6 Reasons Vietnamese E-Commerce Sites Fail

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Vietnamese e-commerce is set to be worth $10 billion by 2020. So why is it that around eight out of ten online stores fail within the first twenty four months? In this post we take a  look at what the important factors are in ensuring that your business succeeds in this highly competitive market.

1. Lack of Innovation

For your e-commerce site to succeed innovation is key. You need to provide a reason for consumers to purchase from your site over buying products from a competitor’s store. There is such a wealth of e-commerce merchants, big and small available to everyone online these days, customers need to see value in your product.

In addition, online shopping is different from shopping at an actual brick and mortar store. Customers can research and compare products from different retailers quickly and easily, and access reviews from other customers. Therefore, differentiating your products from your competitors whilst focusing on high quality is key.
One of Vietnam’s most innovative e-commerce stores is Tiki. They have built up and earned customer trust through their product offerings and building their own fulfillment and logistics systems, giving customers a reason to keep coming back.

2. Lack of product focus in a cluttered competitive market place

Accept that you will never be able to please everyone. Offering a wealth of products to suit everyone’s needs will not result in more sales but will dilute your brand and your message will be lost. Instead, do something and do it well. Find your niche, create an identity and become an expert in it. Being a leader in one thing will heighten customer trust and repeat sales.

TOP MOT is an example of an e-commerce site who are doing something different in the market. They are following a flash sales business model, and are the first website in Vietnam to do so, which therefore allows them to stand out in the market.

3. Poor customer service

It can take years to build a reputation but only 5 minutes to destroy it. Not only do your products need to be of high quality but your customer service does too, so make sure that you invest in sufficient resources for your customer services team.

 Patience and careful planning are key to creating a sustainable business. Put in the time to map out long term strategies aimed at providing excellent customer service and great products to your shoppers over a long period. Without this, there will be no repeat buyers to cover sales costs which will ultimately lead to failure.
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4.Poor Cash Flow

It is not the size of your budget that is important to the success of your e-commerce company, it’s how you manage it. Spending too much on stock and not enough on marketing can leave you drowning in stock but with no one to buy it. Balance is key. Grow your database as the wider your network, the more customers you can reach through social media and other low cost marketing campaigns. The more customers you reach the more sales you will have.

5. Poor Branding and a Difficult to Navigate Website

Create a website that will impress. If your website is dated, hard to use and ugly you can say goodbye to customers and sales. Your website is your business and must speak to your target audience. These days there are so many platforms and e-commerce solutions to make your online store fantastic so get the professionals in and get the basics right. Think speed, checkout process, covering all the payment options and high quality product photos. At the heart of this must be a laser – focus on user experience. Many e-commerce businesses have seen fantastic results from hiring UX designers to lead this effort.

6. Not Getting Enough Traffic

Do your research. Targeted traffic is key to a successful e-commerce store. Without traffic, nobody is seeing your website and if nobody is seeing it then nobody is buying anything. Invest in effective marketing strategies and platforms to ensure the success of your online store.

Other ways to drive traffic are through writing blogs, adverts, leading social media campaigns and SEO good practices. The good news is these needn’t cost you a pretty penny. There are many apps and blogs offering tips and advice from those with experience. Learn from the best. Look to your competitors and those who have suffered failures to work out what will work for you and what will make you stand out and succeed.

There is no one size fits all approach to succeeding in e-commerce, and e-commerce businesses take time to grow. But in a rapidly growing market the competition is fierce so covering the basics and being innovative and standing out from the crowd are incredibly important.

Join us at Seamless Vietnam on the 6th and 7th of September to find out more about how to build and scale a successful e-commerce business and learn from those who have succeeded in the Vietnamese market.

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