having provided public services online, Hochiminh City is regarded as the
leader, not only thanks to a great number of online public services but also because of participation
of class-root level authorities with 22 urban and suburban districts accepting business registration
documents only and 7 allowing registration for construction permits online.
Two typical public services provided online are business licensing and e-customs declaration.
3.2.1. Online business licensing
This is the public service which has been actively provided recently on websites of major cities and
provinces like Hanoi and Hochiminh City. Those websites are the places to help individuals and investors
prepare business registration documents for each type of enterprise such as private business, joint stock
companies or limited liability companies etc. and provide instructions for market participation. Upon
completing business registration documents, individuals and investors may send business registration
information to local Department of Planning and Investment via the Internet to apply for business
licenses. After receipt of business registration information online, the local Department of Planning and
Investment will appraise documents and subsequently inform results to applicants.
For example, on the website of Da Nang:
-
-
If documents are valid, 4 working days after the time Da Nang Department of Planning and
Investment has received valid documents, individuals or investors come to submit original documents at the Receive and Return Unit of the Department and obtain business licenses.
If documents are not valid or improper, the Department of Planning and Investment is to make
detailed instructions for investors to change or modify their documents online.
During the pilot time, initially Da Nang Department of Planning and Investment allows online business
registration for the type of “private enterprise”. After piloting and drawing experience, Da Nang Department
of Planning and Investment will extend the service to other types of enterprise.
3.2.2. E-customs declaration
Implementation of e-customs declaration is a stage in the roadmap for administration reform and customs
modernization, and is based on the amended Customs Law approved by the National Assembly in May
60
2005, at the same time helps gradually reform customs activities towards conformity with standards of
modern customs in the region and the world given the context of Vietnam’s WTO accession.
E-customs procedures are piloted for crude oil exports at Ba Ria – Vung Tau Customs Department, for
seagoing vessels entering and exiting Da Nang, Hai Phong or Hochiminh City. However, as surveyed in
reality, only the website of Da Nang Customs Department www.dngcustoms.gov.vn allows enterprises
to declare customs procedures on the website. Hai Phong Customs and Hochiminh City Customs
process e-customs procedures by using their own software directly connected to enterprises instead
of using their websites.
Model and process of e-customs declaration
Customs procedures are processed by electronic means via the e-customs data processing system. Ecustoms documents assure completeness, standard form and legal validity like paper customs documents.
The customs agency processes customs procedures on the basis of e-customs documents submitted
by enterprises, makes clearance decision on the basis of e-customs documents declared by enterprises,
and decides customs inspection based on results of data processing from customs database and other
sources of information. Computers will automatically classify declarations into channels (green, yellow,
red), then the customs agency approves the classification and announce declaration form code for
enterprises to print out and bring to port border-gates where export and import goods are completing
customs clearance.
Figure 2.1 Model of e-customs operation
E-Customs
Receive export-import declarations of
enterprises, verify e-signatures, decipher data,
check declared information and issue number
of declaration, and classify declarations.
After classification, the system will send notice
of instruction to enterprises.
Use GVNET to communicate with enterprises
Enterprises use the declaration program to fill out export-import declaration forms and other documents
such as value declaration, bill of lading, certificate of origin, license etc. Data will be enciphered and sent
to GVNET Center via the Internet.
The Center receives e-customs declaration documents from enterprises such as export-import declaration
form, attached documents, receives electronic documents related to liquidation of declarations for types
of export processing and production etc. and subsequently check and verify documents and send them
to the e-customs unit.
61
The customs agency receives electronic documents of enterprises, uses program to classify declarations,
makes instructions, and calculates tax payments etc. for export-import declaration of enterprises.
Information about progress of processing enterprises’ declarations will be sent back by the customs
agency to the GVNET center, and subsequently sent to enterprises.
-
For declarations classified into Green channel: enterprises print their declarations into 2 copies and
bring them to border-gate customs to get their goods.
For declarations classified into Yellow channel: inspect paper documentation under customs
dossiers.
For declarations classified into Red channel: inspect paper documentation under customs dossiers
and the goods themselves.
Regarding e-customs clearance and e-customs procedures, enterprises may look for other information
on shipments classified in Green channel.
Efficiency and ability to interact with enterprises
E-customs procedures have brought about many benefits for both enterprises and customs agency. With
simple procedures, fast clearance, little use of paper documentation, limited contact between customs
officers and enterprises, and less inconvenience, harassment and corruption, this public service helps
enterprises save time, costs, manpower and increase turnover and profits, while assuring disclosure,
transparency, equity, and better administration efficiency of customs agency.
The pilot model of e-customs declaration at the E-customs Sub-Departments of Haiphong and Hochiminh
City has, after one year of implementation, shown initial successes. E-customs declaration helps save
considerable time compared to normal export-import procedures. As calculated by the customs, if
previously it took export goods 4 hours and import goods 6 hours, now with e-customs declaration, all
the procedures are done with computers within a few minutes. At the same time, e-customs clearance
helps reduce costs, mitigate corrupt behaviors of customs officers and enterprises, and bring about
encouraging outcomes for the administration reforms of the customs agency.
As of October 3, 2006, the E-customs Sub-department of Hochiminh Customs Department had processed
12,953 export-import declarations, with a total turnover of US$ 1.13 billion, of which 10,294 were import
declarations and 2,659 were export declarations. Currently, there have been 92 enterprises granted
licenses to participate in e-customs procedures and 77 of them have actually participated. Tax turnover
reached 1,219 billion dong. Average processing time is 5 to 10 minutes for Green channel declarations, 20
to 30 minutes for Yellow channel declarations and 1 to 2 hours for Red channel declarations. Compared
with traditional (manual) customs procedures, e-customs processing time per shipment is about 4 to 8
hours less.
Statistics collected by the E-customs Sub-department over the past time show that most of indicators have
seen considerable improvements. For example, the number of declarations for e-customs procedures is
about 50 per day on average, and this figure increases by an average of 10% every month, export-import
turnover increases by an average of 11.5% per month, the number of enterprises participating in ecustoms procedures increases by 11% a month, and tax turnover collected for the State Budget averages
100 billion dong per month.
62
Table 2.9 Some statistics about e-customs procedures
Contents
Growth rate (%)
Growth of the number of declarations
10%
Export-import turnover’s average growth
11.5%
The number of enterprises participating in e-customs procedures
11%
Average tax collections for State Budget
100 billion dong per month
The average number of declarations
50 per day
Source: http://www.customs.gov.vn/Default.aspx?tabid=1&mid=520&ItemID=2784
However, according to enterprises selected for piloting e-customs declaration over the past time, while ecustoms declaration has shown many positive aspects, e-customs procedure process remain incomplete.
For example, in many cases, enterprises still had to go directly to border-gates to fulfill customs clearance
procedures. That became more inconvenient and time-consuming if their shipments were unexpectedly
inspected.
Along with online declaration as mentioned above, enterprises still had to send documentation with
information already declared in e-customs to E-customs Sub-departments where they registered for
e-customs participation. Afterwards, enterprises had to wait and perform instructions by the customs,
modify contents as requested by the customs, and print 02 copies of the e-customs declaration form to
submit to the customs agency.
For shipments which e-customs sub-departments have accepted electronically-declared information and
cleared, enterprises continue to bring e-customs declaration forms to the supervision unit of the bordergate customs sub-department to get their shipment cleared.
For shipments which e-customs sub-departments required submission of paper documentation under
customs dossiers before clearance, enterprises have to submit or show printed declaration form along
with other paper documents under customs dossiers to e-customs sub-departments and show their
goods to border-gate customs sub-departments to inspect as required.
For export and import goods named in the list of goods subject to conditional import and/or export,
enterprises have to submit or show permits or written permission documents.
Surveying opinions of 109 out of 200 enterprises implementing e-customs procedures in the area
of Hochiminh City over the past time shows that the majority express “good” comments (65.8%) and
“very good” comments (22.7%). 86.2% of the enterprises said that e-customs procedures are better
than traditional customs procedures. However, at present the number of enterprises participating in
e-customs procedures remains modest for many reasons. The main reasons are, among others, that ecustoms procedures currently allow too few types of enterprises to participate in, participation conditions
are stricter than those of traditional customs procedures, enterprises have been familiar with traditional
procedures and don’t want any changes, and information on e-customs procedures is still limited.
63
Proposed solutions to improve quality of e-customs procedures service
The current process of e-customs procedures need changing towards applying for more export-import
types such as processing, temporary import and re-export etc., more types of enterprises and broadening
area of operation of e-customs procedures.
The e-customs data processing system of the customs agency needs to be improved and upgraded to be
capable of automatically processing declarations, facilitating receipt and processing of declarations when
the number of participating enterprises and the number of declarations both increase.
The ICT system needs to be upgraded and deployed to points of receipt and processing at border-gate
customs sub-departments who supervise and inspect import-export goods so that they can do their job
more easily, more continuously and faster, facilitating clearance of goods for enterprises.
To improve transparency and convenience, complete digitalization is needed. However, universalizing
the e-customs model across the country will encounter a difficulty which is the unevenness between the
IT infrastructure of the customs and that of enterprises.
Establishing and developing e-customs procedures is an important task of the Vietnam customs in its
development and modernization strategy. However, for e-customs procedures to develop rapidly and
towards its set goals, in addition to the customs’ own efforts, the State needs accelerate implementation
of e-Government, Ministries need cooperate with the customs in building e-Government and enterprises
need participate actively in e-commerce and e-customs procedures. Only when those are fulfilled will ecustoms procedures be able to develop evenly and steadily.
Some issues related to the e-customs clearance model, the organization model to implement expansion
of e-customs procedures, inspection machines and equipment, promulgation of a decree on e-customs
procedures, and building and developing human resources etc. also need to be quickly addressed to
improve and develop e-customs procedures in the future.
64
CHAPTER 3
EMERGING
ONLINE SERVICE
BUSINESSES
CHAPTER 3
EMERGING ONLINE
SERVICE BUSINESSES
I.
BACKGROUND
Year 2006 has witnessed the development of a variety of online business services, all of which belong to
the digital content industry. Global revenue from this industry is estimated to reach USD 460 billion in
2006 with the average growth rate of 30% per year,13 mostly from developed countries such as America,
Japan, Korea and the EU.
In Vietnam, the online service businesses have been formed and gradually expanded. In 2005, the total
revenue for content development in Internet, mobile networks, electronic games, online education, ehealth, digital data, videos and multi-media was approximately USD 76 million which is limited in the
world competition, but is potentially appreciated in this integration context.14
1.
New direction for businesses
In the past five years, the online-service businesses have been blooming in the world, especially in the
countries with the developed technology and infrastructure. In Vietnam, this kind took shape from the
1900s but there has been a considerable improvement in two recent years. The global technology has
increasingly recovered, at present, and strongly grown. Favorably situated in the most active area in the
world, Vietnam is well positioned to gain from technology achievements in this industry. In addition, the
increased number of Internet users has facilitated domestic enterprises in conducting business in the
most potential fields.
Many of domestic enterprises seem to be keen on the approach and exploitation of this new business.
Basing on the preliminary statistics by Markom Group, a research and consultation company, there are
13. Source: Presentation of Industry and IT Dept. at the Conference of Vietnam Digital Content Industry Development Program until 2010
– Ministry of Post and Telecommunications.
14. Source: Detailed Vietnam Digital Content Industry Development Program until 2010– Ministry of Post and Telecommunications October 2006.
67
about 200 enterprises, a majority of which have just been established and also new participants in this
field, doing business in online service business. They mainly locate in the two biggest cities – Ha Noi and
Ho Chi Minh City. These enterprises are divided into 3 categories: 1-3 years, 3-5 years and over 6 years,
among which the first is of the highest rate (approximately 40%). This situation shows online service
business has just started, and really paved a new way for the domestic ones.
For a new business direction, enterprises have to cope with many difficulties, one of which is fierce
competition with other rivals in the area, especially the Chinese ones in the attraction of investment
resources. Incomplete legal environment, weak human resources, and low Internet quality but high costs
are obstacles to the businesses in such a new field. In addition, domestic and foreign investment resources
are not as effective as the businesses’ desires. Despite these challenges, domestic enterprises have been
exploiting the advantages from the new online service business thanks to self-motivation and attraction
from its sustained benefits.
2.
Eventful but unbalanced development
It tends to be a sharp increase in the number of enterprises and the total revenue from online service
business. However, this rate is remarkably different in each type.
Figure 3.1 Number of participants and revenue from some online services
Revenue (billion VND)
Number of businesses
Internet
content
Cellphone
content
Electronic
games
Online
Education
Digital
videos
Source: Survey on Digital Content Industry Vietnam 2006 - Markcom Research and Consultation Company
There are 2 groups of online services, including newly established (first group) and developing ones
with the stable speed (second group). The figure 3.1 shows that some of the most developed kinds are
e-newspapers (in Internet content field), cell phone network content and online entertainment. In the
balance of the number of enterprises and revenues, cell phone network content and online game are the
most fruitful ones potentially.
In terms of development trends, although most of online games are currently purchased the copyright
for domestic game development, some enterprises paid attention to design and offer some domestic
game in 2006. Users’ interest on the content service for mobile networks has been still at high level.
There has been a rapid increase not only in the number but also in the quality of messages downloading
68
wallpapers, logo, and music. The interest also is shown through the number of users and number of
people with payment-readiness.
Figure 3.2 The rate of users and paid users in some online services
90%
80%
70%
60%
50%
Users
40%
Paid users
30%
20%
10%
0%
Internet
content
Cellphone
content
Electronic games
Note: This rate is calculated as percentage of people who use at least one kind of digital content services.
Source: Detailed Draft of Vietnam Digital Content Industry Development Program towards 2010 – Ministry of Post and Telecommunications, October 2006
Compared with the others, online advertising, online education, online music and video are categorized
into the first group – newly established. The number of enterprises as well as revenue from this business
is still rather low as compared to the other online service sectors, due to limitation on technological
investment, scale of business, and lack of long-term development also. However, in the current trendy
development, enterprises’ efforts are good signals generally for the whole field.
The establishment of more and more websites for online music and television is regarded as a positive
movement in spite of modest investment and low revenues as compared with other businesses. Online
education has received increasing attention from enterprises and end-users. Consequently, many firms
and universities have added this form of training into their business strategies. Vietnam is recommended
by Motorola’s specialists to focus on online education which will indispensably bring great benefits for
the whole society in a near future.
3.
Orientation of development
Online service is not only of high intelligence and great profits but also a momentum and means to foster
the process to an information society and knowledge-based economy. As a result, the state authorities
are to set clear views for the development of these services for the coming time.
Online education, online advertising, online entertainment, e-newspaper and mobile networks content
are all component of a new industry – the digital content industry. The “Vietnam Digital Content Industry
Development Program towards 2010” drafted by the Government presents great interests of the State
on such industry. The Development Program specifies measures to boost the industry in the domestic
market, of which the legal system, mechanism for market and product development, and business
support policies are of particular priority.
69
II.
ONLINE ADVERTISEMENT
With rapid growth of the Internet, the use of electronic means as an added advertisement channel has
become more and more popular among enterprises, which is viewed as an indispensable strategic move
in the ICT era.
1.
The establishment of online advertisement
In 2006, online advertisement market seems to have been outwardly dormant, however, inward are a
series of firms’ movements in the industry.
Most noteworthy were foreign companies’ strategic move to access the market. Large firms such as Yahoo!
and Google are preparing to penetrate the online advertisement market in Vietnam. Both have provided
Vietnamese-language services with the aim to increase number of Vietnamese users, hence to attract
Vietnamese businesses to use their online advertisement services that target this market segment. The
appearance of S-Fone and Diana-Bobby ads banners on Yahoo Messenger Windows have been the first
outcome of this strategy, showing that the online advertisement market in Vietnam is of great potential
to domestic and foreign advertising companies.
Together with international competitors, domestic businesses have also demonstrated remarkable progress.
A majority of websites in Vietnam offer online advertising services. Moreover, there has been a rise in the
number of enterprises providing news websites (e- newspapers) with online advertisement service, from
which they gain significant revenues. In addition, the variety of online advertisement services has helped
enterprises to select the service that best suits their demand. The most popular now, which is to set banners
on webpages, offers a wide range of choice for different banner forms and different prices.
Table 3.1 Some major news websites for online advertisement services
No.
Name
Addresses
1
VnExpress
http://vnexpress.net
2
VietnamNet
www.vnn.vn
3
Youth newspaper
www.thanhnien.com.vn
4
Dantri Paper
www.dantri.com
5
Labour newspaper
www.laodong.com.vn
6
Vn Media online newspaper
www.vnmedia.com.vn
7
Star
http://ngoisao.net
8
Online Advertising JSC.
www.24h.com.vn
9
VTC
www.vtc.com.vn
In America, Japan and Europe, where both e-commerce and technology are most advanced, traditional
and online advertising have been in parallel growth. In Vietnam, the most popular are advertising on
television and newspapers. Basing on people’s living standard as well as their consumption pattern, it
is recognized that the former will still play a key role in the near future, gaining the highest revenues in
advertising market while the latter has to cope with some difficulties, especially in direct competition
70
with online advertising with benefits in terms of space and time. As a result, there’s been increasing
competition between thes two types of advertisment along with the development of Internet and online
services. Despite its expansion, both are supplementary to each other and contritbute to the overall
development of the domestic advertisement industry.
2.
Currently low turnover but high potential
High speed Internet (ADSL) is becoming more and more popular as the online advertising market is on
the movement. However, the revenues that websites and e-newspapers gain from advertising are still at
low level.
There have been several websites in Vietnam attracting vast online advertisement activities, which mainly
are popular e-newspapers such as VnExpress, VietnamNet, Youth, and some other news websites like
24h.com.vn. The most frequent and big-value clients of those advertisement services are multinational
companies, for examples Ford, Toyota, Nokia, Samsung, LG or big telecommunications corporations like
VNPT, Viettel, and S-Fone. Along with market diversification as well as ever-rising demand, the number of
domestic enterprises, especially small and medium size ones, participating in online advertisement will
soon increase.
Revenue from online advertisement in 2006 was estimated to account for about 1.2% of the whole
advertisement industry, and the portion is expected to reach 1.8-2.0% by 2007. With the trend of enewspapers and online services, the online advertising market will grow by 70-100% per year.15 “The year
2006 is the most important for online advertising”, said General Director of AC Nielsen Company, “in the
next 5-10 years, its market will grow to as many times as its present size.”16
VietnamNet and VnExpress, the currently two biggest Vietnamese language e-newspapers, reported
mounting annual revenue from online advertisement, especially in the two recent years. VietnamNet’s
online advertisement revenue, not including the special and supplement edition, was VND 3.8 billion in
2004, 4.35 billion in 2005 and estimatedly 4.6 billion in 2006. Vnexpress’ revenue from online advertisement
was VND 11.1 billion in 2004, 20.25 billion in 2005 and estimatedly 31.7 billion in 2006, a three-fold increase
on 2004’s figure. This is a mighty sum even as compared to major traditional newspapers and magazines.
Billion VND
Figure 3.3 Revenues from online advertising of Vnexpress and Vietnamnet
Vnexpress
VNN
2004
2005
2006 (estimated)
Source: PC World Vietnam, series B, No. 11/2005
15. Investment Brigde Magazine, 19th issue dated 1 Oct. 2006, pg 50-51.
16. Ditto.
71
The soaring number of Vietnam’s Internet users has resulted in increased importance of online advertising,
which also fits with the world’s common trend. In 2005, according to AC Nielsen’s Netratings, 627 million
people worldwide purchased from the Internet, showing the rising influence of online advertising.
However, this market’s high potential was still to be explored by domestic businesses to turn potential
to actual profits. At the same time, client diversification should also be another goal the long term
development strategy of enterprises in this industry.
Despite currently low revenues and limited government management capacity, online advertising is
expected to become popular in Vietnam in the next years.
III.
ONLINE ENTERTAINMENT
1.
Online games
1.1.
Legal framework
The starting point for online games in Vietnam was the beginning of year 2003 when unlicensed
versions of MU games became a phenomenon among the young. In 2005, large companies such as FPT,
Vinagame, and VTC Games started to purchase copyrights for their foreign-origin games, mainly from
Korea and China. According to Industry and Information Technology Department, Ministry of Post and
Telecommunications, FPT’s revenue from online games in 2005 was USD 5 million while VASC gained USD
2 million. The industry’s total revenue in 2006 was estimated to reach USD 10-15 million, with increasingly
professional service and games development. Nevertheless, like other developing markets in Asia-Pacific,
despite being highly appreciated of growth, Vietnam online games industry has faced many initial
difficulties before settling into stable development.
On June 6th 2006, the Joint Circular on Online Game Management drafted by Ministry of Culture and
Information, Ministry of Post and Telecommunications and Ministry of Security was issued in order to
regulate online games production, service supply and service consumption in Vietnam. The Circular
stipulates detailed rules of service supply as well as responsibilities of each participant in online games.
The issuance of this legal document has made the first component of legislation framework for online
games. Nonetheless, while its influence on gamers was quite ambiguous, this Circular has produced some
difficulties for service suppliers.
The greatest difficulty is the requirement that service providers make technical adjustments to the games
so that players are subject to the “limited time” and “diminishing bonus point” rules. Enterprises have to
deal with foreign partners in compliance with the legislation for time adjustment which is infeasible and
inefficient to players. To evade the regulation, switching to foreign server is another option that players
often opted for, which placed Vietnamese enterprises on even greater disadvantage, especially when
Vietnam officially joined the WTO.
Beside the question of feasibility and efficiency, the technical requirements were said to raise a big obstacle
for domestic games service providers. They met certain difficulties in providing the authorities with full
technical documents and certificates as required. Thus, in 2006, Ho Chi Minh Post and Telecommunications
Department has penalized 6 companies and ceased the operation of 13 online games due to lack of
documents certifying technical conditions as regulated in Item 2, Article 7 of this Circular.
72
Nonetheless, the issuance of Circular No.60 has helped to increase enterprises’ confidence in planning
their business strategies, which is a good drive for the development of online games in Vietnam. However,
some regulations in this Circular need to be adjusted for better fit with business reality and to encourage
the development of the domestic online games industry.
1.2.
Increased number of online games and providers
While the Vietnam E-commerce Report 2005 listed only 5 service providers in the online games sector, the
number has doubled to 10 in 2006, who mainly locate in Hanoi and Ho Chi Minh City. This rapid increase
of service providers reflects ever-rising demand of the market.
Table 3.2 Market allocation of electronic games businesses
Province/City
Number of enterprises in each area
The proportion of total number of enterprises
Ho Chi Minh City
19
90.5%
Hanoi
13
61.9%
Danang
5
23.8%
Can Tho
1
4.78%
Others
1
4.76%
Total
21
Source: Detailed Draft of Vietnam Digital Content Industry Development Program towards 2010 – Ministry of Post and Telecommunication, October 2006.
As players’ tastes in any market change along time, every game will last from 2 to 3 years in a market
segment. Ability of suppliers to adapt with such rapid changes is, therefore, essential to their survival
and growth. Aware of this rule, domestic enterprises always try to launch new games or continuously
update currents games to attract more participants. These positive changes in the market of online game
describe the high rate of its growth.
73
Table 3.3 Some most popular online games
No.
Websites
Company
1
VinaGame
http://volam.com.vn
www.rovietnam.com.vn
www.cuulong.com.vn
2
FPT Telecom
http://muonline.vn
www.ptv.com.vn
3
VASC
www.ryl.com.vn
4
Hanoi Telecom Company
www.khan.com.vn
5
VDC Net2E
6
VDC2
7
Asiasoft Co.
www.gunbound.net.vn http://hiepkhach.net.vn
www.tsonline.net.vn
8
Quang Minh D.E.C Company
www.ryl.com.vn
9
VTC Game
http://caoboi.vtc.vn
http://au.vtc.vn
www.silkroad.com.vn
The most noteworthy trend in 2006 was the appearance of online games by the developing enterprises.
The Vietgames Prize, announced for the first time in 2006 by VINASA (Vietnam Software Association), has
established strong motivation for domestic programmers in research and development of new games.
10 products including games for mobile phones have been nominated for this Prize in 2006. The content
and duration of Vietnamese games were yet to compete with foreign games, but the design and graphics
were highly appreciated.
According to VINASA, the most important goal of the development strategy for domestic online game
market is to attain the number of 83 game producers, each of which has at least one game in the market
with the revenue of USD 1 billion by 2010. Accordingly, Vietnam will at least gain USD 83 million from
domestic games in the year of 2006 when these games will account for 25% of the market share. At
present, about 10 companies and 300 people are developing online games in Vietnam.
According to statistics by Markcom Consultant and Research Company, among online service businesses,
online games is the most highly rated in terms of continual improvement, increased quality and the
capacity of technology absorption (76.25/ 100 points).17 These factors will foster online game development
in the coming time.
2.
Online television and music
Online television and music services have been established and started to develop alongside technology
advances. This business currently receives great interests of investor. In a recent survey by Markom
17. The criteria is evaluated on the point of hundred.
74
Consultant and Research Company, online music-video and broadcast get much public approval with
high score rate (72.50/100 points), showing the high level of public interest. However, the index of the
business behavior, compared with the competitors, also in the world market, is still low. This explains why
the enterprises in this field just offer free services. This period is considered to be a premise for collecting
fee and making profits for firms.
2.1.
Large firms launched online television services
Nowadays, along with the development of Internet, it’s common to view online television programs,
without any limits on distance and time. Internet television service can store information like a virtual
library for easier search and references. Internet television is not a new concept to the world, but in
Vietnam this has been a recent phenomenon which was deemed big progress by the broadcasting
industry and consumers. Thus, most online TV channels are currently provided without charges, so that
the new technology can be introduced to as large a population as possible.
Table 3.4 Some online broadcast channels
No.
1
Addresses
www.vnntelevision.net
Enterprises
Contents
VDC
Provide all the contents of programs on VTV
including video clips on: documentaries,
economics, sports, entertainment, children
program, v.v..
2
www.vtc.com.vn
VTC Communication
JSC.
- Video clips of Vietnam Television, Hanoi;
- Online broadcast
- Audio as request
- Online Broadcast of VTV3, VTV4, HTV9 and
Hanoi Television
3
www.htv.com.vn/truyenhinh
Ho Chi Minh Television
Consist of most broadcasted programs on
HTV
4
www.tv.vietnamnet.vn
Software and
Communication VASC
News, documentaries and entertainment
programs
Online television is considered a revolution in mass media. In addition to the ability to interact with
viewers and allow customization of content, it also enables worldwide coverage. Another advantage over
traditional broadcast is that online television does not require huge investment in infrastructure. Internet
can take use of fixed telephone networks to connect ADSL which is the most useful means of updating
information.
2.2.
Online music-video developed in more professional manner
For online service providers, intellectual property products are the main asset and thus play an important
role in their existence and development. As can be seen from reality, copyrights in Vietnam are still “loose”,
the abuse of intellectual products are rather common. Thus, the introduction of online music and video
75
websites complying with copyrights law is a positive move that should be acknowledged and encouraged.
Following are 3 such websites:
-
-
-
soncamedia.com: the first online music website that entered a copyright purchase agreement with
the Copyright Center for Vietnamese Composers. Each day a new and popular song will be selected
and post on the website for music lovers to listen and download to personal computers. Sonca will
purchase the copyrights of Vietnamese songs in 3 years (about 1,095 songs).
http://nhacso.net (of FPT Telecommunications Company): also entered copyright agreement with
the Copyright Center for Vietnamese Composers. This is a large scale online music system including
copyright songs of more than 700 musicians and also linking with other websites in the country as
well as in the world. It is expected that for the time to come, the website will offer download service
and collect fees through advanced payment card or credit card.
http://tv.fpt.net (of FPT Company): provides 300 free copyright films for ADSL users since July 15th
2006. After the trial period, the “Video on Demand” service will officially be provided for charges. At
present, only ADSL service users of FPT can view films on this website.
The above websites that provide copyright music and video are still a small number as compared to
the 20 currently operational websites. However, this shows initial progress in domestic enterprises’
awareness of “copyrights” or intellectual property issues in online service business. The Copyright Center
for Vietnamese Composers hopes that the situation in a majority of domestic businesses will be much
improved a near future.
IV.
ONLINE EDUCATION
1.
Background
Online education helps to change students’ approach method. Participating in online education; students
can stay in a place to take a course at any time and anywhere.
Online education is the new method in Vietnam but attracts many students, learners and other participants.
Some individuals and organizations are trying to disseminate this form. Universities begin to carry out
online education for regular and in-service training. Enterprises also take part in such business to meet
the public requirements.
1.1.
Advantages and disadvantages of online education business
According to a survey by the E-commerce Department, Ministry of Trade, many organizations that provide
online education services list the advantages of this training form as follows:
-
Students can be in class at any time and anywhere with only a Internet-accessed computer, an
email address, an ear phone and a micro;
Lecturers have great flexibility in choosing lecturing location;
The training center doesn’t need to prepare the studying place;
Students, regardless of distance, can have access to specialists in the field;
Cost may be cut down.
However, there are some disadvantages that need to be overcome such as:
-
76
Vietnamese lectures have little experience in online education because they are not used to interacting with students through computers, etc. Moreover, in this form of training, students often
-
give more questions, requiring lecturers to have the skill of simultaneously listening and viewing
various widows for effective communication;
Internet access is low and English is still an obstacle;
Discipline is also a concern as lecturers have little control over students in online education;
The curriculum will need a lot of improvement. Lecturers should be more active in power point
skill, lectures must adjusted to contain more illustrations, short movies, sound effects, etc;
Duration of a lecture is limited.
1.2. Benefits of online education
If overcoming these above difficulties, online education will become an effective tool with the main
following benefits:
-
2.
New studying opportunity for students: they can approach the updated programs in the world and
choose the most suitable course, time and method;
New studying opportunities for working people;
New studying environment for teachers: they can update, complement course books and teaching
documents;
A tool for organizations, enterprises to train employees: save costs. In addition, with e-learning
portal, they can manage plans, targets, quality and efficiency of the training;
Quick approach to new course book, new knowledge: save human resources and access international requirements.
Direction of development
The survey by Industry and Information Technology Department, Ministry of Post and Telecommunications,
reveals that over 50 companies register doing business in e- learning, of which 30 websites are providing
education services.
-
E-learning portal of Ministry of Education and Training
Some universities’ websites
Some websites of few services suppliers
The major products and services supplied are:
-
Online lectures, studying documents
Training for university’s entry, English exam
Studying as well as playing program for elementary pupils
Exercises for pupils at different levels
2.1. Universities with online education
Basing on a survey conducted by E-commerce Department, Ministry of Trade at some universities, some
striking characteristics are concluded as follows:
-
General development: there’s a significant improvement in online training courses in terms of both
quantity and quality. Besides, it’s an important tool aiding the traditional training as well as to facilitate students more opportunities.
77
Online education appeared first in Vietnam in 2001 and during five recent years, this kind has gained
some significant results. At present, besides Hanoi Open Universities, the leader, some others began to
carry out online education such as Technology University under Hanoi National University and National
Economics University. The two others are Post and Telecommunication Institute and Da Nang University
who actively have carried out online education.
In November 2004, an online education port designed on Web conferencing by the Information Center,
Ministry of Education and Training, was officially built at http://el.edu.net.vn. This gate provides universities
technology and some online education samples for references. Until now, there have been nearly ten
universities using this system such as National University, Teaching University, Da nang University, etc. Its
frequency is trials to support students in traditional ways. For example, students can prepare in advance the
subject, contents through their university’s websites. Also, they can share resources, samples or exercises
on the Internet. Despite the inefficiencies, this signals the authorities’ attention to online education.
- Forms: the majority of courses are still semi-online, but the percentages of online time and online
subjects are increasing.
As for these programs, administrative procedures such as registration and fee payment are conducted in
traditional way due to lack of supporting tools like online payment and digital signatures. Thus, there have
been some difficulties in managing a complete online course from administrative to teaching phases.
Moreover, learners are yet to get acquainted with fully online courses. As a result, semi- online education
meets these above requirements. However, in long term, fully online education can be applied when
technology and other support services have been improved together with changes in learners’ habits.
- Levels: not only limited to certificate training but also extended to regular and in-service training as well.
Most businesses start online education with short term courses, which is safe and also helps to define the
demand and gain experience in implementing more complex long term courses afterwards. Moreover,
certificate training courses are easy to promote, attracting many students for regular courses that follow.
Until now, this strategy shows its strengths in bringing great benefits for education centers. For instance,
the Center for Continuous Training of Da Nang University is a sample for the movement of training level.
In 2005, the Center only applied online education for certificate program but it has expanded to official
Bachelor of Interpretation since September 2006.
- Economic efficiency: this helps to increase firms’ revenues. Its share of revenues has been on the rise as a
result of a variety of training programs and increasing numbers of students.
Online training programs are considered to be strategic move, “taking a short cut to be the first” in the
future. Despite current low return on investment, online education will yield more profits and play an
important role in universities’ development plans when demand rises.
78
Box 3.1 Economic efficiency from online education in the Post and Telecommunications Institute
Since November 2005, the Post and Telecommunications Institute officially carried out sample
online education at the website www.e-ptit.edu.vn. This program consists of Bachelor and Certificate
Program.
The tuition for these programs will be added up in students’ annual tuition. Only in 2006, the
revenues from these tuitions are estimated to account for 25% of the total with 625 million dongs
which increased by 250% compared with the previous year. This is a good signal for the Institute
and shows its attraction in the booming of Internet.
Now, the Institute is carrying out the online education projects including the one approved by the
Post and Telecommunication Corporation, under Project 164 (basing on Decision No. 164/2005
on July 04th 2005 of the Government) regarding with infrastructure, content development and
online training organization. Moreover, due to training scale with the trend to combine, replace the
traditional training methods by online education, the Institute will gain considerable achievements
in the field of online education, fostering Vietnamese education in the compliance with the world.
Source: Post and telecommunications Institute Report 2006
- Difficulties:
-
Little support from state authorities;
Insufficient infrastructure and equipments;
Limited information technology application;
Lack of lecturers and resources for online education courses;
Low social awareness and incompetence of learners.
It can be seen in some online training businesses that online training has high benefits and need to be
rightly oriented to go further.
2.2.
Enterprises with online education
According to a survey of online service providers by the E-commerce Department, an overview of Vietnam
online education business is sketched as followed:
- Increased number of market participants.
The most popular online courses provided by education service businesses currently are English and
Informatics, mainly because these two attract the most students. Due to the nature of these subjects
that suits self-learning and builds on interactive exercise, students find online education more interesting
than the traditional approach. Thanks to supports of sounds, images system, English skills as well as high
practicing requirements of Informatics are all flexibly applied and it helps to stimulate learners.
The following table is the list of websites offering online education:
79
Table 3.5 List of typical online training websites
Technology
http://el.edu.net.vn
http://el.edu.net.vn/lms
www.vietphotoshop.com
www.e-ptit.edu. www.huukhang.com
www.fithou.edu.vn
Foreign languages
http://hocngoaingu.com
http://globaledu.com.vn
www.elearning.com.vn
www.cleverlearn.com
www.hp-vietnam.com
Other fields
www.ephysicsvn.com
www.issad.biz.
www.eduport.com.vn
www.dbavn.com/elearning/index.php
- Diversified organizational form:
Besides single-entity businesses like Global Education Company and MEC School, there are also joint
ventures between companies or projects to provide online education service which contribute to
diversify the market. VnDG Virtual Campus is a joint project of Vietnam Development Portal and German
Human Resource Development Organization. Netpro Institute also cooperates with Vietnam Chamber of
Commerce and Industry (VCCI) to provide online courses.
Box 3.2 An example of online education
Netpro Institute in collaboration with Vietnam Chamber of Commerce and Industry (VCCI) carried
out the program “Supporting enterprises to apply information technology aiming at integration
and development of the period 2005-2010”( Project 191) including many fields such as technology
management– CIO, ERP, application skills for small and medium-sized enterprises, e-commerce and
its application in firms, economics integration.
In the coming time, Netpro will hold some new courses in the form of online studying for small
and medium-sized enterprises who need to train employees; internal training for large companies
with many branches in the country; and the ones with foreign lecturers aiming at knowlegde
accessment.
Source: Report of Netpro Institute 2006
- Besides a few enterprises taking free trials, many others started considering this a business that yields profits.
Students’ rising demands is one of the factores that encourage enterprises to provide free online courses.
In these institutions, a majoirty of students are working adults, leading to difficluties in full particpation.
Thus, online education is a good solution for both the institution and students.
80
Box 3.3 Online English training
Since January 2005, Global Education Limited Company who is the partner of American, Canada
and English Global Education Corporation, specializing in international languages to provide online
English lecture at www.hocngoaingu.com và www.globaledu.com.vn. In the first month, only one
learner registered but then the numbers of students have quickly risen. At the end of the first quarter,
there were 200 registers; and at the end of second quarter, this number rose to 600 people; and
third quarter, this number was 1000 people. Accodring to Mr. Nguyen Danh Huy, Global Education
Director, this online program is purchased from foreign company (Q-Group) but re-designed to best
suit Vietnamese learners. The software was designed by the company itself, thus tuition for these
courses is quite low. In technical term, the program is simply designed (low-tech) and accessible
even with dial-up Internet connection.
Following the success of English training programs in past two years, at the end of September
2006, the company launched the Pro-Card Online – the first program training Specialized English
through Internet in Vietnam. After the press conference on 25 September 2006, the program has
attracted high interest from people nation-wide. Until 28 September 2006, there were more than
300 customers purchasing this kind of card.
Source:http://www.globaledu.com.vn/vietnam/show_page.php?pageID=displayInfo&ID=1159479
959&nop=&type=N
According to the survey on competitiveness of domestic enterprises in online service business by
Consultation and Research Markcom Company, online education service recieves high public approval
( 95/100 points) and also has great commercial protential with 65/100 points. However, Vietnamese
enterprises’ competitiveness remains low compared to other competirors in the world. Indicators of
quality improvement and business strategic pursuit were lagging around 30/100 points. Therefore, in
order to meet rising demand of the society, and keep up with international trends, Vietnamese enterprises
should have a long term strategic vision on online education services.
V.
OTHER ONLINE VALUE ADDED SERVICES
1.
E-newspapers
If the year 2004 is the starting point and 2005 is the development period, the year 2006 is to enforce the
position of Vietnamese e-newspapers. According to the recent investigation of ACNielsen, about 70% of
Internet users are updated with daily news. Compared with other activities like online education, online
game, e-newspapers are more attractive to Internet users in Vietnam.
1.1.
E-newspapers gain popularity
Survey of large electronic newspapers shows rich content that covers a wide range of socio-economic
areas. The unlimited number of pages, words and topic columns is one of e-newspaper’s strengths. Most
popular areas of coverage of e-newspapers are politics, social life, economic issues, science, law, sports,
culture, entertainment, informatics and forums.
Efforts in contents and forms improvement can be clearly proved through the numbers of users as well
as daily readers. The most attractive e-newspapers are www.vnexpress and www.vnn.vn. After 5 years
of operation up to 2006, Vnexpress gained an average of 1, 5 million readers each day. The fact that this
website is listed among the world’s 300 top websites by Alexa.com’s ratings has marked a significant
milestone in the development of Internet content service business of Vietnam.
81
Box 3.4 Vnexpress to be listed among Top 500 Websites of Alexa.com
On 21 June 2006, 292 is Vnexpress position in Global Top 500 Sites of Alexa.com – a tool to
keep track of users’ flows under the biggest commercial corporation Amazon.com. At this position,
VnExpress has been well-matched with many famous e-newspapers in the world such as USA Today
(176), Guardian.co.uh (281), etc.
Appeared on the Internet on 26 February 2001, six months later, Vnexpress took the first position
in Vietnamese websites in the globe and stay in such position until now. VnExpress is the only one
not to receive subsidies except for the only revenues from advertising for its activities.
Source: http://vnexpress.net/Vietnam/Xa-hoi/2006/06/3B9EB11/
E-newspapers are called hourly newspapers due to their information update frequency. Its strength also
includes the capacity of storing information quickly and interacting with readers. The possibility of instant
feedback on each article also helps to attract more readers to this type of news media.
Moreover, e-newspapers are also a combination of multi-media. It conveys not only texts and pictures but
also sounds and images. Although still of unsatisfactory quality, these features have created new power
for this kind of communication channel..
Box 3.5 Some features of e-newspapers
In the press conference of launching functions of mutimedia of VietnamNet, Mr. Nguyen Anh Tuanthe editor said ‘We desire that audience can not only read latest news but also watch video clip,
live television program”. A secretary of an e-newspaper added ‘Readers of e-newspapers should
be able to get the sound and images of an interview, the sound of a blood in a short report at the
homepage”
Source: Vietnam PC World. No. 1/2005, page 9
1.2.
Going online to reinforce market position
In the past 3 years, major newspapers such as the Youth, the Labor, etc. have established their online
version with the aim to become leading Vietnamese e-newspapers for foreign affair communication. This
82
is a critical goal for which many political organizations have continuously renovated or upgraded their
websites. According to the Ministry of Culture and Information, 96 out of 102 current e-newspapers were
originated from traditional newspapers and mainly contain electronic version of newspaper issues.
Table 3.6 Comparison between independent e-newspapers and online version of newspaper
Independent e-newspapers
6
www.vnexpress.net
www.vnn.vn
www.dantri.com
www.vnmedia.com.vn
www.dangcongsan.vn
www.toquoc.gov.vn
Online version from newspaper
96
www.thanhnien.com.vn
www.tuoitre.com.vn
www.laodong.com.vn
www.hanoimoi.com.vn
www.vneconomy.com.vn
www.vir.com.vn
www.vnagency.com.vn
…
Building a news website requires big investment in software, web tools, equipment, Internet line leasing,
hosting service together with operational expenses (salary for journalists and editors of online articles).
However, many news agencies have been investing in e-newspaper, establishing a separate group of
editors, translators and reporters. E-newspapers have been regarded as a highly efficient business line to
increase revenue, build image and expand market for the more traditional newspapers.
Box 3.6 Benefits of e-newspapers
According to Mr.Nguyen Cong Khe - General Editor of the Youth newspaper, publication of the paper
version of this newspaper has increased by 25% after one year’s operation of the online version.
Source: http://vietnamnet.vn/cntt/2005/03/387127/
83
E-newspapers in Vietnam have leveraged on their distinguished characteristics which are update
frequency, accuracy and attraction of news. Together with the Renovation and international integration
process, increased information transparency has been a major momentum for the rising demand of
information in society. In addition, computer popularity and the booming of ADSL service will increase
access to and make e-newspapers the most popular among the current media.
2.
Value-added services for mobile networks
2.1.
Types of content provision for mobile networks
Content services for mobile networks were started in 2002 with pioneering activities of CDiT in the World
Football Cup Result Forecast. According to Echip Magazine’s statistics, the turnover of value added services
for mobile networks reached 1,500 billion VND in 2005. For only VNPT, the turnover of message services
accounts for 15-20% of its total turnover.18
Currently, there are more than 7 million cell phone subscribers in Vietnam, with 3.5 million new ones in
2006.19 In addition to major service providers, there have been several new players such as Hanoi Telecom,
EVN Telecom with 3G technology. The growth of the cell phone market somewhat shows the high potential
of value added services for mobile networks, especially message service. In general, this form of services
may be divided into two categories: multimedia message service and content message service.
Multimedia message service still gets the upper hand, including ring tones, pictures, wallpapers and
games (Java and others) download. Now, multimedia message service provides various contents and is
increasingly enhanced:
Ring tones: monophonic Æ polyphonic Æ true tones
Pictures: black & white logo Æ colored logo Æ picture messages
Wallpapers: static Æ animated / black and white Æ colored
Games: enhanced features
-
Contents message services made great improvements in 2006. These services include:
-
Messages with prizes
Messages with economic and social information
Messages with specific contents: health consulting, traffic safety, reference, answers, etc.
Table 3.7 Popular messaging services
No.
Services
Major providers
1
Java Games
Blue Sea, VTC, iNET
2
Lottery
VASC, Biển Xanh, VTC
3
Football match results
VASC, Quang Minh DEC, iNet, VTC
4
Ring tone download
VASC, VTC, Blue Sea
5
Television voting
FPT, FSS, Blue Sea
18. Presentation of Industry and IT Dept. at the Conference of Vietnam Digital Content Industry Development Program until 2010 – Ministry of
Telecommunication.
19. Presentation by VnMedia at the Conference within the framework of Vietnam ICT 2006.
84
2.2.
Current market status
While the number of message service providers was few in 2005 and most of them are big enterprises
with high financial capability and close ties with mobile networks providers (e.g. VASC), it has increased
to more than 40 up to now.
Table 3.8 List of enterprises with message services at 8xxx
STT
Code
Providers
1
8118, 8228, 8338,
8448, 8558, 8758
ABC Communications, JSC.
2
8x00
FPT Telecom, JSC.
3
8x03
Digital and Interactive Data, JSC.
4
8x85
iNET Communications Company, Ltd.
5
8x08
CENTECH Communications, JSC.
6
8x09
Ha Thanh Technology Development Company (HTD)
7
8x10
SECOM Commercial and Technical Services, JSC.
8
8x13
FPT Software Solutions
9
8x18 (x= 0, 2, 3, 4, 5, 7) 8128
Vietnam Telecommunications and Information Technology Services,
JSC. (VTIS)
10
8x30
VTC INTERCOM Information Technology Development Company
11
8x33
Dong Ha Communications and Mobile Services, JSC.
12
8x60
Global Information and Communications Technology, JSC. – Global ICT
13
8x66
EBC Communications, JSC.
14
8x70
New Generation Telecommunications, JSC. (VNGT)
15
8x77
Blue Sea Technology and Communications Company, Ltd.
16
8x78
Quang Minh DEC, Ltd.
17
8x83
Saigon Telecommunications Services Company
18
8x84
Electronics and Telecommunications Investments and Development,
JSC. (ELCOM)
19
8x88
Vietnam Data Company (VDC)
20
8x99
Vietnam Software and Communications Company (VASC)
Source: www.mobifone.com.vn
85
The number of enterprises registering as mobile content providers has rapidly increased. Besides, according
to enterprises, these services are able to bring about turnover at once and recover the investment in a
much shorter time than other types of e-commerce.
Turnover (VND billion)
Figure 3.4 Turnover from message services of VASC from 2004 to 2006
2004
2005
2006
(estimated)
Source: Research by E-commerce Department, Ministry of Trade
Business report of VASC is one of the most convincing evidences for recent developments in the market.
The above figure shows that VASC’s turnover from message content service in 2005 sharply increased as it
was then the only service provider in this market. However, the company’s growth has been slowed down
due to the yield of market share to new service providers that emerged in early 2006.
The market of message services has made great leaps in 2006. This is illustrated by the number of
participating enterprises, and the shift in market structure as a result. While VASC was the largest and
almost the sole provider of these services in 2005, its leading position was overtaken by VTC in 2006. The
ten largest providers now account for about 82% of the market, with VTC holding a dominant share of
32% and VASC of 27%.
Figure 3.5 Market shares of value added services for mobile networks
32%
41%
VTC
VASC
Others
27%
Source: Research by E-commerce Department, Ministry of Trade
86
Figure 3.5 points out that the market shares of content service for mobile networks are not equal among
providers. Most of the share is concentrated to large firms with strong financial capacity, large resources
and state-of-the-art technology. This type of business requires strategic partnership between the service
provider and support technology providers, particularly Internet service providers (ISP) such as Vinaphone,
MobileFone, Viettel, etc. Moreover, to optimize their share of the market, mobile content providers must
also establish partnership with television stations in 64 provinces as well as the popular newspapers
and e-newspapers. Due to the disparity among provinces’ development levels, market segmentation is
essential to businesses’ strategy so that businesses can have a customized approach for each market
segment to gain optimal market share.
With the inception of advanced technology such as 3G, Wimax, and new content service provider, such
as Hanoi Telecom, EVN Telecom, the market of content services for mobile networks will see significant
growth for the time to come, especially in the current context of international economic integration. In
addition, the market will be extended with the participation of international enterprises such as Yahoo,
MSN, Google, benefiting the whole mobile phone business sector.
87
CHAPTER 4
E-COMMERCE
APPLICATION AND
BUSINESS
CHAPTER 4
E-COMMERCE APPLICATION
AND BUSINESS
In order to assess the use of e-commerce in enterprises, the Ministry of Trade (Department of Electronic
Commerce) conducted a survey among 1300 enterprises all over the country. The questionnaire covered
many aspects of e-commerce application in businesses. The objects of survey are chosen according to
random sampling method, enterprise types, sizes and business industries. However, in term of geography,
the survey was carried out among enterprises from 3 largest cities, namely Ho Chi Minh, Ha Noi and
Da Nang and some other provinces. Statistics and analysis in this chapter are primarily based on 1.077
qualified answers.
I.
E-COMMERCE APPLICATION IN ENTERPRISES
In comparison with 2005 and previous years, e-commerce application of enterprises in 2006 has made
great improvements in all aspects.
1.
E-commerce readiness of enterprises
The questionnaire established several indicators to assess enterprises’ readiness for e-commerce
application, including the total number of computers, telecommunication infrastructure and Internet,
Internet use purposes, and the level of local network establishment and use. These indicators may not
completely show the readiness level for e-commerce but somewhat reflect an overview of e-commerce
application in enterprises.
First, it can be seen that most of Vietnamese enterprises are small and medium enterprises (SMEs). 60% of
participating enterprises have the number of employees less than 20, and 17% have from 21-50 employees.
The rate of enterprises with more than 500 employees accounted for less than 5% of participants.
91
Figure 4.1 Workforce scale of surveyed enterprises
70%
60.3%
60%
Percentage
50%
40%
30%
17.2%
20%
8.0%
10%
0-20
21-50
51-100
5.6%
4.4%
1.9%
101-200
201-500
501-1000
2.7%
Over 1000
Workforce
However, the scale of enterprises according to employee number are different among business industries.
For example, the rate of enterprises with less than 500 employees in IT sector is 91% and that of handicrafts
and fine arts is 94%. Meanwhile, only 28% of garment enterprises participating in this survey have less
than 50 employees and 40% of which have more than 500 employees.
Figure 4.2 Workforce scale of garment enterprises
24%
25%
20%
20%
Percentage
16%
15%
10%
8%
8%
21-50
51-100
12%
12%
101-200
201-500
5%
0-20
501-1000
over1000
Workforce
The scale of enterprises in mechanics, consulting, tourism, finance and transportation are more variable.
For example, in mechanics and transportation, there are enterprises with small, medium and large number
of employees.
92
Figure 4.3
Comparison of workforce distribution between mechanics and transportation industries
60%
50%
Percentage
40%
Transportation
30%
Mechanics
20%
10%
0-20
21-50
51-100
101-200
201-500
501-1000
Over 1000
Workforce
1.1
Use of computers in enterprises
Investments in purchasing computers in enterprises are fine picture in the year 2006. Of course, as the
survey are carried out in three largest cities, Ho Chi Minh, Ha Noi and Da Nang and some more developed
areas, it only reflects the application of IT and e-commerce in urban areas.
While most participating enterprises are small, the average number of computers per each enterprise is
17.6 and 6.3 persons use a computer.
In a more detailed analysis, only 0.1% of participating enterprises have not equipped computers, thus
it may be considered that each enterprise has at least one computer. With respect to most of small and
medium enterprises with 78% with less than 50 employees, most of enterprises (82%) have less than 20
computers. The rate of enterprises with more than 50 computers is approximately 5%.
Figure 4.4 Computer distribution in enterprises
93
With regard to the average number of computers per enterprise and the number of employees per each
computer by industries, IT, consulting and laws have the highest rate of application. The average number
of computers in one IT enterprise is 32 and each person has one computer. Tourism enterprises have high
level of IT application, on average, 1.4 persons use a computer.
Garment industry has rather low level of IT application, on average each enterprise has less than 10
computers and 22 persons use a computer. This shows that most garment enterprises use simple labour
in production, only managerial and office departments use computers in work. Similarly, mechanical
sector has low level of IT application, about 10 persons/computer. Handicraft and fine arts sector has the
same low level (6 persons/computer). With addition from other industries, the proportion is 6.5 persons/
computer for industries similar to handicraft and fine arts sector.
Table 4.1 Average number of computers by industries
Industries
Number of computers
Staffs/computer
Mechanics
14.43
9.99
IT
32.00
1.10
Garment
9.82
22.32
Telecom
17.16
1.36
Tourism
17.16
1.36
Banking and Finance
16.65
3.07
Fine Arts
10.25
6.31
Laws and Consulting
51.39
1.85
Transportation
24.31
6.72
Other
13.44
6.49
Overall Average
17.66
6.25
1.2.
IT and e-commerce training
In 2006, enterprises paid more attention in e-commerce training for staff. Together with regular training
in colleges, training course held by training centers, enterprises and organizations greatly increased,
attracting learners from many enterprises. Results from interviews show that employers give candidates
many questions regarding e-commerce and IT in current integrating background. This proves that
enterprises begin to require a certain level of e-commerce knowledge from employees, especially sales,
marketing staff.
To assess the human resources preparations for e-commerce, the questionnaire asks participating
enterprises about the methods of IT and e-commerce training for their employees. Of the 3 given methods,
on-the-job training is the most preferable, 62% of participating enterprises chose this method. A lower
rate chose to combine sending employees to course and open short-term courses (external courses).
94
The number of enterprises chose not to train IT and e-commerce for employees accounted for 21% of
investigating subjects.
Table 4.2 Training methods of enterprises
Training methods
Yes
No
Internal courses
8.16%
91.84%
External short-term courses
30.21%
69.79%
On-the- job training
62.91%
37.09%
None
21.06%
Following the trend of 2004 and 2005, on-the-job training according to job requirements are still preferred.
There are many reasons for this preference, but the primary one is the low cost and immediate effects of
this training method. Opening courses (internal courses) are sometimes costly, while mutual training is
the cheapest and quickest way to serve the immediate demand of enterprises. However, from a strategic
point of view, this method cannot provide sufficient knowledge for employees and long-term effects for
human resource development is not very high.
Awareness of the advantages of e-commerce among enterprises, especially among their business leaders,
is an important factor in creating effective decisions in production. Other questions such as the rate of
sending employees for training, investing in e-commerce has increased in 2006 in comparison with 2005
prove that recognition of enterprises towards e-commerce is more clear, from board of directors to sales
and production units.
In 2006, many courses on e-commerce for enterprises were organized and attracted many learners from
cities and provinces. This proves that many enterprises, especially small and medium enterprises are
interested in studying the advantages and effective ways of applying e-commerce. In training courses,
lecturers had chance to exchange, receive information from students on the current status of applying
e-commerce in enterprises and practical matters. There were many professional questions, showing high
awareness of learners of e-commerce1.
1.3.
Telecommunications and Internet infrastructure
Regarding telecommunications and Internet infrastructures, the survey showed that 100% of participating
enterprises have telephones, 100% have fax and the rate of enterprises having Internet connection was
92%. Among enterprises having Internet connection, ADSL connection accounted for 81.5%, exclusive
connection accounted for 5.4% and dial-up connection only accounted for 5.2%. Among 8% enterprises
without Internet connection, 3.5% said that they would connect the following year.
Thus, it can be affirmed that the minimum requirements for applying e-commerce are established in
most enterprises all over the country.
95
Figure 4.5 Internet access methods of enterprises
4.36%
3.54%
5.17%
5.44%
ADSL
Lease line
Dial - up
No connection
Next year - connection
81.49%
1.4.
Purposes of using Internet in enterprises
Regarding the purposes of using Internet in enterprises, the survey showed that 82.9% of enterprises
use Internet for searching, 64.4% for email exchange, 62.8% for data transfer, 40% for buying and selling
goods and services, 38.9% for maintaining and updating websites. Notably, only 22.1% use Internet for
contacting state authorities. Besides, some use Internet for other purposes, such as VoIP.
This result showed that enterprises have exploited many advantages of Internet. Internet connection
helps enterprises search for partners, study the market and goods, seek advertisements or actively
advertise their own image. For enterprises with their own websites, Internet connection is compulsory
for updating the contents. It is the easiest and cheapest way to contact their clients and partners through
emails or other means of data transfer.
Low rate of enterprises using Internet as a communicating tool with state authorities reflects a fact that
public online services are not various.
1.5.
Network construction and use
Another indicator in assessing readiness level for e-commerce in enterprises is the index of using LANs.
According to the survey, 73.8% of enterprises have set up LANs and 4.0% have used WAN. These figures
somewhat reflect high level of readiness for e-commerce. Advanced e-commerce must come from high
computerization level in enterprises.
96
Table 4.3 Level of network use of enterprises
Computer networks
Enterprises’ percentage
LAN
73.78 %
WAN
4.03%
Intranet
8.01%
Extranet
1.21%
Note: one enterprise can use more than a network
Two other indicators are Intranet and Extranet connections. This is a new technology for many Vietnamese
enterprises, especially SMEs. The survey therefore showed these indicators at the low level, namely 8.0%
of enterprises use Intranet and 1.2% use Extranet. This technology is currently applied in large enterprises
and corporations.
1.6.
Obstacles to the use of Internet in enterprises
Regarding obstacles to the use of Internet in business, 36.5% of enterprises consider data safety and
information security the biggest obstacle. For 19.5%, it is slow and unstable Internet connection; for 5,1%,
it is the expenses; and for 5,8%, it is unclear impacts of the Internet on business efficiency
Figure 4.6 Security obstacles as evaluated by enterprises
40%
36.54%
35%
30.87%
Percentage
30%
25%
19.71%
20%
15%
8.46%
10%
5%
4.42%
Very low
Low
Medium
High
Very high
These data well reflect the current practice as 2006 is the year of network safety and security problems.
The above result shows that enterprises have recognized the importance of security when applying IT and
e-commerce, but many are puzzled by self-protecting measures. Thus, most enterprises remain passive
and awaiting, and are not active in finding solutions for network security in general and e-commerce in
particular.
97
2.
Level of e-commerce application
The questionnaire gave out 19 questions to assess different levels of applying e-commerce in enterprises
of different industries.
2.1.
Better identified strategy in applying e-commerce
In 2006, many enterprises chose a more clear strategy in applying e-commerce than that in previous
years.
The question on a plan on applying e-commerce was completely and clearly answered by enterprises,
with specific projects. Enterprises planning to invest in e-commerce also gave out detailed plans on
time, costs, human resources, etc. Most popular plans and projects included designing and constructing
websites, participating in e-commerce transactions, adding and perfecting websites’ functions, training
workforce or establishing departments specialized in e-commerce.
Table 4.4 E-commerce projects of enterprises
E-commerce projects in 2006 and following years
Percentage of enterprises
Building new websites
30%
Perfecting websites’ features
53%
Implementing ERP
20%
Training human resources
27%
Establishing e-Commerce departments
19%
Participating in e-Marketplaces
27%
Note: each enterprise may develop more than one project
2.2.
Increased number of enterprises with e-commerce staff
According to the survey, 38% of enterprises have e-commerce staff, with an average number of 1.5
persons/enterprise. This is not high in comparison with other countries in the area and in the world.
However, it shows positive progress when comparing e-commerce human resources of 2006 with that of
previous years. The numbers of e-commerce staff have risen since enterprises, especially SMEs, devised
new strategies and projects for e-commerce. In fact, although the number of e-commerce staff is low,
there are other employees that are partly responsible for e-commerce.
2.3.
High rate of enterprises having websites
If an enterprise with a website is an important index, reflecting applying level, then that index shows a
positive picture this year. Among 1,077 enterprises, 31.31% have their own websites and 35.07% plan to
construct next year.
98
Figure 4.7 Percentage of enterprises having websites
35.07%
33.62%
Without website
With website
Plan to build website next year
31.31%
For deeper analysis of the efficiency of websites for business, questions on the functions of the websites
and goods/services presented on them showed that:
Table 4.5 Functions and features of websites
Features of websites
Enterprise introduction
98.3%
Product information
62.5%
E-commerce transactions (allowing orders)
27.4%
Online payments
3.2%
Target clients
Consumers
46.3%
Businesses
53.5%
Products/Services on websites
General goods (electronic supermarket)
7.2%
Mechanical and machinery products
8.3%
Electronic and telecom appliances
13.4%
Consuming goods
8.0%
Fine arts
4.9%
Agricultural, forestry, aquatic products
5.4%
Garment and footwear
4.2%
Books, cultural products, gifts
2.0%
Digitalized goods
3.2%
Tourism services
7.2%
Laws and Consulting services
6.0%
99
From the above result, it can be seen that quality and products on websites have made some certain
changes in comparison with the year 2005. First, that is the increase in the function of online transactions,
27.4% of websites allow online orders. Goods and services on websites have also changed. E- Marketplaces
are still being provided, but particular goods have begun to hold the upper hand, the most popular are
electronic appliances, fine arts, footwear, clothes, cosmetics and gifts.
Cross analysis to compare the dependence of websites on industries shows no correlation of industry
and whether the enterprise has a website or not. Thus, it can be assumed that enterprises of the same
industry do not have equal interests in e-commerce. Training and popularization of the advantages of ecommerce for enterprises, especially SMEs, are important.
2.4.
Higher frequency of information updates on websites
Different from the 2001-2005 period, in 2006, Vietnamese enterprises paid more attention to in-depth
development of websites. The survey showed that 62.2% of enterprises update their websites daily, and
13.7% weekly. This signals increased attention of enterprises to the practical operation and efficiency of
websites, rather than establishment of website as a fashion.
Figure 4.8 Updating frequency of enterprises’ websites
18.50%
5.56%
62.20%
Daily
Weekly
Monthly
Occasionally
13.73%
The correlations of updating frequency and goods on the websites showed that electronics and
telecommunication appliances, books, cultural products and gifts are the most frequently updated.
These also are goods with high online purchase volume, that comply with the commom rule: the higher
standardization the products have, the more suitable they are for online sales.
2.5.
Rapidly increased number of enterprises participating in e-marketplaces
Besides establishing websites, participating in e-marketplaces is an important indicator in assessing the
level of applying e-commerce in enterprises. Moreover, in the current background of small e-commerce
implementing force and moderate budgets, participating in e-marketplaces is a strategic and effective
solution. According to the survey, 7.9% of enterprises participated in electronic transactions, and 55%
participated in more than one e-marketplace.
100
Table 4.6 Popular e-marketplaces
Domestic e-marketplaces
Oversea e-marketplaces
www.ecvn.gov.vn
www.alibaba.com
www.vnemart.com
www.logistics.com
www.thuonghieuviet.com
www.amazon.com
www.vietco.com
www.ebay.com
www.golict.com
www.chodientu.vn
www.btspalaza.com
www.gophatdat.com
www.vietnamfood.com.vn
Cross comparison of the rate of enterprises with e-commerce staff and enterprises participating in emarketplaces showed a big relation. This indicates that enterprises with e-commerce staff may choose
methods to participate in e-commerce more professionally and effectively.
Figure 4.9 Correlation between number of e-commerce staff and level of participation in
e-marketplaces20
Correlations
C.4. Doanh nghiệp
có tham gia các
C.1. Doanh nghiệp
sàn giao dịch
có cán bộ
thương mại điện tử
chuyên trách
(trong và
về TMĐT
ngoài nước)
C.1. Doanh nghiệp
có cán bộ chuyên
trách về TMĐT không
Pearson Correlation
Sig. (2-tailed)
N
1082
C.4. Doanh nghiệp có
tham gia các sàn
giao dịch thương mại
điện tử (trong và
ngoài nước không)?
Pearson Correlation
Sig. (2-tailed)
.219**
.000
1
N
1040
1064
1
.219**
.0001
040
***. Correlation is significant at the 0.01 level (2-tailed)
In 2006, many enterprises have found new customers and signed contracts by participating in domestic
and foreign e-marketplaces.
2.6.
More vigorous IT application in enterprises
The survey of IT application level in enterprise management showed that the number of enterprises
using modern management software is increasing. Especially, two solutions used by large enterprises
20. SPSS analysis
101
achieving high effect, are customer relationship management (CRM) and enterprise resource planning
(ERP). The connection with partners is also interested to enterprises, 12,8% of which told that they had
had databases directly connected to partners.
Box 4.2 Implementation of Enterprise Resources Planning (ERP) solution
Saigon Footwear, JSC. uses FPT’s ERP solution
On July 9, 2006, Saigon Footwear JSC., signed an ERP contract with FPT. This is a breakthrough of
the company in enhancing competition capability and prepared the launch of two new factories in
the Middle and the North (Thanh Niên 11/7/2006)
Vinamilk implementing ERP System of SAP and Solomon
Vietnam Milk, JSC. (Vinamilk) and FPT have officially started the project “The System for Business
Management - ERP” to convert the current business system of Vinamilk to a new one based on SAP
and Solomon’s solutions. This will allow Vinamilk to manage all the data from its distributor system.
Integrated information will lead to the foster, precise analysis and suitable planning for the future.
(Lao Động 6/10/2006)
Dien Quang starts ERP
On November 16, 2006, Dien Quang Lightbulb JSC., announced the commencement of its ERP
project with Oracle’s solutions, implemented by FPT ERP Services Center.
Applying management methods at international standards is part of the strategy in developing Dien
Quang into a powerful economic group in lighting and electrical industry in Vietnam from 2005
to 2010. Currently, Dien Quang is a leading Vietnamese enter in producing lighting and electrical
equipment on large, synchronous and closed scale with producing process including 4 factories and
3.000 staffs. (PC World Vietnam, 16/11/2006)
ERP supports pharmaceutical business
Phuc Hung Thinh Software Solutions JSC., (SS4U) has signed a contract to implement ERP for Minh
Hai Pharmaceuticals, JSC. (MIHAPHAR). The value of the contract is 25.000 USD, including: finance,
purchasing, selling, storing and production management of 3 factories. Implementing time is 5
months from November 20, 2006 for the company and branches in Ho Chi Minh City.
As built upon advanced worldwide management process and suitable for Vietnam, ERP solution B4U
of SS4U met the demand of many industries. MIHAPHAR is a leading Vietnamese pharmaceutical
company. With B4U, MIHAPHAR can take control of the whole production and business process of
the company and its branches. (PC World Vietnam, 16/11/2006)
2.7. Diversified e- transaction forms but limited choice of delivery methods
A further survey in electronic interchange with partners and clients showed that 81.5% of enterprises
frequently use emails in doing business. Some enterprises begin to use electronic data interchange (EDI)
Besides websites, applying e-commerce in enterprises is also done through other means. This year’s survey
recorded the flexible use of various electronic means among enterprises such as websites, emails, facsimiles
and telephones to carry out trade activities. 78.9% of enterprises allow orders through electronic means.
102
Table 4.7 Ordering methods through electronic means
Electronic means
Percentage of Enterprises
Website
22.2%
Email
34.9%
Fax
24.2%
Telephone
29.3%
Note: Some enterprises use more than one method
The extent of goods or services ordering through electronic means somewhat reflects the depth of
e-commerce development. Besides facsimiles and telephones which have been used for a long time,
nowadays websites and emails are new electronic means that are frequently used for low cost and high
efficiency. Notably, email is the most widely used means in trade transactions.
Survey on delivery methods of enterprises showed that they had not changed in comparison with
previous years. For electronic orders, according to types of goods, enterprises may deliver online, use
delivery service of merchant agents, mobilize their own delivery team or use post services. Vietnam has
not had professional delivery services for online contracts, thus, for distant orders, enterprises often have
to use post services for delivery. According to the survey, delivery by post accounts for 17.1% of the total
transactions of enterprises. For digitalized goods, 8.9% are delivered online.
2.8.
Introduction of many payment methods
E-commerce cannot develop comprehensively and bring the best effects without electronic payment.
Thus, payment through electronic means is an important indicator in this survey.
Table 4.8 Payment methods
Payment methods
Percentage of Enterprises
Cash in hand
73.0%
Post transfer payment
31.9%
Bank account transfer payment
77.3%
Credit card
14.3%
Online payment
3.2%
Note: Some enterprises use several methods
The data from the above table showed that payment methods for electronic contracts are flexibly applied
by enterprises. The rate of enterprises allowing online payment is very low (3.2%), but the rate of which
103
accepting credit cards is 14.3%. The data also pointed out that most enterprises accepting online payments
are from Ha Noi and Ho Chi Minh City.
The rates of payment by cash and bank transfer are 73.0% and 77.3%, respectively, which reflect the fact
that Vietnamese banking system has not caught up with current trend of e-commerce.
In general, the level of applying e-commerce of enterprises in 2006 has thrived, but it is limited in trademark
advertising, product demonstrating and electronic exchange of information. In a more advanced level, electronic
transactions and contracts are done by some enterprises, but this number is not high. In doing business with
foreign partners, enterprises can make more use of emails, but with domestic partners, conventional papers
are often used. For individual customers, some enterprises have online shopping system, but the conventional
shopping habit of Vietnamese has not given more chance to these services. Thus, many enterprises stated that
it would take time for the consuming habit and business traditions in the society to be adjusted.
3.
The effectiveness of e-commerce application
Regarding the effectiveness of applying e-commerce in enterprises, 5 indicators were set in the
questionnaire:
-
Percentage of investment in e-commerce out of total annual expenses;
Revenue from electronic orders;
Revenue trend from applying e-commerce;
Obstacles to applying e-commerce in enterprises’ opinions;
Effects of applying e-commerce in business in enterprises’ opinions.
The efficiency evaluation of e-commerce application is mainly based on investment and turnover
indicators.
3.1.
Investment in e-commerce
The portion of investment in e-commerce out of total annual expenses of enterprises is an indicator of
e-commerce investment level. In comparison with 2005, this rate made considerable changes in 2006.
Table 4.9 Investment in e-commerce out of total investment
Percentage of enterprises (%)
Investment rate
2005
2006
Under 5%
82.4
48.3
From 5% to 15%
14.0
38.1
Over 15%
3.6
13.6
According to the survey, nearly half of enterprises (48.3%) invested less than 5% of annual expenses on ecommerce application, 38.1% did from 5% to 15%. Most notably, 13.6% invested more than 15% in 2006.
In 2005, only 17.5% spent more than 5% of total annual expenses for e-commerce, but in 2006, the rate
has almost tripled, accounting for 51.7% of surveyed enterprises. The investment structure is shifted
towards 5% to 15% of total expenses on e-commerce as the average rate.
104
Box 4.3 Hapro to implement e-commerce
With the aim to become a model of electronic head company, equal to economic groups in South
East Asia in 2020, on March 20, 2006, Hapro submitted the project “e-Hapro”.
Accordingly, Hapro’s aims by 2010 are: the operation, management, making decisions of leaders,
production and trade departments of the company will be based on a uniform computer network
system. 100% of its subsidiaries will apply e-commerce and specific software system based on
their functions. 80% of member companies (subsidiaries and joint ventures) will apply B2B, B2C,
B2G, and electronic customs, 70% of voluntarily linked companies know about B2B and B2C. The
categories are as follows:
•
Enhancing and perfecting network and hardware infrastructure;
•
Developing human resources in managing IT infrastructure and communications;
•
Establishing e-Hapro portals to link with its subsidiaries;
•
Implementing ERP, CRM, SCM (Supplier Chain Management) and other specific software;
•
Developing the database bank and perfecting e-commerce model.
In 2006, Hapro implemented its networks and websites and advertised its image and found new
customers, providing and purchasing products and signed many contracts. The result of October
2006:
•
Total turnover reached VND 3.765 billion, equal to 81% of the year’s plan, with an increase of
13% in comparison with the same period last year.
•
Total turnover export-import reached USD 144 mils, 19% increase in comparison with the same
period last year.
•
In which export turnover reached USD 73,5 mils, equal to 101% of the year’s plan, with an
increase of 40% in comparison with the same period last year.
Hapro’s reports
3.2.
Effectiveness of e-commerce investments
The figures on turnover rate of online orders out of the total turnover of 2006 is shown in Figure 4.10
Figure 4.10 E-commerce investment and turnover comparision
50%
48.25%
38.11%
40%
32.32%
34.35%
33.33%
30%
Invesment Ratio
Turnover Ratio
20%
13.64%
10%
Under 5%
From 5% to15%
From 5% to15%
105
From Figure 4.10 on the correlations between e-commerce investment and e-commerce contribution
to revenue, it can be seen that the effects of applying e-commerce in business are quite positive from a
cost-effect perspective.
Nearly half of enterprises (48.3%) spared less than 5% of annual expenses for e-commerce application, but only
33.3% reported contribution of e-commerce to total revenue below the rate of 5%. Percentages of enterprises
have e-commerce investment ratio and turnover ratio in the range of 5% to 15% are approximately equal
( 38.1% and 34.6% respectively). However, while only 13.6% of enterprises invested over 15% total
expenses on e-commerce, a much higher percentage (34.6%) attributed over 15% of total revenue to
e-commerce application.
Thus, while only 13.6% of enterprises invested more than 15% of total expenses, a much higher number
of enterprises (33.3%) reported more than 15% of turnover from e-commerce out of total turnover. On
the contrary, nearly half of enterprises invested a little to e-commerce (less than 5%), these enterprises
could still achieve turnover of more than 5%. This correlation shows that more enterprises pay for ecommerce investment, the more they get from the e-commerce activities .
Regarding the total turnover of 2006 in comparison with previous years, 95.7% of enterprises said that
their turnover from e-commerce had risen. Among 4.3% with a decrease in e-commerce turnover, many
enterprises blamed this on enterprise management, security risks and network safety, etc.
The above result is conformable to the overall development of e-commerce in the world: e-commerce
brings more effectiveness than conventional commerce, reduces the costs and raises the competing
capability of enterprises.
Box 4.4 Experience of e-commerce application in a handicraft enterprise
Doan Ket Production and Exim Company No 1 is an enterprise, operating in handicraft industry,
particularly products made from bamboo and other natural materials.
E-commerce application is deemed to be one of the measures helping the Company gain initial
success in market development. The effectiveness of e-commerce application is evaluated as
follows:
- E-commerce can support the Company with its marketing and searching business opportunities,
especially in international market.
- Invested cost is much less than that of traditional commerce; easily develop the market, search
and approach suppliers, customers and partners around the world.
- Abolish temporal and spatial limit: through transactions on Internet, the Company can perform its
business activities with partners around the world at all times.
- Reduce information and communication costs.
- Information of products, services, and price can be updated promptly and timely
- Improve competitiveness.
For Vietnam in general and medium-small enterprises in particular, it is rather effective to combine
e-commerce with conventional commerce tools such searching partners from relationship, fairs and
exhibition, commercial promotion, and overseas business trips.
Report at the E-commerce Application Seminar for Handicraft Sector, Hanoi November 9th 2006.
106
3.3.
Obstacles to e-commerce application
The survey results on 7 obstacles in applying e-commerce showed that the biggest obstacle is low
awareness of enterprises and consumers on e-commerce with 3.23 points. The next two obstacles are
weak electronic payment and unsafe transactions.
Table 4.10 Obstacles to e-commerce application
Obstacle
Medium Score
1
Low awareness of benefits of e-commerce
3.23
2
Inadequate online payment system
3.19
3
Insecure transactions
2.78
4
Imperfect legal environment
2.64
5
Incompatible social and business traditions
2.45
6
Few and unqualified IT human resources
2.45
7
Inadequate IT and Telecom infrastructure
2.22
* Score ranges from 0 to 4, of which 4 indicates the highest level obstacle
Different from previous years, legal environment was not regarded as the biggest obstacle in 2006. This
reflects the fact that many enterprises have known about the Law on Electronic Transactions, the Decree
on e-commerce and other related legal documents.
3.4.
Impact of e-commerce on business
The survey showed that e-commerce has made positive impacts on various production and business
aspects of enterprises.
Table 4.11 Impact of e-commerce strategy on business activities of enterprises
Medium score
Impact
2005
2006
1. Expanding communicating channels with current customers
3.23
3.03
2. Attracting new customers
2.90
3.30
3. Building enterprise’s image
3.22
2.23
4. Increasing turnover
1.94
2.25
5. Increasing profits and effectiveness
1.90
2.78
6. Reducing business cost
2.67
7. Increasing competing capability
2.89
* Score ranges from 0 to 4, of which 4 indicates the biggest impact
107
In comparison with 2005, the biggest impact of e-commerce on enterprises is the increase in benefits and
effectiveness. In 2005, the score of this field is 1.90, but that of 2006 is 2.78. This result is conformable to
the turnover of e-commerce in 2006.
One of the big advantages of e-commerce is to create an effective commercial promotion at a low cost.
This is reflected by the highest score (3.3) of attracting new customers and the second highest (3.03) for
opening new communicating channels with current customers.
II.
STATUS OF E-COMMERCE BUSINESSES
Besides the e-commerce application in enterprises, the overall picture of the development of e-commerce
in Vietnam also includes pioneers performing e-commerce through e-Marketplace. The 3 most popular
models are business-to-business (B2B), business-to-consumer (B2C) and consumer-to-consumer (C2C).
1.
Business-to-Business e-marketplaces model (B2B)
1.1
Overview
By the end of 2006, there are about 30 active B2B e-marketplaces in Vietnam with high business
opportunities and members. The survey among these enterprises showed that B2B enterprises have
made great progress and success. Besides enhancing the websites, renewing the interface with better
images, faster access, and management boards also pay attention to train both domestic and foreign
enterprises’ community and make efforts in improving service quality and attract more members. Notably,
the management boards have clear business strategy for developing e-marketplace in both technology,
such as software, servers, networks and resources, advertising, press, and consulting.
E-marketplaces provide not only opportunities of business and sales but also online bidding, online
assistance, e-news, and information searching. However, the biggest advantage of B2B e-marketplaces to
now is only to post buying and selling demands. Most of e-marketplaces could not support enterprises to
negotiate, execute contracts, and support after sales.
Although many B2B e-marketplaces are available, their quality is unequal. Several e-marketplaces are
quite attractive to enterprises with a number of business opportunities, while many other e-marketplaces
are not effective enough. It is very important for e-marketplaces to assess member enterprises and
business opportunities. While several e-marketplaces concentrate on the assessment of the information of
enterprises and selling/buying offers, many other e-marketplaces post information with low confidence.
Notably, the number of B2B e-marketplaces has increased considerably in 2006. However, most of them
are collective business e-marketplaces of similar models. Almost no B2B e-marketplaces specialize in
specific products, commodities, or services and gain prestige.
Following the e-marketplace ranking program in 2005, the Ministry of Trade continues to cooperate
with Vietnam Association of Informatics to perform this activity. The ranking program is meaningful for
enterprises in defining their orientation as e-commerce enterprises and e-marketplaces (including B2B)
have increased for the recent years.
Ranking of best B2B portals of 2006 are as follows:
108
First six-month ranking
www.ecvn.gov.vn
www.vnemart.com
www.gophatdat.com
www.vietoffer.com
www.thuonghieuviet.com
Whole year ranking
www.ecvn.gov.vn
www.vnemart.com
www.gophatdat.com
www.e-vietnamlife.com
www.laocai.com.vn
For ranks of e-marketplaces, refer to Appendix 3.
1.2.
Typical e-Marketplaces of 2006
* Vietnam E-commerce Portal (ECVN)
In August, 2005, the Ministry of Trade began to operate the Vietnam e-commerce Portal. Over a year, by
August, 2006, ECVN is regarded as a leading B2B portal in Vietnam with the following results from survey
of its 181 members:
Table 4.12 Benefits from joining ECVN (interview with 181 members)
Indicators
Quantity
Percentage
Signing new contracts
16
8.8
Finding new partners
114
63.3
Contracts signed
32
Source: ECVN Management Board, September 2006
Table 4.13
Members’ assessment of service quality on ECVN (interview with 181 members)
Ranking
Percentage
Excellent
34.5
Good
41.1
Medium
22.7
Poor
1.7
Source: ECVN Management Board, September 2006
After launching, ECVN portal has demonstrated its eminent features to the business community and
proved to be an effective tool to enhance business competitiveness in the context of international
integration. By the end of 2006, ECVN has more than 6000 trade leads and over 1500 members, many of
whom are from abroad. All ECVN members are provided with free service until the end of 2007. The basic
109
difference between ECVN and other portals is its strict criteria in selection of members, especially gold
members. Thus, trading on ECVN is credited with high level of trust.
* Gophatdat.com portal
While ECVN is operated by a large state agency, Gophatdat.com is managed by a private enterprise. In
2006, this portal emerged as one of best-known B2B portals in Vietnam.
Box 4.5 Sucess story of a B2B portal
According to Gophadat, by November 2006, transaction volume on this B2B portal has greatly
increased, totaling 100.000 direct and indirect transactions every month with high success rate.
Everyday, Gophadat receives 500 purchasing orders from all over the world, which are directly
communicated to all members for inquiries - After almost a year, Gophatdat.com has more than
10.000 domestic and foreign members, 11.000 products and 20.000 posts of export - import
information. The total value of transactions between domestic and foreign enterprises is about
200.000 USD/year, not to mention transations among domestic enterprises.
Gophatdat’s reports, 11/2006
It can be seen from Gophatdat.com report that this portal has made very quick progress and actively
supported commercial business of enterprises.
2.
Business-to-Consumer model (B2C)
By the end of 2006, there are about 80 enterprises doing business on B2C model. While some B2C portals
are built by non-profit organizations for the purpose of familiarizing enterprises with e-commerce, others
are operated by enterprises for commercial purposes.
According to the ranks of e-commerce websites of the Ministry of Trades, typical B2C portals of 2006 are:
First six- month ranking
www.megabuy.com.vn
www.vdctravel.vnn.vn
www.vnet.com.vn
www.btsplaza.com.vn
www.tienphong-vdc.com.vn
http://vdcsieuthi.vnn.vn
www.golmart.com.vn
www.golbook.com
www.chibaoshop.com
www.sinhcafe.com.vn
2.1.
Whole year ranking
www.btsplaza.com.vn
www.megabuy.com.vn
www.duylinhmobile.com.vn
www.123mua.com.vn
www.cleverlearn.com
www.saigontourist.net
www.tienphong-vdc.com.vn
http://vdcsieuthi.vnn.vn
www.linhperfume.com
www.chibaoshop.com
Goods and services on B2C websites
In 2006, most B2C portals are operated as e-marketplaces, with many products, mainly ones of high
standardization like electronic appliances (computers, cell phones, electrical, home and fridge appliances),
110
books and newspapers, office stationery, gifts, flowers, cosmetics, fashion, etc. Each has its own particular
product. For example, BTSPlaza specializes in cell phones, flowers, home appliances, cosmetics, which
account for 70% of its turnover. Some begin to provide online services and support to computer software,
tour, flight tickets, recruitment, etc.
Different from 2005 and previous years, in 2006 a new group of products has emerged on B2B marketplaces,
namely clothes, cosmetics and jewelry. These are less standardized merchandize, but beautiful images
suffice to satisfy the taste of consumers and attract a lot of buyers.
Figure 4.11 Garment products on BTSPlaza
Tourism is an industry that has strongly applied e-commerce and 2006 saw its success. Besides the flourish
of websites of travel companies, restaurants, the year also saw a big growth in the services of collective
tourist portals. These websites are built and operated by e-commerce enterprises, containing information
on different providers in tourist services such as hotels, traveling, tour and car booking, etc.
An illustration for this model is www.hotels.com.vn managed by Hi-tek. By the end of the second quarter
of 2006, the total number of hotels presented on this website is 264, of which 130 are from the North
(from Danang to the north) and 134 from the South (from Quang Nam to the south). Booking turnover
from this portal is quite high.
Table 4.14 Booking turnover from www.hotels.com.vn during first 2 quarters of 2006
Month
Online booking (USD)
1
28,486
2
16,904
3
27,990
4
34,096
5
9,662
6
8,336
Total
125,474
111
2.2.
Business on B2C websites
In 2006, the amount of goods on B2C has increased significantly, so has the quality.
According to reports of GOL, market range of the company not only reached far provinces from Yen Bai,
Dien Bien to Ca Mau, Soc Trang, but also many countries in the world, especially the USA, France, Germany,
Japan, Canada. Many loyal customers have come who frequently order high number for consumption
and redistribution. The number of GOL’s customers also increases several times in comparison with
previous years. The number of accounts rises from 30.000 in 2005 to nearly 50.000 in 2006. Among these,
the number of foreign customers remarkably rises and makes for 35% of accounts in e-marketplaces.
Wide network of giving presents of GOL satisfy most demand from many provinces besides two primary
centers Ho Chi Minh and Ha Noi.
Besides, some enterprises have paid attention to investment in building business strategy and enterprise
and website advertising. B2C portal BTSPlaza of BTS Communications and Technology Center began to
operate from December 15, 2005, however the brandname of the business has been mentioned in popular
media such as newspapers, radio and televisions, According to BTSPlaza’s statistics, until September 2006,
the ground has attracted 1.500 members, with 500 enterprises registering in trade leads. Average growth
from online sales is VND 133 million/month.
Table 4.15 E-commerce turnover of BTSPlaza in 2006
Units: VND million
Products
Quarter I
Quarter II
Quarter III
Flower
5
(40 successful transactions, price
ranges from VND 100.000 to 200.000)
7
(55 successful
transactions)
10
(70 transactions)
Phones
40
(13 successful transactions, price
ranges from VND 1.500.000 to
5.000.000)
100
(30 transactions)
160
(37 transactions)
Home appliances
30
(19 successful transactions, price
ranges from VND 150.000 to
2.200.000 )
80
(55 transactions)
150
(100 transactions)
6
(30 successful transactions, price
ranges from VND 45.000 to 378.000)
12
(45 transactions)
20
(70 transactions)
19
(57 successful transactions, price
ranges from VND 2.000.000 up)
101
(200 transactions)
160
(278 transactions)
Total turnover (VND)
100
300
500
Number of successful
transactions
159
385
555
Pharmacy
Others
Source: BTS Technology and Communications Center
112
Customers of B2C e-marketplaces are varied, but mainly office staff and officials.
Over the past year, B2C portals continued to utilize various payment methods, from cash, telegram
transfer, cheque, domestic and international credit cards, member cards, etc. However, most portals were
yet to find a plausible solution for online payment. Through the survey, delivery also remained a big
problem for B2C enterprises. It often takes time and goes through several middleman companies or post,
resulting in low efficiency of the transaction.
B2C enterprises have begun to pay attention to the privacy issue, but information security is still quite
low. Even the security of their own websites is not seriously guarded. Recent attacks of the two wellknown B2C websites www.vietco.com and www.chodientu.com are two outstanding examples, raising
alarm to e-commerce enterprises in making more effort to enhance website security and protect their
clients’ information.
Some websites started to develop value-added services such as consulting and customer support to
assist consumers in making purchase decisions. Popular services include expert consulting and buying
review, online customer support, etc. Following are the websites that excel in such services:
www.vdctravel.vnn.vn
www.btsplaza.com.vn
www.linhperfume.com
www.megabuy.com.vn
www.kiemviec.com
www.golmart.com.vn
A good example is BTSPlaza, whose website structure and interface have been continuously enhanced
over time, not only adding categories but also new threads in Buying Handbook and Today’s market,
helping consumers to evaluate and choose products more satisfactorily.
In addition to the original purpose of matching selling and buying offers, promoting enterprise, etc., ecommerce websites with high number of viewers are the ideal place for online advertising. Therefore, a
significant portion of B2C enterprises’ turnover is attributed to advertisement services. Many enterprises
have developed good strategies and yielded remarkable turnover from advertising on B2C websites.
According to GOL, advertising turnover from enterprises’ websites are 10 times more than year 2005.
Box 4.6 A successful B2C model
The number of GOL’s clients, especialy domestic business clients, increased much more rapidly in
2006 than the previous years. Major product groups such as office stationery, office equipment and
appliances, gifts and presents have made large contribution to GOL’s revenue.
GOL’s clients are from all around 64 provinces in the country. E-commerce turnover increased over
400% in 2006, and the company’s goal is to gain VND 12 billion by the end of 2006.
Beside products on long existing websites (Golmart, Golgift, etc.), those on newly established
websites also contributed to turnover growth in 2006. Golwow, for example, has provided more
than 2000 tickets since its establishment 8 months ago. It has become a familiar website for singers
to promote their shows. In addition, Golict has gained approximately VND 1 billion from its digital
products and is considered one of the major distribution channels by many hardware suppliers for
the first year of its operation.
G.O.L’s reports
113
3.
Consumer-to-Consumer model (C2C)
C2C is an e-commerce model supporting transactions among consumers. Year 2004 and 2005 witnessed
a boom of C2C e-marketplaces in Vietnam, but the trend slowed down in 2006. Instead of quantity, the
quality of C2C e-marketplaces was improved, with more intensive operation, increasing number of sellers
and buyers and higher rate of successful transactions.
According to Ministry of Trade’s ranking, 5 top C2C websites of year 2006 were:
www.1001shoppings.com
www.chodientu.vn
www.heya.com.vn
www.vietco.com
www.sieuthihangchatluong.com
A new and high-ranked C2C e-marketplace is presented in the following box.
Box 4.7 A newly established C2C e-Marketplace in 2006
www.1001shoppings.com is a C2C e-Marketplace established in April 2006, but it has gained
significant achievements as follows:
-
the number of members: 516 enterprises (with e-stores); 2700 retailers (shops or
individuals), and over 10000 online customers
-
the number of successful orders and transactions: estimated about 1800 transactions
-
the turnover: 90 million VND/month
-
the customer growth rate: approximately 200 new members per day
-
the orders and turnover: 180 transactions and 10-25 million VND per day
-
the mode of payment: by bank transference or cash or through the international
payment system PAYPAL (mainly applied to foreign customers)
Reported by www.1001 shoppings.com
A general advantage of C2C websites is to allow their members to set up e-stores. It means that C2C
model is integrated with the B2C features. For instance, the websites below:
www.chodientu.vn
www.sieuthihangchatluong.com
www.vietco.com
www.ethitruong.com
www.1001shoppings.com
Members joining these marketplaces are individual customers, so transactions are mainly performed
under the form of classified ads. Several websites include a bidding tool for customers, such as:
www.chodientu.vn
www.heya.com.vn
www.sieuthihangchatluong.com
114
www.1001shoppings.com
www.saigondaugia.com
Nearly all of the websites have eye-catching and user-friendly interface, enabling consumers to search for
their desired products and detailed product information with ease.
There is a wide variety of products posted on C2C e-marketplaces. Beside electronic products with high
level of standardization such as cell phones, audio-phones, cameras, or computers, valuable products
such as cars or real estate are also posted in several e-marketplaces. In some e-marketplaces, products of
disputable legality like domain names or virtual property in online games are also advertised for sales.
For example, in:
www.1001shoppings.com
www.raobandomain.com
www.chodoao.com
C2C e-marketplaces have also provided services to support enterprises, such as website customization
for more user-friendly interface, online Q&A, product review by users and experts, forum for bidders to
share their experience and post questions for website administration. Moreover, some websites allow
customers to compare prices of product at different e-stores, making it easier for consumers to make their
purchase decision.
Figure 4.12 Price comparison interface on AHA
4.
Participation in e-marketplaces and new vision of business strategy
Participation in e-commerce of enterprises has become a popular trend. The number of business
members on domestic and foreign e-marketplaces increased rapidly. However, the efficiency gained
from these e-marketplaces are not the same among enterprises. Challenges faced by businesses when
joining e-marketplaces can be illustrated through a case study of enterprises participating in the Vietnam
E-commerce Portal (ECVN).
115
For over one year of operation, ECVN has registered more than 1500 members, of which over 300 gold
members are trusted export enterprises selected by the Ministry of Trade. In order to create confidence
in online transactions conducted on ECVN, enterprises must be appraised at different levels before they
become gold, silver or bronze members. By the end of December 2006, there were over 6000 business
opportunities posted on ECVN (www.ecvn.gov.vn).
According to a survey conducted by ECVN management board among its 181 members in August 2006,
16 members (9%) had succeeded in acquiring 32 new contracts and 114 members (63%) found their
potential partners. The survey also showed that a majority of ECVN members (76%) rated ECVN’s support,
both online and offline, above average level. These figures have proved the rapid and steady development
of ECVN over the past year. Many enterprises have gained initial success on ECVN.
According to the report by Vietnam Industrial Technology & Equipment Joint-Stock Company (Vintec,
JSC.), after joining ECVN in March 2006, it has yielded significant benefits from this B2B e-marketplace.
The Company has concluded 15 contracts with 12 large companies, for a total value reaching over VND 6
billion. Besides, tens of foreign entities have shown their interest in becoming partners of the company.
Obviously, it is not very difficult to participate in ECVN and its advantages have been recognized and
taken by many enterprises, even SMEs like Vintec.
Another example is Hapro, a large enterprise that has been active member of ECVN. Mr. Nguyen Thanh
Son, deputy director of Hapro, reveals that the company management recognized the importance of
IT and e-commerce quite early, so they took much consideration not only in computers and Internet
investment but also in establishing website and conducting transactions on the Internet. Hapro highly
appreciates ECVN’s support, especially ECVN’s training services for e-commerce skills. The company
has assigned 3 staffs who work to update the trade leads and do other related tasks on the Internet,
particularly for ECVN.
However, beside active members like Vintec and Hapro, many other enterprises have not achieved clear
effectiveness from ECVN membership.
The awareness of the enterprise leadership is one of the key success factors in e-commerce in general and
participation in e-marketplace in particular. In the first stage of e-commerce, those leaders who interested
in technology and fully aware of the benefits of e-commerce can effectively apply it. With proper vision
and rational allocation of investment for e-commerce, they will achieve high effectiveness from ecommerce application. On the contrary, if enterprises are unaware of the importance of e-commerce in
the context of global integration and have no appropriate strategy for e-commerce application, they will
not participate or do so passively. As a result, it is impossible to achieve satisfactory outcome.
... One of the weak points of many Vietnamese enterprises is to “let the grass grow under one’s
feet”. In the current integrated trend, if this weak point is not overcome, viz initiative in making best
of information and opportunity, this will be one of the causes resulting in failure.
http://www.vneconomy.com.vn/vie/?param=article&catid=01&id=cdc3dc662cc378
In fact, many enterprises have participated in ECVN for a long time, but were yet to be fully active by
frequently updating information on the website. Except for general information about the company,
116
their business line and contact people that were provided at early registration, these enterprises have
no further new entries. They participate in ECVN and take no action to promote e-commerce activities.
Participation in ECVN does not mean that enterprises only register to be members. They must take
initiative in restructuring the organization apparatus, rewriting their marketing strategy and building new
management model, etc. Besides regular update of buying and selling information, enterprises should
know how to exploit and search for business information through different channels.
Not every enterprise in key industries or industries with strong IT application will have equally
strong e-commerce application. Textile, garment and shoe-making industries are all considered key
industries with high rate of IT investment, but their e-commerce operation is less active than the
handicraft sector. A survey of ECVN members shows that textile & garment companies, who were
originally the target clients ECVN, often post on the website products from inventory clearance,
hence less attractive to potential customers. Meanwhile, tourism and handicraft enterprises, those
not initially targeted by ECVN, have actively and efficiently utilized the services that the website
has to offer.
http://www.pcworld.com.vn/pcworld/magazine_b.asp?t=mzdetail&atcl_id=5f5e5d5f5f5c56
Back to the success story of Vintec, which is a small company providing devices and machines for
construction, transportation, health care, and science and technology. According to a report by Vintec, it
is very simple to participate in ECVN. It only takes the company 5 minutes per day to update information
on the websites. Besides tangible benefits, Vintec Management Board believes that participation in ECVN
helps to promote the company’s image at comparatively low costs.
The experience of Doan Ket Company from participating in ECVN and other e-marketplaces, which is
summarized in the following box, may be useful to many enterprises around the country.
To achieve initial success in e-commerce application, the following factors are critical:
- Vision and development strategy by the enterprise’s leadership.
- Investment on equipment, assignment of responsible staffs and continuous training
- Participation in prestigious e-marketplaces.
(Doan Ket Company)
117
APPENDIX
APPENDIX A - DECREE ON E-COMMERCE
GOVERNMENT OF VIETNAM
SOCIALIST REPUBLIC OF VIETNAM
---------------------
Independence - Freedom - Happiness
No.: 57 /2006/ND-CP
-----------------------Hanoi, 09 June, 2006
DECREE ON ELECTRONIC COMMERCE
THE GOVERNMENT
Pursuant to Government Organization Law dated December 25, 2001;
Pursuant to Commercial Law dated June 14, 2005;
Pursuant to E-Transaction Law dated November 29, 2005;
At proposal of the Minister of Trade;
HEREBY DECREES
CHAPTER 1 - GENERAL PROVISIONS
Article 1. Scope of Application
This Decree applies to:
1. The use of electronic communications in commercial and commercial-related activities in the territory of the Socialist Republic of Vietnam.
2. The use of electronic communications in commercial and commercial-related activities conducted outside the territory of the Socialist Republic of Vietnam, whereby the parties agree to apply
Commercial Law and this Decree.
3. This Decree does not apply to electronic communications that are bills of exchange, promissory notes, consignment notes, bills of lading, warehouse receipts or any transferable instrument
that entitles the bearer or beneficiary to claim the delivery of goods or the payment of a sum of
money.
121
Article 2. Subjects of Application
This Decree applies for:
1. Merchants using electronic communications in commercial and commercial-related activities.
2. Other organizations and individuals using electronic communications in commercial-related
activities.
Article 3. Definition
For the purpose of this Decree, the following terms shall be construed hereafter:
1. “Communication” is any contract, request, notice, statement, receipt or other documents that are
made in connection with the formation or performance of a contract;
2. “Electronic communication” is communication made by means of data messages;
3. “Data message” is information generated, sent, received or stored by electronic means.
4. “Originator” is a party by whom, or on whose behalf, the electronic communication has been sent
or generated prior to storage, but does not include a party acting as an intermediary with respect
to that electronic communication;
5. “Addressee” is a party who is intended by the originator to receive the electronic communication,
but does not include a party acting as an intermediary with respect to that electronic
6. “Information system” is a system for generating, sending, receiving, storing or processing data
messages;
7. “Automated message system” is a computer program or an electronic or other automated means
used to initiate an action or respond to data messages, without review or intervention by a natural
person each time an action is initiated or a response is generated by the system;
8. “Place of business” is the place where a party conducts business activities other than the temporary
provision of goods or services out of a specific location.
Article 4. Place of business of the parties.
1. A party’s place of business is the location indicated by that party, unless another party demonstrates that the party making the indication does not have a place of business at that location
2. If a party has not indicated a place of business and has more than one place of business, then the
place of business is that which has the closest relationship to the relevant contract, with regard to
all the circumstances before or at the conclusion of the contract.
3. If a natural person does not have a place of business, his or her place of business is deemed to be
the person’s habitual residence
4. A location is not a place of business merely because that is where equipment and technology supporting an information system used by a party in connection with the formation of a contract are
located; or where the information system may be accessed by other parties.
5. A local indication connected with a domain name or electronic mail address used by a party does
not create the presumption that the party’s place of business is located in that locality.
Article 5. State management over electronic commerce
Functions of state management over electronic commerce include:
1. To contemplate and implement strategies, schemes, plans and policies for the development of
electronic commerce.
2. To stipulate and implement legislations on electronic commerce.
122
3. To stipulate standards for electronic commerce.
4. To implement electronic commerce training and awareness raising, to provide support activities
for application of electronic commerce.
5. To supervise enforcement of electronic commerce legislations, settle petitions and complaints, and
penalize violations of regulations governing electronic commerce.
6. To organize and monitor international cooperation on electronic commerce.
Article 6. State management bodies for electronic commerce
1. Ministry of Trade shall be responsible before the Government for state management over electronic commerce.
2. Other ministries, ministerial or governmental bodies, provincial People’s Committees, within the
scope of their authority, shall cooperate with Ministry of Trade on the implementation of state
management over electronic commerce.
CHAPTER 2 - LEGAL RECOGNITION OF ELECTRONIC COMMUNICATIONS
Article 7. Legal validity
A communication shall not be denied validity or enforceability on the sole ground that it is in the form of
electronic communication.
Article 8. Legal effect as writing
Where the law requires that a communication should be in writing, that requirement is met by an electronic
communication if the information contained therein is accessible so as to be usable for subsequent
reference.
Article 9. Legal effect as original
1. Where the law requires that a communication should be made available or retained in its original
form, that requirement is met in relation to an electronic communication if:
(a) There exists a reliable assurance as to the integrity of the information it contains from the
time when it was first generated in its final form, as an electronic communication or otherwise; and
(b) The information it contains is capable of being displayed when needed.
2. The criteria for assessing integrity shall be whether the information has
remained complete and unaltered, apart from any change that arises in the normal course of communication, storage and display;
3. The standard of reliability required shall be assessed with regard to the purpose for which the information was generated and all the relevant circumstances.
Article 10. Legal effects of electronic signature
Where the law requires that a communication should be signed by a party, that requirement is met in
relation to an electronic communication if:
123
(a) A method is used to identify the party and to indicate that party’s approval of the information contained in the electronic communication; and
(b) The method used is reliable for the purpose for which the electronic communication was
generated or communicated, with regard to all the relevant circumstances.
CHAPTER 3 - ELECTRONIC COMMUNICATIONS IN COMMERCIAL ACTIVITIES
Article 11. Time and place of dispatch and receipt of electronic communications
1. The time of dispatch of an electronic communication is the time when it leaves an information
system under the control of the originator or of the party who sent it on behalf of the originator.
In case the electronic communication has not left an information system under the control of the
originator or of the party who sent it on behalf of the originator, the time when the electronic communication is received.
2. The time of receipt of an electronic communication is the time when it becomes capable of being retrieved by the addressee at an electronic address designated by the addressee. The time of
receipt of an electronic communication at another electronic address of the addressee is the time
when it becomes capable of being retrieved by the addressee at that address and the addressee
becomes aware that the electronic communication has been sent to that address.
An electronic communication is presumed to be capable of being retrieved by the addressee when it
reaches the addressee’s electronic address.
3. An electronic communication is deemed to be dispatched at the place where the originator has its
place of business and is deemed to be received at the place where the addressee has its place of
business.
4. Paragraph 2 of this article applies notwithstanding that the place where the information system
supporting an electronic address is located may be different from the place where the electronic
communication is deemed to be received under paragraph 3 of this article.
Article 12. Invitations to make offers
A proposal to conclude a contract made through electronic communications which is not addressed
to any specific party is to be considered as an invitation to make offers, unless it clearly indicates the
intention of the party making the proposal to be bound in case of acceptance.
Article 13. Use of automated message systems for contract formation
A contract formed by the interaction of an automated message system and a natural person, or by the
interaction of automated message systems, shall not be denied validity or enforceability on the sole
ground that no natural person reviewed or intervened in each of the individual actions carried out by the
automated message systems or the resulting contract.
Article 14. Availability of contract terms
A party offering goods or services through an information system that is generally accessible to persons
making use of information systems shall, for a personal period of time, make the electronic communications
or other relevant communications which contain the contract terms available to the other party in a way
that allows for their storage and use.
124
Article 15. Error in electronic communications
1. Where a natural person makes an input error in an electronic communication exchanged with the
automated message system of another party and the automated message system does not provide the person with an opportunity to correct the error, that person, or the party on whose behalf
that person was acting, has the right to withdraw the portion of the electronic communication in
which the input error was made if:
(a) The person, or the party on whose behalf that person was acting, notifies the other party
of the error as soon as possible after having learned of the error and indicates that he or she
made an error in the electronic communication; and
(b) The person, or the party on whose behalf that person was acting, has not used or received any material benefit or value from the goods or services, if any, received from the
other party.
2. Withdrawal of the portion of the electronic communication in which the input error was made
does not affect the application of any rule of law that may govern the consequences of any error
other than as provided for in paragraph 1.
CHAPTER 4 - PENALTY ON VIOLATIONS
Article 16. Acts of violations
1. To hinder or restrain the capacity of individuals and organizations in using electronic
communications.
2. To hinder or restrain the capacity of individuals and organizations in choosing electronic means
and technology to conduct commercial activities.
3. To illegally alter, erase, destroy, copy, disclose, move, forge, or deprive electronic communications
in part or in whole.
4. To intrude upon or destroy information systems used for electronic commerce.
5. To generate, send, transmit, receive, or process electronic communications for illegal purposes.
6. Other acts of violations related to the use of electronic communications as stipulated by law.
Article 17. Penalty on violations
1. Organizations violating regulations on the use of electronic communications in commercial activities are, according to the nature and level of violation, subject to administrative penalty, operation
suspension, or financial compensation for the damaged party.
2. Individuals violating regulations on the use of electronic communications in commercial activities
are, according to the nature and level of violation, subject to administrative penalty, criminal prosecution, or financial compensation for the damaged party.
CHAPTER 5 - IMPLEMENTATION
Article 18. Legal enforcement
This Decree comes into effect 15 days after its release on the Public Legal Bulletin. Previous regulations
counter to this Decree shall be annulled.
125
Article 19. Implementation
1. Ministry of Trade takes charge and coordinates with other ministries, ministry-level bodies to stipulate in details the use of electronic communications in particular commercial and commercial-related activities, so as to ensure compliance with this Decree and other existing legal texts.
2. Ministers, heads of ministry-level bodies, heads of governmental organizations, and Chairmen of
provincial People’s Committees are responsible for implementing this Decree.
ON BEHALF OF THE GOVERNMENT
PRIME MINISTER
(signed)
Phan Van Khai
126
APPENDIX B - OVERVIEW OF VIETNAM E-COMMERCE 2005
2005 was the last year of the stage whereby e-commerce was formed and legally acknowledged in Vietnam.
In 2005, the State agencies obviously took their active roles in building legal environment and activating
the supporting activities for enterprises in e-commerce applications. The enterprises have raised sense
of initiative in application e-commerce to enhance productivity and competitiveness in the increasingly
extensive globalization. Numbers of enterprises have invested in advanced technologies and taken
initiative in using new e-commerce transaction methods which deserves of promising future ahead.
The picture of Vietnam e-commerce 2005 could be depicted with the following prominent features.
1. Formulation of the legal framework for e-commerce
2005 was the first year in which State organizations succeeded in formulating critical policies and
legal documents for the development of e-commerce; most notably the Master Plan for E-commerce
Development in the 2006-2010 period, the Electronic Transaction Law, the revised Commercial Law, and
the revised Civil Code.
Various IT - related policies issued in 2005 encompass visions and measures to promote e-commerce
applications. In addition, several Laws approved by the National Assembly in 2005 have advanced
regulations that help consumate the necessary legal framework for e-commerce such as laws of property
rights, customs, and public procurement.
The issuance of these policies and legal documents is apparently the outcome of great efforts exercised
by State organizations in the recent years. However, these policies and legal documents were only initial
steps; further work needs to be done to build on this foundation and provide a perfect legal environment
for the development of e-commerce.
2. Blossom of supporting activities for e-commerce
Aside from formulating policies and legal documents, in 2005 State organizations also accelerated
supporting activities for e-commerce. Firstly, a number of public services related to e-commerce
have been launched. The pilot program of electronic customs procedures by Ministry of Finance was
regarded as a major progress in public service sector, which helped enterprises save time, cut cost and
reduce bureaucracy. In addition to improving the Electronic Visa Information System of textiles to the
United States, Ministry of Trade provided online services for garment exporting enterprises to look up
electronic visa information, that helped to increase predictability in their strategic planning and business
operation.
Secondly, several e-commerce websites set up by State organizations have come into operation. Ministry
of Trade opened Vietnam E-commerce Portal (ECVN) which help enterprises get used to B2B e-commerce
transactions. Ministry of Investment and Planning introduced the Government Tender website which
helped to enhance transparency and fair competition in goods and services supply to State organizations.
Ho Chi Minh Post and Telecommunication Service experimented e-commerce website supporting
business transactions of local businesses, etc.
127
Thirdly, the quality of the websites of many ministries, state organizations, socio-economic organizations,
and enterprises have been improved profoundly supplying diversified and update information.
Fourthly, a number of state agencies and other organizations carried out various supporting activities to
encourage and orient e-commerce development, most notable of which were the e-commerce website
ranking program, the prize award for outstanding e-commerce enterprises and products.
Finally, the organization structure of state organizations involved in ICT in general, and e-commerce
supporting activities in particular were significantly improved. For example, the Information Technology
Application Department and the Vietnam Computer Emergency Rescue Team have been established
under Ministry of Posts and Telecommunication, and the Hi-tech Crime Division established within
Ministry of Public Security.
3. E-commerce training in regular education at the university level
Along with improvement in social awareness, needs for e-commerce businesses have also been formed
and increased dramatically, that in turn heat up demand for corresponding human resources. In 2005, ecommerce training activities developed rapidly in both directions: regular training in universities and on
the job training in businesses. Many universities, colleges, and vocational schools have started to put ecommerce programs into their curriculums. The E-commerce Department has been established in several
universities such as University of Commerce, Foreign Trade University, etc. Hanoi University of Technology
has launched a Master Program in e-commerce. Ministry of Trade and Vietnam Chamber of Commerce
and Industry have taken lead in organizing e-commerce short-term courses for enterprises all over the
country.
Together with training, awareness raising activities related to e-commerce were also blooming in 2005
with the involvement of various press agencies.
4. Emergence and development of new e-commerce modes
2005 saw the formation and rapid development of several new e-commerce modes. While e-commerce
application through the most common media – the Internet – was slowly spreaded, participation in ecommerce using hi-tech personal devices such as mobile phones proved to be an effective alternative.
The services for downloading music and wallpaper, predicting results of sports games, voting for events
through mobile phones have drawn mass of customers for competitive advantages such as low cost, high
convenience and quick response to social tastes and demands.
Some other types of services such as data mining, news monitoring, and online music have been formed
and promised to yield great turnover in the coming years. Especially, the development of online games
services has been above expectations of both service providers and state management agencies,
presenting great challenges to the legal and policy system related to e-commerce. It appeared that the
state management agencies were still lagged behind in dealing with new business methods bred by the
rapid evolution of science and technology.
5. Imbalanced development of e-commerce forms
In the world, more than 90% of e-commerce value is attibuted to Business to Business (B2B) transaction;
Business to Consumer (B2C) and other transaction forms make up less than 10% of the total sum. Among
128
B2B transactions, a dominant portion of turnover comes from direct transactions between businesses via
information technology system which are synchronized and automated at different levels.
Even though 2005 has seen faster growth of B2B e-commerce transactions, the imbalanced development
of e-commerce forms was yet to be improved. In fact, B2B transactions in Vietnam are still at the elementary
level of searching for market information and business partners via e-mails or e-commerce websites.
Integrated supply systems among major businesses almost did not exist.
6. Less progress made in improving e-commerce infrastructure
While the inter-bank payment system has made much progress, electronic payment methods for B2C and
C2C transactions were still lagging behind in meeting the increasingly diversified demands of business
practice.
Another critical infrastructure for e-commerce transactions in large scale - the public key infrastructure
(PKI) - was also slow to be formed. Induced by business demand, many enterprises have taken initiative
to invest in PKI application. However, PKI infrastructure in Vietnam can not develop without more active
participation of the state organizations.
Electronic Data Interchange (EDI) is an essential means of e-commerce, particularly for B2B transactions;
but in 2005 no progress in EDI policy or application has been recorded in Vietnam. It is said to be an
ominous sign of infrastructure supporting e-commerce in the period 2006 – 2010.
In terms of cyber safety and security in e-transactions, progress has been made in 2005 as compared with
2004; nevertheless, this remains a big challenge of e-commerce development in the coming years.
Even though there were not many significant changes, telecommunications and the Internet infrastructure
have been constantly improved, making a good foundation for e-commerce development. Yet, it is
necessary to keep in mind that Vietnam is still ranked low in the world, both in terms of information
society index and e-commerce readiness.
129
Vietnam E-commerce Portal
MINISTRY OF TRADE
E - COMMERCE DEPARTMENT
21 Ngo Quyen Str., Hanoi, Vietnam * www.mot.gov.vn