Luận văn thạc sĩ UEB e commerce development in agricultural trade promotion in vietnam

VIETNAM NATIONAL UNIVERSITY, HANOI

HANOI SCHOOL OF BUSINESS

DOAN TRAN NHAN

E-COMMERCE DEVELOPMENT IN AGRICULTURAL TRADE

PROMOTION IN VIETNAM.

MASTER OF BUSINESS ADMINISTRATION THESIS

Hanoi, 2012

VIETNAM NATIONAL UNIVERSITY, HANOI

HANOI SCHOOL OF BUSINESS

DOAN TRAN NHAN

E-COMMERCE DEVELOPMENT IN AGRICULTURAL TRADE

PROMOTION IN VIETNAM.

Major: Business Administration

Code: 60 34 05

MASTER OF BUSINESS ADMINISTRATION THESIS

Supervisor:

1. Dr. Tran Doan Kim

2. Mr. Ha Nguyen, MBA

Hanoi, 2012

ACKNOWLEDGEMENTS

Electronic commerce (E-commerce) is a new field and showing great role in trade

promotion, products trading through the global Internet. E-commerce can help

businesses reduce costs because they can introduce to consumers about products

and services through its own Website, frequently contact with their customers and

learn about customer needs via E-mail, and conduct transactions directly with

customers online. Moreover, businesses can attract the large customer because E￾commerce is not limited by geography. The targeted consumers are not only

domestic but also foreigners.

Due to benefits of E-commerce, now many companies over the world apply this

model in their business operation. In Vietnam, according to E-commerce Report

2010 of the Ministry of Industry and Trade (MoIT), among more than 3400

enterprises surveyed are almost 100% of businesses applied E-commerce in

different levels. The application of E- commerce has brought efficiency to the

enterprise, especially in access to customers and operations management and sales.

However, purchasing through E-commerce websites only popular for some kinds of

goods and services such as airline tickets, electronics, cell phones, computers,

books, tours, hotels, cosmetic, etc...

Trade promotion is the series of activities to promote the sale of the business in

general and target market. Since the traditional trade promotion activities are

geographically limited, higher costs and taking long time, so the application of E￾commerce seems to overcome such drawbacks.

In Vietnam agriculture, the E-commerce application is concerned, facilitated and

clearly oriented by the Government agencies. Besides the traditional trade

promotion activities are being applied in agriculture such as surveys, trade fairs and

exhibitions ... E-commerce will create a new promotion method that is simple,

convenient, fast and save cost. In the present, there are some Agri-businesses

applying E-commerce in marketing activities and business of their products.

Moreover, understanding the current trend of IT application, there are some

i

professional websites have built and they operate as the trading platform for

Vietnam and foreign agricultural products. However, only a few businesses can

achieve success from these activities and many websites have built with boring

content, out of dated information, and the websites cannot attract customers to visit

and deal with suppliers in the website.

During the MBA course at the HSB, I received the enthusiastic support from

lecturers and guidance on methods of studying and working. Moreover, all of

lecturers create good conditions to help me constantly expand, improve knowledge

learned in practice.

In the process of working in Trade Promotion Center for Agriculture (Agritrade), I

have discovered and proposed research project “E-Commerce development in

agricultural trade promotion in Vietnam” and developed this subject into my

thesis. During the implementation of the subject, I have received much help from

the lecturers, leaders, and staff of Agritrade. Which I particularly thank:

Lecturer: Ha Nguyen who has dedicated to guide me in the implementation process

of this project.

Mr. Nguyen Van Thang - Director of Agritrade who has created good conditions for

me to complete this thesis, the research and given many ideas for my thesis.

In the process of completing this thesis, by the terms subjective and objective can

you also flawed. So I hope to receive guidance and comments from all lecturers.

I sincerely thank you!

ii

ABSTRACT

E-COMMERCE DEVELOPMENT IN AGRICULTURAL TRADE PROMOTION

IN VIETNAM.

Doan Tran Nhan

MBA Candidate, 2009 – 2011

School of Business – Vietnam National University, Hanoi

Supervisors: Dr. Tran Doan Kim

Ha Nguyen, MBA

May 2012, 93 pages

Subject “E-Commerce development in agricultural trade promotion in Vietnam” is

based on actual duties of the author at the Trade Promotion Center for Agriculture

(Agritrade). This is a unit under the Ministry of Agriculture and Rural Development

and they responsible for planning and implementation of trade promotion programs

for Vietnam agricultural sector; consulting agricultural policies on the export

promotion and trade development; and supporting businesses in developing

markets.

Based on the concept of E-commerce and trade promotion, the macro environment

analysis; the real situation of E-commerce development in Vietnam, and operation

of Agritrade, author has proposed the solutions of applying suitable E-commerce

model for trade promotion activities in agricultural sector, thereby helping to

promote agricultural enterprise’s image, expanding market and searching for a

sustainable business contracts, moreover, helping Agritrade implementation more

successful their political duties.

Structure of this thesis including:

- Chapter 1: Theoretical framework.

- Chapter 2: Background and Real situation of Agricultural trade promotion of

AGRITRADE.

- Chapter 3: Conclusion and the proposal solution of E-commerce development

for Agritrade.

iii

TÓM TẮT

PHÁT TRIỂN THƢƠNG MẠI ĐIỆN TỬ TRONG XÚC TIẾN THƢƠNG MẠI

NÔNG NGHIỆP TẠI VIỆT NAM.

Đoàn Trần Nhân

Khoa Quản trị Kinh doanh – Đại học Quốc gia Hà Nội

Hƣớng dẫn: Ts. Trần Đoàn Kim

ThS Hà Nguyên

Tháng 5 năm 2012, 93 trang

Đề tài “Phát triển thươ ng maị điêṇ tửtrong xúc tiến thương maị nông nghiêpp̣ taị

Việt Nam” đƣợc thực hiện dựa trên thực tế nhiệm vụ công tác của tác giả tại Trung

tâm Xúc tiến thƣơng mại Nông nghiệp (Agritrade). Đây là một đơn vị trực thuộc Bộ

Nông nghiệp và Phát triển nông thôn có nhiệm vụ lập kế hoạch và thực hiện các

chƣơng trình xúc tiến thƣơng mại cho ngành nông nghiệp Việt Nam; tƣ vấn xây

dựng các chính sách nông nghiệp về xúc tiến xuất khẩu và phát triển thƣơng mại;

hỗ trợ các doanh nghiệp trong phát triển thị trƣờng.

Dựa trên các khái niệm về thƣơng mại điện tử và xúc tiến thƣơng mại; các phân

tích môi trƣờng vĩ mô; thực trạng phát triển thƣơng mại điện tử tại Việt Nam; và

hoạt động của Agritrade, tác giả đã đề xuất giải pháp ứng dụng thƣơng mại điện tử

phù hợp cho hoạt động xúc tiến thƣơng mại ngành nông nghiệp, qua đó giúp cho

các doanh nghiệp nông nghiệp quảng bá hình ảnh, mở rộng thị trƣờng và tìm kiếm

các hợp đồng kinh doanh bền vững, đồng thời giúp Agritrade thực hiện thành công

hơn các nhiệm vụ chính trị của mình. Kết cấu của đề tài bao gồm:

- Chƣơng 1: Cơ sở lý luận.

- Chƣơng 2: Bối cảnh và thực trạng hoạt động xúc tiến thƣơng mại nông

nghiệp của AGRITRADE.

- Chƣơng 3: Kết luận và đề xuất giải pháp phát triển thƣơng mại điện tử tại

Agritrade.

iv

TABLE OF CONTENTS

ACKNOWLEDGEMENTS....................................................................................................i

ABSTRACT..........................................................................................................................iii

TÓM TẮT.............................................................................................................................iv

TABLE OF CONTENTS.......................................................................................................v

LIST OF ABBREVIATIONS..............................................................................................vii

LIST OF TABLES, FIGURES, CHARTS, DRAWINGS...................................................viii

INTRODUCTION..................................................................................................................1

1. The imperative of subject...........................................................................................1

2. Establish the main research subject............................................................................3

3. Research’s objectives.................................................................................................3

4. Research scope...........................................................................................................3

5. Delimitation of the research’s contents......................................................................4

5.1. The basic elements of E-commerce model.............................................................4

5.2. Assign content to develop E-commerce model for Agritrade.................................5

6. Research methods.......................................................................................................5

6.1. Data collection methods..........................................................................................5

6.2. Data analysis methods.............................................................................................7

CHAPTER 1: THEORETICAL FRAMEWORK..................................................................8

1.1. E-commerce.............................................................................................................8

1.1.1. The concept of E-commerce................................................................................8

1.1.2. Characteristics of E-commerce..........................................................................10

1.2. The formation of E-commerce..............................................................................10

1.2.1. The reasons of E-commerce...............................................................................10

1.2.2. The formation of E-commerce...........................................................................11

1.3. The situation of E-commerce development in Vietnam........................................12

1.4. The operation forms and E-commerce transactions..............................................14

1.4.1. The forms of E-commerce activities..................................................................14

1.4.2 Transaction forms of E-commerce......................................................................17

1.5. Benefits of E-commerce for businesses.................................................................22

1.5.1. E-commerce reduces costs.................................................................................22

1.5.2. Impact on enterprise architecture.......................................................................24

1.6. The E-commerce requirements..............................................................................25

1.6.1. Technological Infrastructure..............................................................................25

1.6.2. Human Infrastructure.........................................................................................26

1.6.3. Security and safety.............................................................................................26

1.6.4. Automatic Financial payment system................................................................27

1.6.5. Consumer Protection..........................................................................................28

1.6.6. Economic and legal infrastructure.....................................................................28

1.7. Definition and content of Trade promotion...........................................................29

1.7.1. Definition:..........................................................................................................29

1.7.2. The purposes of trade promotion.......................................................................30

1.7.3. Types of Trade Promotions................................................................................31

1.8. Trade Promotion in E-commerce...........................................................................32

v

1.9. The difference of E-commerce applications in agricultural trade promotion........33

CHAPTER 2: BACKGROUND AND REAL SITUATION OF AGRICULTURAL

PRODUCTS PROMOTION OF AGRITRADE..................................................................34

2.1. Overall assessment of domestic market for Agricultural product.........................34

2.2. Overall assessment of agricultural trade promotion activity of Agritrade.............38

2.2.1. Overview of Trade Promotion Center for Agriculture (Agritrade)....................38

2.2.2. Agritrade’s main missions:.................................................................................40

2.2.3. Recent years’ Main Activities:...........................................................................42

2.2.4. Overview of agricultural trade promotion activities of Agritrade.....................43

2.3. Assessing the impact of external environmental factors to E-commerce

application at Agritrade....................................................................................................46

2.3.1. Impact of economic environment......................................................................46

2.3.2. Impact of political legal environment................................................................50

2.3.3. Impact of socio-cultural environment................................................................51

2.3.4. Infrastructure and Internet services for E-commerce.........................................52

2.3.5. Competitors........................................................................................................55

2.3.6. Customers..........................................................................................................57

2.3.7. Human resources for E-commerce.....................................................................59

2.4. Assessing the impact of internal environmental factors to the E-Commerce

applications in trade promotion activities of Agritrade....................................................61

2.4.1. Impact of human resources................................................................................61

2.4.2. Impact of financial resources.............................................................................62

2.4.3. Impact of technology infrastructure...................................................................63

2.5. Analysis the results of survey and discussions......................................................63

2.5.1. The results of survey..........................................................................................63

2.5.2. Results of expert interviews...............................................................................75

CHAPTER 3: CONCLUSIONS AND THE PROPOSAL SOLUTION OF E-COMMERCE

DEVELOPMENT FOR AGRITRADE................................................................................77

3.1. The conclusions and findings through the research process..................................77

3.1.1. The achievements and limitations of Agritrade.................................................77

3.1.2. The findings of the research process..................................................................79

3.2. Orientation and perspective of development of Agritrade in the future................80

3.2.1. Development orientation of Agritrade...............................................................80

3.2.2. Agritrade’s views on the E-commerce application............................................81

3.3. Proposal solutions of deploying E-commerce application in Agritrade................81

3.3.1. Group of Human Resource solutions.................................................................81

3.3.2. Solutions related to infrastructure and technology............................................82

3.3.3. Solutions related to business processes..............................................................85

3.3.4. Solutions related to electronic marketing promotion.........................................87

3.3.5. The other solutions:............................................................................................89

CONCLUSION....................................................................................................................91

LIST OF REFERENCES.....................................................................................................94

vi

LIST OF ABBREVIATIONS

ARPANET

Agritrade

APEC

B2B

B2C

C2C

E – commerce

ECM

EDI

GSO

IT

MARD

MoIT

MRO

UNCITRAL

VAN

VECITA

WTO

Advanced Research Projects Agency Network

Trade Promotion Center for Agriculture

Asia-Pacific Economic Cooperation

Business – to – Business

Business – to – Consumer

Consumer – to – Consumer

Electronic Commerce

Enterprise content management

Electronic Data Interchange

General Statistics Office Of Vietnam

Information Technology

Ministry of Agriculture and Rural Development

Ministry of Industry and Trade

Maintenance, repair and operation.

United Nations Commission on International Trade Law

Value Added Network

Vietnam E-Commerce and Information Technology Agency

World trade Organization

vii

LIST OF TABLES, FIGURES, CHARTS, DRAWINGS

Tables

Table 0.1

The basic elements of E-commerce model for agricultural

trade promotion

Table 2.1 Vietnam Rice production and exporting (2000 – 2009)

Table 2.2 Domestic consumption of cashew nut (1995-2010)

Table 2.3 East Asia and the pacific: GDP growth projections

Table 2.4

The reason for not participating in online purchases of

households in Hanoi in 2010

Table 2.5 Survey summarizing

Table 2.6 Summary of survey results (Part 1):

Table 2.7 Summary of survey results (Part 2)

Table 2.8

Evaluation of Agritrade’s employees about necessary

level of contents of E-commerce application

Table 2.9 Summary of survey results (Consumers)

Table 2.10 Summary of survey results (Suppliers)

Evaluation of Agritrade’s customers (consumers and

Table 2.11 suppliers) about necessary level of E-commerce

application

Evaluation of Agritrade’s customers (consumers and

Table 2.12 suppliers) about necessary level of contents of E￾commerce application

Charts

Chart 2.1 Organization structure of Agritrade

viii

Figures

Figure 1.1 Models of E-commerce transactions

Figure 2.1 GDP quarterly growth from 2008 – 2010

Figure 2.2 Monthly CPI development in 2010

Evaluation of enterprises of obstacles to e-commerce

Figure 2.3

application

Figure 2.4 Number of computers in enterprises through recent years

Page 18

Page 47

Page 48

Page 52

Page 53

Figure 2.5

Figure 2.6

Figure 2.7

F

i

g

u

r

e

2

.

8

M

e

t

h

o

d

s

o

f

I

n

t

e

r

n

e

t

a

c

cess

of

enterp

rises

in

2009

Number of E￾commerce

training schools

between 2008

Figure

2.9

and 2010

Figur

e 2.10

The

propo

rtion

of E￾Com

merce

schoo

ls by

level

2.11 Ent

erp

rises’ IT and e-commerce training methods for employees through recent years

Figure 2.12 Ability to achieve the target set for trade promotion activities of traditional methods.

Figure 2.13 Evaluation of Agritrade’s employees on whether

to apply E-commerce in agricultural trade promotion.

Figure 2.14 The E-commerce model to apply

Figure 2.15 The most important factor when apply E￾commerce

Figure 2.16 Evaluation of Agritrade’s

consumers on whether to apply E-commerce in agricultural trade promotion

Figure 2.17 Evaluation willing level of

Agritrade’s consumers to participate in

E-commerce website

Page

55

Page

59

Page

60

Page

60

Page

68

Page

68

Page

69

Page

69

Page

71

Page

73

ix

INTRODUCTION

1. The imperative of subject

Internet was born as a turning point in communications history of mankind and

plays more important role in all activities of man. Experienced two boom in 1986,

1991 to date, the Internet has brought humanity to overcome many limitations of

space and time. Also, dependent on preeminent and universal primacy of Internet, it

has quickly applied in many fields, especially economic activities and trade. Since

then, the term Electric Commerce (E-commerce) was born. And today, the E￾commerce has become a global trend, the rapid development, the motivation to help

the world economy forward.

In developed countries, E-commerce transactions through other forms of B2B, B2C,

or C2C has become very popular, becoming the new consumption habits, the

proportion of E-commerce transactions compared to traditional trading constantly

increasing. With agricultural and food products manufacturing and trading sectors,

the application of E-commerce in the distribution of products to help customers

access to product quickly, and gives the company huge revenue such as

alibaba.com, japonshop.com...

In Vietnam, the E-commerce is in the process of formation and has taken huge

strides in recent years. According to the E-commerce report 2009 of the Ministry of

Industry and Trade (MoIT): “Along with the recent rapid development of Internet

and e-commerce, forms of trading via the Internet gradually developed and became

popular to a segment of consumers, especially office workers and students in big

cities.

The most popular form of trading via the Internet was the sale and purchase of

goods and services on e-commerce websites. So far, many enterprises have sold

their goods and services via e-commerce websites, especially enterprises in sectors

of aviation, tourism, general supermarket...”1

With the situation as on the development, sale and purchase of goods and services

online has become a real trend, and certainly there will be strong growth in the

1Viet Nam E-Commerce Report 2009, Page vi.

1