NATIONAL ECONOMICS UNIVERSITY FALCUTY OF FOREIGN LANGUAGES ENGLISH FOR BUSINESS DEPARTMENTTHE REAL SITUATION OF IMPORTING CHINESE GOODS OF VIETNAMESE CUSTOMERS THROUGH ALIBABA CROSS-BORD
Introduction of Chipo Vietnam Joint Stock company
Chipo Vietnam Joint Stock company was established on Jannuary 18th 2017 under the business registration certificate no 01107711535, with the main objective of representing Vietnamese customers to transact bussiness with Chinese suppliers via Alibaba websites in keeping with their demands.
After over three years of operation, undergoing numorous difficulties and challengings the company has also established reputation as a leading enterprise in the currently emerging field of importing Chinese goods through Alibaba cross- national e-commerce websites It is obviously indicated that Chipo’s success completely depends upon the clients’ belief , which promotes the enterprise constantly improving its trading solutions effectively, providing competitive service quality in the market, optimizing the core values in each activity, which are: flexible, professional , superior technology and customer service.
Accordingly, Chipo Vietnam set out its mission to be the pioneer In providing purchasing services in the field of purchases through Alibaba's websites, accelerating the mutual long — term relationship with the existing partners and enlarging customer network in whole country Hereinafter comes the basic information about Chipo Vietnam JS company:
Trading name : Chipo Vietnam Joint Stock company
Head office : WTC online building, no.18 Tam Trinh street, Minh Khai ward, Hoang Mai district, Hanoi
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Sales Purchasing ne Human Technical Complaints Department Department - Financial Resource D
Chart 1 Chipo Vietnam Joint Stock company
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Chipo Vietnam Joint Stock company operates as a large scale, liability — sizeable firm, with more than 170 staff working in fours large cities including Hanoi, Ho Chi Minh,
Da Nang and Hai Phong The hierarchical structure encompasses a Board of Directors leading the entire structure, followed by several functional departments with particular tasks In the organization, although there are many different departments, performing different tasks and functions, they are united and focused in order to produce results for the defined goals of the company Generally, the entire system is rather streamlined, but achieving great efficiency and profitability
Board of directors includings CEO and COO holds the highest power in the company and has very defined roles and responsibilities of drawing up a strategic plan, and supervising and evaluating the business results The COO is considered as an efficient assistant of CEO It is elucidated that The Chief Operating Officer (COO) is the person who runs the organizational structure of the business with the role of designing the structure of the business, setting policies, culture and vision for the business The COO directly takes over in daily management activities because of the ensuing impact on its fiduciary responsibilities.
Board of managers has functions of implementing plans which are assigned by board of directors It means that managers contemplate how to gain mastery five basic functions: planning, organizing, staffing, leading and controlling.
Human resource department deals with issues related to employees such as human recruitment, training, development, compensation, communication, and administration Obviously, updating governmental policies regularly, simultaneously adjust the compatible company policies when in need is importance of the company in general and laborforce in particular.
Acounting-financial department addresses these financial-related issues. The accouting department is responsible for arranging internally statistical reports such as balance sheet, income statement, cash flow statement; managing the implementation of financial regulations and the use of capital in investment activities; proposing plans on changes in capital and asset structure corresponding to business tasks.
Purchasing Department takes responsibility for processing transactions with the Chinese suppliers The major tasks are receiving orders from the customer,contacting the Chinese manufacturers and negotiating price which makes
Nguyen Thi Thuy- 11165148 — Business English contribution to maximize the company’s profit in general as well as the customers’ benifits in particular. e Sale Department takes responsibilities of conducting market research to gain insights into the consumers and marketplace, making sales, growing your business and retaining existing customers Ultimately, the most important function of your sales department is maintaining relationships with your customers. e Complaints Department is responsible for tackling the problem relating the goods’ quality and quantity after customers’s hand. e Technical Department contributes its roles in the organizational structure through providing the infrastructure for this automation It's important to note that all of stages are processed automatically and quickly thanks to the support of IT department.
In recent year, The Chipo Vietnam Joint Stock company provides intermediary services to import Chinese goods from leading Chinese e-commerce websites including Taobao.com, 1688.com, JD, Tmall and so on for the consumption of domestic market Regarding line of business, the company’s main tasks are: e Finding a source of customers interested in shopping foreign products online via domestic e-commerce and social networking with the aim of stimulating the purchase behavior via cross-border commerce. e Finding and consulting sources of reputable wholesale products, original prices in China on the websites 1688.com, taobao.com, tmall.com e Negotiating with Chinese suppliers (Ordering marchandises, paying for orders, claiming if problems occur with goods)
THEORETICAL FRAMEWORK àẶẶ cv 10
Definition of Cross-Boder Electronic Commerce
Cross border e-commerce is a perfect combination of e-commerce and cross- border trade, with the oustanding tranfer of information technology and socio- economic, e-commerce almost breaks down economic barriers, which contribute to global economic growth Cross-national e-commerce is the fastest developing sector in the global economy, bridging the gap between suppliers and clients As defined from (Wang, 2014; Accdvisor, 2012), transactions with full support of using information and communication technology (ICT) made in different regions or countries is called cross-border e-commerce In another study conducted by E.Gomez el at (2014) showed that, cross- national e-commerce is considered as a new type of bussiness model of foreign trade which is a transactional entity belonging to divergent nations always accompanied with the digital In other words, through the Internet, local online consumers can use cross- border e- commerce (CBEC) as an online import channel to penetrate foreign product markets more easily Based on the definition of cross-border e-commerce from previous researchers, it was concluded that cross-border e-commerce resembles traditional international trade, but it becomes more perfect with the advanced assistance of Information of Technology
Characteristics of importing online through cross-border e-commerce 10
The development of cross-national e-commerce associates and has reciprocal effect with the growth of Information and Communication Technologies (ICT) It is likely that e-commerce as well as cross-border e-commerce in particular means the application of information technology to commercial activities, which boosts E-commerce grow up progressively Concurrently, the growth of cross-border e- commerce also promotes numerous fields in IT including professional hardware and software for e-commerce applications, payment service for e-commerce as well as needed boost to the manufacture of ICT areas, especially computers, telecomunication equipments and network equipments as well. e Characteristics: Cross-border e-commerce transactions are absolutely through Internet In traditional trade, all of participants from each side have to meet face to face to negotiate, exchange and sign contact in final On the
Nguyen Thi Thuy- 11165148 — Business English contrary, the transactions via cross-national e-commerce rely on the use of electronic means connected to global network, particularly via the internet, the parties involved in the transaction do not need to meet in person. e Scope of operation: In cross-border e-commerce market, there are at least three participants consisting of trading parties, network service suppliers and authentication agencies, which are considered as one of the most indispensable subjects to create an effective trading enviroment The main responsibilities of them are transferring and saving informations and data from trading parties, simultaneously, comfirming the informations’ accuracy of traders. e Time without limitation: parties involved in cross-national online trading can conduct transactions 24 hours and 7 days within 365 days wherever there are telecommunications networks and electronic means connected to these networks with high automation capabilities that help speed up the transaction process.
The importance of importing online through cross-border e-commerce 11
Nowadays, the cross-border e-commerce plays an absolutely crucial role in international trade for the reason that it's the fastest, most effective method, providing the best updates, taking advantages of all of sources and bringging participants convenience maximum It is clarified that the cross-border e- commerce fully support partakers in accessing a multifarious source of information relating to market Since then, cross-border e-commerce has helped the economy operate and develop many times faster Hereinafter are the benefits of cross-border e-commerce to assist import activities.
Not only developed countries but also devloping countries represent a market with enomous potentials for cross-border e-commerce As stated by the UNDP (2005), economically developing nations should grasp the opportunity to approach e- ecommerce market comprehensively as it will enhance their economic and social development, result in gains in commercial productivity, boost the level of domestic integration with international markets It is pointed out that import bussiness in general and import activities through cross-national e-commerce websites in particular nowadays also hold a certain position to the development of
Nguyen Thi Thuy- 11165148 — Business English national economy by virtue of below reasons Firstly, it promtly refills the insufficiency of the domestic market, keep demand-supply balance for domestic consumption as well as productivity Besides, as reported by the Vietnam Electronic Commerce Association, the number of Vietnam accounts on Alibaba is
500000 in 2016 with annual increase of 100000 additional accounts since then. Besides, Lurong Chen (2017) claimed that the remarkable increase in shopping online through cross- border ecommerce websites is to be explained in term of lack of diversification into domestic commodities It can be easy to show that foreign goods are more varied and more likely to meet domestic consumer’s demand. Finally, thanks to importing through the foreign e-commerce webites, the national enterprises as well as individuals have an opportunity to assimilate successfully the those field to improve and innovate the national e commerce market.
Shopping online through cross-national e-commerce websites benifits the consumer, hereinafter are several main advantages: e Shopping all places all the times: Nowadays, the concept of shopping online on foreign websites is becoming more and more socialized, the rate of Internet penetration is parallel to numerous opened services, which forms a completely new enviroment called “ virtual market” It means that the customers can sit down at their home and choose and conduct transactions through e- commerce websites in and out nation with the payment method via credit card, E-wallet or payment portrals as well “Jn cross-border online shopping, customers and vendors are not in a simultaneous time and space” (Mukherjee& Nath, 2007) Clearly, trading online via foreign websites make a transaction shorten time and geographic distance. Moreover, all of products attached nessesary information chains, files of images, video clips can satisfy the customer’s demand Therefore, it helps the customers save time without moving and finding the goods at real stores. e Offering a multitude of suppliers and kinds of product: This is an advantage that only the supermarkets can compete with, the number of goods that stores that businesses provide is easy to choose and is much richer than the traditional business model In fact, consumers spend a lot of time moving between stores and in stores also take a long time to select and search for a
Nguyen Thi Thuy- 11165148 — Business English product, with e-commerce this problem will completely overcome, no matter where in the world the consumer lives. e Offering the reasonable price and effective transaction method: As a result of various options, consumers can definitely choose a product that satisfies them, but the cost is not much more Moreover, because manufacturers save costs such as renting premises for opening stores, marketing, advertising and so on leading to the decrease in price, so e-commerce buyers will receive preferential prices than the traditional way of buying Orderers can pay by card or bank transfer or E-wallet to the supplier, in a way that the goods will be delivered to consumers more professionally and with better quality because consumers can still refuse to receive the goods when they find that the goods do not match the order Especially, through the internet, consumers select goods and services on a global scale, especially those goods that do not require tactile inspection including software products, games, books. e Sharing information quickly and easily: Online information is extremely rich and diverse with the aim of spreading widely which support customer access information quickly It means that it is accompanied by a collective spirit, sharing experiences for each other, because the Internet is an open form capable of connecting people in the form of social networks, club forums, members participating in shopping can get a comprehensve review of the goods as well as the reputation of the supplier. e Exempting purchase tax: In many countries, online business is exempt from purchase tax to change traditional consumer habits and stimulate online purchases.
Trading online through domestic e-commerce sites as well as foreign e-commerce sites also contributes to be of much benefits to the social. e Reducing travel time: E-commerce allows individuals to shop and work remotely at home, thus reducing traffic on the road as well as environmental pollution. e Offering public services for the convenience of customers: Public services such as public health, tax declaration, and education are conducted online at lower cost, easily and quickly.
Nguyen Thi Thuy- 11165148 — Business English e Enhancing community: E-commerce allows people in economically developing nations and provincial areas to access information as well as access to goods and services as well as with everyone on all over the globe,this was previously difficult to achieve.
Types of import via cross-border e-commerce - << <<<s+2 14
Currently, cross- border e-commerce trade is focused on two main types including direct purchase import and bonded import.
Direct purchase import is known as “order first, delivery later’ It means that an order is placed on a registered cross-border e-commerce website/platform. Immediately, the platform will send the record relating to the order, delivery, and payment to the customs after the order is transacted All sold products through transnational e-commerce channels must be pre-registered with the customs.
Customs duties and VAT are comparatively pondered payments to all most of foreign customers, which are accounted for at the time of dispatching from a warehouse (supplier) abroad through sending mail directly This will allow customs clearance more effectively before final delivery to the end consumer. Standard delivery time, from orders to customers received, for direct purchase import model is relatively rapid.
Bonded import is refered to “stock first, order later” model Bonded warehouse means an area of a warehouse or yard established on the territory, separates from the surrounding area to temporarily store to preserve or perform a number of services for goods from in and out the country The country shall put it into a warehouse under a bonded warehouse lease agreement signed between the bonded warehouse owner and the owner of the goods When the order is transacted on a registered e-commerce platform the vendor is ready for dispatch from the bonded warehouse, declaring customs, and delivering the commodities to the customer directly When the actual sale occurs, import duties and VAT are paid simultaneously.
Models of cross-border e-commerFC - Ặ S1 se 14
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B2B is the abbreviation for Business to Business, called E-commerce between businesses and companies.This is a commercial business model dealing directly with businesses You can simply understand: one business provides e-commerce solutions, the other uses that application to trade products.
With the B2B model, businesses always own their own purchasing process to save costs and time Moreover, this model provides management of supply chain from suppliers to businesses as well as between business and customers.
B2C e-commerce business model stands for Business to Customer, and is defined as a form of business from enterprise to customer All transactions are uncomplicated, individuals just accessing the Internet could buy goods for normal consumer purposes.
B2C model's customers are mainly individual consumers They need to shop on the Internet for their own purposes, so there is no additional transaction Sales businesses also do not have to negotiate between the two parties like the B2B model Because customers can read the terms, prices of the shop, and then decide to buy.This is a business model chosen by many businesses Because B2C does not require a high level of legal and negotiating nature However, the diversity of goods makes the competition between companies fierce Customers have more buying options before purchase decisions Moreover, “The B2C model is a broad model which also includes services travel services, online banking, and online health services and information” (Chaffey, 2009: 26; Yahia, 2005; Malhotra & Singh, 2009).
C2C is an abbreviation of the phrase Consumer To Consumer (roughly translated:Consumers to Consumers) As the name implies, C2C is a business model in which buyers and sellers are individuals Usually this transaction will be done in an online environment, through a third party, intermediary online sales platforms, or intermediary auction sites The benefit for buyers when joining this market is bidding on the online auction without paying any fee (Chaffey, 2009: 27; Moxon,2001).
Overview of Alibaba cross-border e-commerce websifes
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Alibaba (simplified Chinese: [iJ #421; pinyin:Alibaba Jítuán) started going into operation in 1999 with Alibaba.com, an English language marketplace for global trade The main purpose of establishment of Alibaba.com was to support small export sectors participating in manufacturing and trading, primarily located in China, to reach multicultural buyers Moreover, Alibaba basically serves as a match market and furnishes an economical and profitable flatform where traders from all over the world in reality can find approciate cross-bodered buyers and vice versa In 1999, Alibaba also launched a Chinese wholesale market for Chinese domestic trade among small businesses, now known as 1688.com This domestic platform has grown into a wholesale channel for merchants trading in their retail markets to source products The company then tapped into the retail end of the e- commerce market in 2003 with the consumer-to-consumer (C2C) marketplace Taobao (a Chinese term for “treasure hunt’), from which sprouted the business- toconsumer (B2C) platform Tmall and the e-payment tool Alipay, which processed online transactions e-commerce is a commercial activity with a global scale so a wide range of national and international laws and regulations on this area must be met Therefore, the Chinese government has issued a legal corridor on the quality standards of goods and services, regulations on prohibitions and being allowed to vary by country, regulations on industrial property, manufacturing copyrights , law on electronic signature, dispute resolution for electronic economic contract and so on Thanks to cross-border e-commerce, an enlarging number of small and medium-sized enterprises (SMEs) leverage opputinities as large enterprises to enter global market.
The head office of Alibaba is situated in Hangzhou in easter China and has four main marketplaces.The company’s English language international market (alibaba.com) functions as a intermediary linking exporters and importers from more than 240 nations and regions As known, a Chinese wholesale market for Chinese domestic trade among small businesses is also launched in 1999, now known as 1688.com This domestic platform has grown into a wholesale channel for traders trading in their retail markets for source products.
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In May 2003, Alibaba lauched Taobao, a wholly-owned subsidiary to enter the C2C market to compete directly eBay after eBay acquired Eachnet, the leading online auction organizer in China at the time, for $ 180 million la United States and become a major player in the consumer e-commerce market in China In response to eBay's expansion, Taobao supports free inventory for store owners as well as functions designed to meet the needs of local consumers, such as instant- messenging tool (Aliwangwang) to simulate face-to-face negotiation between sellers and buyers and authentication payment tool, Alipay As a result, Taobao has become a leader in the Chinese market within two years.
In April 2008, Taobao introduced independent web domian called Taobao Mall to distinguish the list of merchants, distributors or authorized brand owners fromTaobao C2C vendors Self-reinforcing Taobao Mall is a supplier of good quality brands to Chinese customers In November 2010, Taobao Mall lauched the new domain name, namely Tmall.com, and promoted vertical merchandise and improved shopping experience.
Import process via Alibaba cross-border e-commeree
Depending on the purpose of importing the commodity of wholesalers, retailers as well as indivisuals, the customers make a selection for the goods that gratify their demand regarding pattern, quality, quantity and price as well As to wholesalers and retailers, accompanied with the products’pattern and quality, the haggling price is placed a high priority on their order It is also a reason why 1688.com is establised to meet these criteria When it comes to Taobao.com and Tmall.com, consumers, especially individuals familiarize with an assortment of their products being tied in with the affordable price After registering an account on the system of the company, with the oustanding features of means of electronic platforms and mobile app which link to Alibaba websties, whether the customers understand Chines or not can completely search with images or with assistance of translatation tools.
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After agreement is finally reached between suppliers and customer, the customer nomally put down a 70%-100% deposit of the entire value, which firmly rests on kinds of commodity Hereinafter is the formula for each order’s expenditure:
Product's price = ( real price on the websites+ China shipping fee) x exchange rate + Vietnam shipping fee + purchasing fee + surcharge (if any)
+ Real price on websites: is publicly listed on Alibaba Exchange
+ China shipping fee: is a kind of fee from the seller to China warehouse of the import company which the customers are under obligation to pay fully for shipping unit.
+ Exchange rate is definied as the value of china currency (RMB) for the purpose of conversion to another such as Vietnam one (VND).
+ Vietnam shipping fee: is also a compulsory shipping fee the customer have fully resonspility to pay for.
+ Purchasing fee: account for 1% to 3% total amount of real price
+ Surcharge: is an extra amount of money that you must pay in addition to the usual price Normally this supplimentary charge in relation to inspecting, woodenning and packaging the goods, which has been willing to delivery.
At this stage, the staffs of purchasing department will receive the order, exchange and negotiate with the seller Affer agreement is completely finished, the accounting department fulfills their obligation to implement payment for goods in advance In fact, Alibaba e-commerce websites just only affirm the Chinese ubgitious payment method via E-wallet ( Alipay) and Credit card As known, credit card useage remains low in Vietnam and cash-on-delivery (COD) continues to be preferred method of payment This is a reason why such companies, Chipo for example is on behaft of customer to pay to the provider legally and contractually. During the merchandise- importing process, if any problem is arising from China suppliers, employees will contact the customers and vice versa.
Step 4: Chartering the means of transportation
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A single company engaging in this filed has a China-situated warehouse Afterv arrived at the Chinese warehouse, the goods will be packed and shipped to Vietnam By using other routes, not through the border gate, the carrier will help the goods get across the border easily, without many papers and complicated procedures At this time, all goods are gathered by the carrier on the truck, then the carrier named in the name to make all the papers and declarations to let the goods go through Such companies function as a import quota with low tariff, uncomplicated procedure and a few quota declarations subject to cross-boder cost possibaly importing without invoices of foreign trade contracts like official quota.
Step 5: Submitting a complaint (if any)
The purchaser is entitled to make claims to suppliers, shipping agent for compensation if there is any issue relating to insufficient consigment, inferior quality, imprecise packaging, damage and so on.
In order to operate a good system, the Chipo Vietnam Joint Stock company always prioritizes customer benefits, so throughout the process of importing goods from alibaba sites, all parts of the Chipo Vietnam Joint Stock company must combine to perform their duties consistently to avoid the unexpected risks of goods and financial aspect as well as supply the best outstanding services.
Factors affecting import activities via cross-border e-commerce
It remains to be seen whether trading following traditional method or through domestic e-commerce websites in general or across national —border e-commerce istes in particular, the decision to purchase is influenced tremendously by a wide range of factors which have strongly impact on the booming cross-border e- commerce It is proved that a significant number of researches are conducted with the aim of investigating determinants impacting the trading via cross-boder commerce Factors are taken in consideration the disparate levels: macro and micro The macro perspective is the particular way of scrutinizing the elements at the national level, while mecro aspect is mainly linking with the viewpoints of customer, especially certain psychological factors are regularly concentrated on. 2.8.1 In macro perspectives
Obviously, influencing factors in macro perspective emanate from the technical, economic, legal and social aspects.
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At first glance, whether the transaction through cross-country e-commerce is conducted sucessfully or not depends vastly on the laws and policies Wang and his collaborators (2015) pointed out that Custom, Industry, Commerce, Tax and other departments implement CBEC regulatory activities in compliance with the laws and policies to maintain interest of market participants and stimulate the CBEC development It is indisputable that logistics, cross-border payment, custom clearance and other activities in CBEC obeying the laws and policies directly or indirectly are given priorities by buyers and vendors as well Futher, Zhu and Thatcher (2010) also gave full consideration to specific indicators to judge policy and legal invironment Goverment preferential policy is considered as a facilitating determinant for the development of CBEC, which formidably impacts on the customer behavior Third-party holds a crucial position in cross-national online trading to maintain customer trust (Doney et al., 1997) As fully comprehened that laws and policies are mediating factors in assuring market particpants of theirs support regarding to unexpected problems during the transaction.
Technically, numerous researchers mainly mentioned the establishment of infrastruture and the availablity of applications The technical advancement of CBEC logistics, information communications, payments as well as data analysis greatly bettering the speed, safety, effectiveness and convenience of CBEC impacts remarkably the purchase decision Regarding the cross-national logistics, Wang at el (2015) showed that the level of electronic clearance and application of technology is a noticed determinants affacting to performance of international logistics Besides, thanks to technogical assistance in cross-border e-commerce, online information makes contribution to estimate perceived vendor reputation (Hor-Meyll, 2012) Simultaneously, Cody-Allen and Kishore (2006) pointed out that “information and system related to characteristics leads to formation of belief" Apparently, there is a similarity in mentionaboved researches on technology elements in transnational e-commerce that supports foreign customers in accessing information and conducting transactions effectively without the geographic distance and time.
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In terms of economy, key factors impacting on CBEC encompass GDP per capita, income, fiscal policies, monetary, and exchange rate Lee J (2017) claimed that GDP and income are deemed to be control variables, which most of economic indicators are measured Farhoomad (2000) noted that fiscal policies, monetary and exchange rate which are considered as indicators to be influential in international trade and cross-national e-commerce growth.
Socially speaking, determinants having a strong repercussions for purchase intention via cross-national e-commerce comprise language and Internet literacy level Farhoomand and his collaborators (2000) claimed that linguistic divergencies are great barriers to purchase behavior on foreign websites. Notwithstanding such great obstacle, the customer still go through with oustanding support of translatation tools and Google translate as a prime example Regardless of Internet literacy level, Leong C et al (2016) carried out a research namely “the emergence of self-organizing e-commerce ecosystems in remote villages of china” In their study, they stated that ”he level of Internet literacy is represented by literacy levels, IT skills levels and education levels” Clearly, people today are highly educated and have more access to information technology, so it's not too difficult to learn about information technology In short, the customer’s attitude forwards language barrier and internet literacy are relevant to the level of customer behavioral intention.
When considering the influencing factors in micro perspectives, a considerable number of studies carried out particularly focus on customer trust and customer benefits.
Since the process of online tranding via cross-national e-commerce mainly involves working with the multinational partners, belief in each other is a decisive factor finally reaching a compromise Although cross-border online shopping is still in the online shopping category, it has a more complex environment than domestic online shopping, stemming from the increase of the uncertainty of the different edges (Safari, 2012) In online transactions, the absence of insurance is a worrying obstacle and customers ensure that they are easily deceived (Gefen &
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Straub, 2000) Howerver, when third part’s interference is identified, the customer trust is gradually reinforced Regardless of cross-border online shopping, there are various researches carried out by western scholars, they have proved that country of origin, overseas retailers, and the third part have positive effect on customer beliefs in cross-border online shopping (Doney et al., 1998, Safari, 2012). Jarvenpaa and Kollock (1999) concurrently are pointed out in previous studies that trust can directly heighten a customer’s purchase behavior simultaneously lessen a customer’s anticipated risk Researchers have linked trust with belief with characteristics such as honesty, kindness, empathy, skills, ability and anticipation.
In terms of e-business, Cody-Allen and Kishore (2006) defined self-beliefs as
"understood beliefs" or the extent to which e-commerce users find them trustworthy In conclusion, trust impacts postively on the customer’s perceived value of shopping on foreign websites.
Another elements that merits consideration is customer benifits regarding price and product exclusiveness According to “Seize the cross-border oppotunity”, selecting competitive price and product uniqueness as variants that symbolize customer cognized benifits of cross-border shopping online (Forester, 2014). Regardless of whether shopping offline or online, the perceived price is considered as one of unquestionable cues given a priority in a customer’s purchase decision (Chiang and Dholakio, 2003) In the fact that price competitiveness means offering lower, comparable, and better price simultaneously lowing taxes and exchange rates Furthermore, the total cost of purchasing on foreign e-commerce is less than that of the same products in domestic market It is also a reason why customer’s behavioral intention through foreign e-commerce sites is strengthened strongly As proved that the price competitiveness has a postive impact on the customer’s perceived value of shopping on a foreign website Regardless of product exclusiveness, F.Tong (2015) claimed that numerous products which have quantity limitation or have no ability to buy in domestic market might be prevalent in other countries In other words, the multifarious commodity categories in foreign websites can meet customers’ demand fully To sum up the literature, price competiveness and produce exclusiveness are positively related to customer’s choice of online shopping channel.
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In conclusion, when penetrating the emerging market, each company must take notice of inviromental forces in macro perspectives and micro prospertives to comprehend fully what opportunies or threats are, simultaneously map out feasible strategic plans to deal with continious challenges in volatile bussiness environment The available studies and reports are precious references providing profound insights about trading online in foreign websites Whereas the majority of studies mentioned were carried out before 2017, the author provides a personal perspective in import business via cross-border e-commerce during 2017 — 2019.
In other words, all assessment and recommendations given must be appropriate and adaptive to current situations of local and international trade context, ensuring the sustainable development of Chipo Vietnam in general, and the improvement of import operation via cross-national e-commerce in specific.
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This section provides a comprehensive understanding of the methodology to conduct the research After that, the availability of information obtained from numerous previous sources would support in evaluation of the performance of import activities via cross-border e-commerce in Chipo Vietnam Joint Stock company in terms of import turnover, structure of goods, and customer network from 2017 to 2019 Through these findings, the author will point out the company’s achievements and obstacles followed by an explanation for these shortomings.
One of the crucial stages for conducting research is data collection This study obtained useful information through both primary and secondary sources.
In the first place, an in-depth interview with Mrs Dang Thi Tuyet Nga, CEO of Chipo Vietnam Joint Stock Company, and several employees in functional departments of the company were implemented to gather the primary data The main purpose of this qualitative method is obtaining personal views about the actual situation of the import process through the Alibaba e-commerce websites of the Vietnamese people at the company in the past few years As a result, a myriad of questions has been composed to accomplishing the above goals.
The first questions the author asked Mrs.Nga are “what achievements has Chipo Vietnam achieved in recent years?, What are the major challenges that the company must fulfill?” She was then asked to provide information on organizational direction in the next period, especially from 2020 to 2025 Based on this, the author is able to offer several recommendations and suggestions for bolstering cross-border purchases across Alibabas e-commerce platforms. Furthermore, the director was also emboldened to explicit their ideas on administrative support to enhance import activities in businesses The last three questions are posed to some Chipo Vietnam employees who are directly involved in the stages of the transaction process At first, the author wondered if each
Nguyen Thi Thuy- 11165148 — Business English employee had any complaints about existing import operations in the company. They can then evaluate their own qualifications to the job requirements and learn how employees' competencies and attitudes can be leveraged to heighten the operation performance in general and import process in particular.
The second source compiled for this research drives from available studies, commercial webpages,e-journals, books, , and forums, and so forth Besides, the historical establishment, development as well as business activities, including purchase process reliance on raw materials are fully gathered through Chipo Vietnam’s annual reports These are existing sources for the author to gain an all- inclusive knowlelge of what the company has reached so far.
Real situation of import activities via Alibaba e-commrce between 2017
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Figure 3: Import turnover of Chipo Vietnam Joint Stock company from 2017 to 2019
The chart depicts the import turnover of Chipo Vietnam Joint Stock Company in the period of 2017 to 2019 In 2018, the total value of Chipo Vietnam's customer imported goods from Alibaba, soared nearly 270% over the same period of 2017. This trend remains throughout the following year and has earned over 228 billion by the end of 2019.
The growth rate of import value is very important for the author when analyzing import activities through the Alibaba import channel of customers from the company At first, it is undeniable that the demand for Vietnamese goods and services has been increasing continuously in recent years Therefore, this will encourage businesses to expand their markets and access a richer source of customers from all provinces The decision to expand its operation in 2018 focused more on enlarging the customer network in the provinces Moreover, when the company imports a large volume of goods from Chinese merchants, this is seen as an advantage for Chipo Vietnam to have greater access to the network of suppliers synonymous with strengthening their relationship with them, thus taking advantage of a number of incentives related to discounted sales, payment terms, commodity policies such as return and exchange policies.
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Figure 4: Value of imported goods from Alibaba cross-border e-commerce from 2017 to 2019
(Million lh Growth | (Million | Growth
The chart above depicts the main imported categories from Alibaba's e-commerce.
Major product groups include equipment, machinery, electronics, appliances, textiles, and garments In particular, electrical appliances, textiles, and garments are always at the top of the import turnover Textiles and garments account for the largest proportion of the total import turnover, specifically in 2018, the textile industry reached 30.2%, equivalent to approximately 38 billion VND, and the number has a sharp increase in 2019 to reach nearly 88 billion, 6 times more than in 2017 As observed, home appliances and electronics have steadily increased over the years, by 2019, home appliances reached nearly 55 billion, electronics nearly 61 billion is equivalent to 26.7% This proves that the demand for these commodity groups is increasing tremenously while the domestic market is not really enough to meet the consumption level Other categories such as foods, cosmetics are also gradually penetrating the Vietnamese consumer goods market.
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Specifically, Chipo Vietnam imported over VND 5 billion in 2017, but in 2019, there was an obvious growth of VND 16 billion This revealed that domestic Chinese goods to Vietnamese consumers were not so many stigmas as before, did Vietnamese consumers have a different perception on domestic Chinese goods.
Figure 5: Network of domestic customer in 4 cities (2017-2019)
HaNoi, HaiPhong, DaNang, and HoChiMinh
With respect to Chipo Vietnam, expanding and maintaining the customer network are always the two priority goals that are considered as the two main factors affecting the reputation and import activities of the company Generally, during the period time of 3 years of operation, Chipo Vietnam has established a certain number of customers which is clearly shown in the annual increase figure In the first year of operation, the number of customers was relatively low at just over
2000, mainly in two big cities, Hanoi and Ho Chi Minh For any company in this emerging field, it commences operations in these two big cities for the following reasons Firstly, It is an indisputable fact that information technology in these two pivotal cities is developing greatly, so the level of accessing information, as well as the level of Internet literacy, reached a high level, which stimulates purchase culture via the Internet tremendously Secondly, these two cities are considered as the two key economic cities in the country, so the consumption of goods and
Nguyen Thi Thuy- 11165148 — Business English services is always at the highest level After one year of operation, observing the mainstream of purchasing through transnational e-commerce channels as well as the awareness of customers about cross-country e-commerce, the board of managers decided to broaden the customer network in 2 other cities including Danang and Haiphong With an enthusiastic and experienced sales team, the number of customers has soared 5 time, specifically Hanoi (6570), HoChiMinh(5321), DaNang (768), and HaiPhong (980) It can be clearly recognized that Chipo Vietnam has achieved significant success in multiplying sharply the number of customers in cities, specifically Hanoi(11209), Ho Chi Minh( 9879), DaNang(2190), and HaiPhong(1700) It is undeniable that maintaining a close relationship with clients would ensure the company import- related issues, hence boosting import operations dramatically.
Figure 6: The value of transactions processed in 3 websites Taobao.com,
Value | Share | Value | Share | Growth | value | Share Growth rate rate
The chart above illustrates the number of transactions conducted by Chipo Vietnam through e-commerce websites Alibaba from 2017 to 2019 In 2019, it reached nearly 108 billion VND, 5.6 times higher than that in 2017 (19,067 million VND) In 2018 alone, the volume of imports from 1688.com accounted for 54.08%
Nguyen Thi Thuy- 11165148 — Business English of the total imported goods, which clearly shows a significant increase in Chipo's bulk customers The preferential policies applied by 1688.com to customers in terms of quantity and price are the reasons why Vietnamese merchants choose 1688.com as a potential market to import Similarly, the two retail channels encompassing Taobao.com and Tmall.com have a continuous increase in annual orders It is obivious that in 2019, the total value of orders imported from taobao.com amounted to approximately 78 billion VND, simultaneously, increase 3.4 times compared to 2017 This proves that Vietnamese consumers are on the rise in purchasing behavior with Chinese domestic goods Likewise, Tmall.com is known as a retail center with world-famous brands By 2019, the total value of orders reached more than 42 billion, more than half with Taobao.com in the same period With this development, Alibaba's future cross-border e-commerce will increase continuously and promises to be a potential market for Vietnamese consumers.
Import method c1 11119 11T ng re 33
Chipo Vietnam has applied the method of direct import by quota, so the import procedure is uncomplicated, saving time and transportation costs Specifically, with this method, the company just only presents a declaration of quota without invoices, payment documents, foreign trade contract like through official quota, simultaneously, subject to the cross-border fee according to government regulations Chipo Vietnam's transportation team will collect commodities into trucks, then declare the general cargo, still have to pay taxes, but the payable tax will be less than the normal official import, thereby reducing purchasing costs for domestic customers.
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RECOMMENDATIONS TO ENHANCE OPERATION
General company Orientation Ăằ eeenee teense eeeeeetetseetaes 39
In the context of the 4.0 Revolution, cross-border e-commerce is quickly becoming a core element of the global economy and the inevitable trend that no country can stand outside Cross-border E-commerce supports consumers to shop without geographic distance and controlled and uncontrolled barriers, simultaneously, become "global consumers” When Vietnam commits to implement international economic agreements as well as participates in linking national organizations to establish a legal framework for imported goods through cross-country electronic trading platform Local businesses in general and Chipo Vietnam in particular also realizes this opportunity to intensify promising market penetration For Chipo Vietnam, the board of directors set goals for the next 5 years These main goals are: e Maintain and develop a service management system, the most important stages in the management chain are providing customer service before and after and implementing transaction with Chinese suppliers. e Strengthen and broaden customer relationships, always listen, catch the customer's wishes, and receive feedback to further improve the quality of service. e Enhance the qualifications of managers and staff by planning and implementing short and long-term training courses with the aim of providing the necessary skills in a comprehensive manner for the job.
Nguyen Thi Thuy- 11165148 — Business English e Become a leading enterprise in the field of purchasing services from the
Alibaba e-commerce platform. e Draw up indispensable programs consisting of advertisement, marketing for
Specific orientation towards providing purchase activities via Y//,.),.00000n0n0n8Ẻ886 e
The period between 2020 and 2025 promises to be a wonderful time to develop cross-border trade Chipo Vietnam also provided specific guidance to enhance the company's purchase activities via cross-national e-commerce in the coming years, including: e Continue to consult and support customers comprehensively in looking for reputable vendors with high-quality products, reasonable prices, guaranteed transaction time. e Strengthen preferential policies on services such as reducing purchase fees, shipping fees, and free purchase fee festivals to stimulate customer's purchase habits. e Fully invest in the construction of separate warehouses and other facilities such as a truck system to support the transport of goods to the provinces. e Enlarge the quality of services provided to customers, enhance the qualifications of operators, and organize practical training courses. e Ensure the sustainable development of import turnover and determine
Recommendations for the company ::ccccceeeceeceeeeeneeeeeeeaees 40
4.2.1 Reducing over — dependence onto third party
Once Chipo Vietnam sets the future direction as a reliable service provider to import goods in large quantities, in other words, it focuses on attracting Vietnamese wholesalers It is noticeable that improving the quality of facilities is a prerequisite Due to the lack of facilities that do not allow the management company to operate correctly, it is time for managers to draw up a plan to build an organizational system of transporting goods from the border gate to the cities. Moreover, the gradual investment in the truck system to support import activities should also be considered with a view to minimizing operating costs and actively grasping business opportunities.
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4.2.2 Expanding markets both intensive and extensive
To boost the flow of imports via cross-border e-commerce, in the next few years, the company may launch a series of preferential policies for existing customers For example, based on the total annual order price of a customer, the company should consider giving a membership level classification to customers For example, customers with a total order value of over 5 billion a year, customers will receive preferential policies such as reduced purchase fees at 1%, shipping costs 10 VND per 1 kg of goods.
In addition, market expansion in provinces and other cities is worth considering, however, to do so, a market research team should focus on (1) analyzing economic situations, culture, infrastructure in the regions; (2) finding potential sources of customers, especially wholesalers; (3) identifying the market expansion strategy of potential competitors who also tend to multiply the market in the provincial areas The objective of these activities is in accordance with the financial capacity and technical requirements of the company.
4.2.3 Improve the professional skills of employees
Currently, the current human resources that perform transactions of the company are quite experienced, well qualified, and dynamic However, because the Board of Directors has set out goals to expand the market in the coming years, Chipo Vietnam can recruit many younger employees to handle the increasing number of orders Also, the Complaints department should be strengthened in terms of the number of employees to handle complaints from customers on time.
Accordingly, employees should be motivated to improve their qualifications in the fields of technology, foreign languages, law, and so forth Because formal education or training is expensive, companies may consider paying part of their education as a skill. Specifically, when it comes to language, Chinese is an important communication tool during the transaction process because the goods to be purchased are categorized into many groups of goods, for example, as for the garment industry, the purchasing team requires basic knowledge as well as the capacity of specialized absorbing specialized linguistics to support for the buying process Besides, to expedite the purchasing process, employees must learn to become familiar with computer software, as information technology plays an essential role Therefore, the company should invest in technical facilites as well as computer network installation, ensuring that all data is
Nguyen Thi Thuy- 11165148 — Business English available In addition, the technical department is always in need of improving the system, overcoming problems related to ordering systems, as well as payment systems. 4.2.4 Execute the government’s laws and regulations
The activity of transporting goods across the border along trails that do not go directly through border gates are acts of violating Article 10 of Decree No 112/2014 / ND-CP on activities of trading goods across the border of traders This is considered as a form of tax evasion, which should be closely monitored by the competent authorities Instead of selecting to transport through the trails in any other way, the company may opt for an alternative method of pairing the goods with small value with other transport units,thereby ensuring the timely delivery of goods to consumers.
Recommendation for the government :::ccccceesecceeeesteeeeeeeaees 42
4.3.1 Perfecting the legal system and customs procedures
According to current regulations, e-commerce activities are under the management of the Ministry of Industry and Trade and the Ministry of Finance However, up to now, Vietnam has no specific regulations on goods exported and imported according to e- commerce transactions that perform management like normal import and export goods. Therefore, goods exported and imported under e-commerce transactions must carry out specialized inspection procedures, customs procedures, and apply tax policies similar to those for normally imported goods The common difficulty in customs clearance is that the number of small low-value shipments increases rapidly, so it is necessary to have appropriate resources to ensure processing time but still ensure the fast clearance speed of goods; as well as to solve issues including lack of information, incorrect declarations, no compliance records of buyers because buyers are irregular objects. Furthermore, it is difficult to prevent banned, restricted import, export, and smuggled goods due to the small number of goods sent while the quality of information and previous data on goods is limited.
Besides, Minister Tran Tuan Anh has discussed with the General Department of Customs and the Ministry of Trade in China about the congestion of export goods at the border between Vietnam and China since the beginning of April 2020 The two sides agreed on the need to take measures to reduce the customs clearance pressure and said that they would direct the local authorities and customs forces at the border gates to take measures to reduce the pressure on cargo congestion.
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Therefore, strengthening the management of cross-border e-commerce activities, completing the legal basis to ensure the rights and obligations for both domestic consumers and export individuals and enterprises when participating in the activities. The strict management of cross-border online trade is a necessary and urgent task nowadays.
It is a fact that outdated infrastructure and inadequate logistics facilities have prevented businesses in Vietnam from achieving high performance in terms of import procedures. This can be illustrated from real-life situations of inland congested road traffic extending from the border gate to warehouses, containers stuck at overloaded borders, etc., which are needed for policymakers to outline a master plan to promote adequate infrastructure investment at national borders to facilitate international transactions to run in such a smooth manner.
4.3.3 Sealing the gap of high — quality manpower
The increasing trend of integration and application of science and technology will transform the labor market, opening up opportunities for new industries and jobs requiring less labor and quality of labor in One problem that businesses have been concerned about lately is that the labor market lacks a large number of well-qualified workforce, despite too many unemployed graduates In most cases, most candidates do not cultivate and accumulate basic knowledge and experience in international transactions In other words, they are not actively seeking market information. Obviously, this is a disadvantage for young workers.
One option for universities and colleges is to cooperate with former companies and organizations such as VCCI, VIAC, WB, WTO, etc., specializing in dealing with cross- border trade transactions, as well as research carefully international trade policies. Therefore, workers will constantly keep up with the latest information on the job market and complete themselves with the necessary skills and professional skills Therefore, the government should take measures to coordinate with colleges and universities to support more young people in which economic prosperity is grown due to experienced young human resources.
Nguyen Thi Thuy- 11165148 — Business English
On the basis of trade liberalization and global integration with the rapid development of the Internet, cross-border e-commerce helps consumers become global consumers With the specific context of Vietnam, as the demand for goods is increasing, the domestic market can not meet domestic consumption and face difficulties in supplement, thereby, engaging in import activities through the cross- country e-commerce platforms is increasingly promoted.
Especially, after four years of establishment and development, understanding and grasping as essential needs of Vietnamese consumers, Chipo Vietnam has affirmed its position as a reliable service provider in supporting import activities via Alibaba's e-commerce flatform without any intermediaries It can be concluded that the strategic plan of the company has been partially successful so that the total revenue increases significantly after only a very short time.
However, Chipo Vietnam still faces significant limitations that stem from macro and micro perspectives Regardless of macro perspectives, it consists of technical, economic, political, and social aspects, while micro perspectives particularly focus on customer trust and customer benefits All these aspects also partly show that they are tremendously related to customer’s choice of internationally online shopping channel At the same time, it also greatly affects the company's revenue over the years.
Based on personal observations, perceptions, and experiences gained during the three-month internship, the author then made some recommendations for both the company and the government to facilitate company development over the coming years With all the above suggestions, the author hopes that Chipo Vietnam will boost its import activities on a larger scale in the near future and prove itself as one of the leading service providers to meet consumers' demand in Vietnam.
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1 For the CEO and COO of Chipo Vietnam Joint Stock company s* what achievements has Chipo Vietnam achieved in recent years?, s* What are the major challenges that the company must fulfill? s* What is the orientation of the company in the next five years? s* To what extent do you evaluate the importance of governance support to the development of import activities via cross-border e-commerce?
2 For the staff of Chipo Vietnam Joint Stock company s*ằ What are the weakness of import activities via transnational e-commerce that Chipo Vietnam has fallen to solve?
* > ~ Are you sure that your qualifications meet the job requirements?
L2 C “,°® From your point of view, how can the company improve staffs qualifications and attitudes?
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Sales Purchasing Í l & Human Technical Complaints Department Department - Financial Resource Department
Chart 1 Chipo Vietnam Joint Stock company’s
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Figure 1: Total bussiness capital of Chipo Vietnam Joint Stock company from 2017 to 2019
No | Indicators Share Value Share Value Share
Figure 2: Business result of Chipo Vietnam Joint Stock company between 2017 and 2019
_—~ Value Value Growth Value Growth rate rate
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Figure 3: Import turnover of Chipo Vietnam Joint Stock company
Figure 4: Value of imported goods from Alibaba cross-border e-commerce from 2017 to 2019
Value Value Growth Value Growth (Million (Million rate (Million rate