E commerce logistics in vietnam the reality and solutions

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - NGUYỄN VĂN THỊNH E-COMMERCE LOGISTICS IN VIETNAM THE REALITY AND SOLUTIONS LOGISTIC TRONG THƯƠNG MẠI ĐIỆN TỬ Ở VIỆT NAM: THỰC TRẠNG VÀ GIẢI PHÁP LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2018 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - NGUYỄN VĂN THỊNH E-COMMERCE LOGISTICS IN VIETNAM THE REALITY AND SOLUTIONS LOGISTIC TRONG THƯƠNG MẠI ĐIỆN TỬ Ở VIỆT NAM: THỰC TRẠNG VÀ GIẢI PHÁP Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: TS BÙI QUANG HƯNG Hà Nội - 2018 DECLARATION The author confirms that the research outcome in of this thesis is the result of author‟s independent work during study and research period, and it is not yet published in other‟s research and article The other‟s research results and documentation (such as extractions, tables, figures, formulas and other document) used in the thesis are cited properly, and the permission (if required) is given Plagiarism in this Thesis will not be tolerated by The author is responsible in front of theLaws and Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration Date: December 11, 2017 ACKNOWLEDGEMENT I have gained huge knowledge, skills and insights from my MBA course The course raises my capacity of administration and management up to the next level I am now very confident in my position of management I would like to extend my sincerest thanks and appreciation to all those who have helped me makde this Thesis to be possible First of all, I would like to express my deepest and sincerest gratitude to my supervisor, Dr Bui Quang Hung for his useful comments, remarks and engagement during my process of doing this master Master Tthesis I would like to give my sincere thanks tocustomers who have purchased and used the services of logistics businesses, in my survey, who have willingly spent their precious time joining the interviews Sincere thanks are extended to the Hanoi School of Business and Management (HSB) - Vietnam National University for equipping me with huge knowledge and skills through various interesting and practical subjects I also would like to thanks my classmates for their friendship and reciprocal encouragement to make our class time to become unforgettable time Lastly, I would like to give my great thanks to my family who have been always standingby me during for the past two years, and encourages encouraging me to keep moving from the beginning of my study Formatted: Space After: pt This page is intendedly left plank E-COMMERCE LOGISTICS IN VIETNAM THE REALITY AND SOLUTIONS E-Commerce logistics in Vietnam The reality and solutions Summary of the results The result of the thesis is to provide the solutions of logistics for e-commerce in Vietnam Study on the general situation of logistics and logistics in e-commerce in Vietnam Propose Proposing solutions (infrastructure of transport, technology and policies) related to logistics is to support E-commerce development Applicability in practice E-commerce is a growing field in the world, as the trend is irreversible However, in Vietnam there are many obstacles to the development of e-commerce and the biggest barrier now is the logistics (logistics for e-commerce) The thesis studiesy on the ongoing issues at the big e-commerce companies in Vietnam and around the world, opportunities and challenges in the coming time to provide practical solutions to overcome these exist to be able to support Vietnam ecommerce development Comment [THP1]: Khơng có vị ngữ (nghiên cứu tình tình trạng chung Logistics Ecommerce Logistics để làm gì? TABLE OF CONTENTS LIST OF TABLES i LIST OF FIGURE ii FOREWORD 1 Problem of statement Literature review Research objectives 3.1 General objective 3.2 Detail objectives 4 Research subjects 5 Research scope Research methodology 6.1 Data collection methods 6.2 Data processing methods Research structure CHAPTER 1: THEORETICAL FRAMEWORK ON E-COMMERCE AND LOGISTICS IN E-COMMERCE 1.1 E-commerce 1.1.1 Concept 1.1.2 Components of e-Commerce 1.1.3 Ecommerce models 11 1.1.4 The role and benefits of e-Commerce 12 1.2 Logistics in e-commerce 16 1.2.1 General concept 16 1.2.2 Components of Logistics in e-commerce 16 1.3 Factors influencing logistics in e-commerce 19 1.3.1 Macro Factor 19 1.3.2 Subjective factors 20 CHAPTER 2: LOGISTICS STATUS IN E-COMMERCE OF THE WORLD AND VIETNAM 23 2.1 Logistics Status in E-Commerce of the World 23 2.1.1 Research at Amazon 23 2.1.2 Research in Wal-Mart 29 2.1.3 Overall evaluation of logistics solutions in e-commerce in the world 34 2.2 The status of logistic in Viet Nam 35 2.2.1 Research at Sendo.vn 35 2.2.2 Research at Tiki.vn 43 2.2.3 Analyzing the influence of factors on logistic behavior in e-commerce49 2.2.4 Customer survey 55 2.2.5 Summary of SWOT Matrix 61 CHAPTER 3: SOLUTIONS TO COMPLETE LOGISTICS IN E-COMMERCE IN VIETNAM 64 3.1 Logistics operations development direction in Vietnam e-commerce sector 64 3.2 The proposed solutions for Logistics activities in the EC in Vietnam 65 3.2.1 proposed solutions to business 66 3.2.2 Recommendations to the State 69 REFERENCES 72 APPENDIX 74 Survey Questions 74 LIST OF ACRONYMS APEC Asia-Pacific Economic Cooperation B2B Business-to-business B2C Business-to-consumer B2G Business-to-Government C2C Consumer-to-consumer C2G Customer to Government CPFR Collaborative Planning, Forecasting and Replenishment EDI Electronic data interchange POS Point of Sale 10 SMS Short Message Services 11 VND Viet Nam Dong LIST OF TABLES Table 1.1: E-commerce models 11 Table 2.1: Amazon's refund policy 29 Table 2.2: Service prices in the city on Shipchung.vn 38 Table 2.3: Prices in interprovincial 40 Table 2.4: Return Policy of Sendo.vn 41 Table 2.5: Refund processing at Sendo.vn 42 Table 2.6: Order processing capacity 45 Table 2.7: Delivery fee and order processing at Tiki.vn 46 Table 2.8: Return goods policies of Tiki.vn 47 Table 2.9 : Customer survey results 55 Table 2.10: Customer survey results 57 Table 2.11: Customer survey results on transportation activities 59 Table 2.12 : Customer survey results on Return shipping 60 i The order processing process is simple, easy to operate for customers The number of orders processed is large Inventory management is increasingly modernized to help ship quickly to the shipping unit Transport is quite convenient, customers easy access to products due to low transportation costs and reasonable transportation policy E-commerce companies have policies to protect the interests of customers who buy goods with provisions on refunds when not meet the requirements + Weaknesses Businesses still use email tools, support tools such as Viber, WhatsApp, Skype, Facebook Messenger little application Enterprises still focus on developing hardware infrastructure, the cost of software development investment low proportion makes e-commerce logistics is not effective Most of enterprises not have ecommerce labors, the level of technology application in e-commerce logistics is limited Order confirmation time and inventory time is quite long due to the long waiting time of the supplier as well as shipping unit Inventory management has not applied bar code technology, identify goods The transport process takes a lot of time and is often delayed compared to the plan set out on the website sales Refund process, product return takes a lot of time And the customer's benefits are not fully guaranteed when the product is only replaced and refunded with the consent of the seller After evaluating the strengths, weaknesses, opportunities as well as challenges in e-commerce logistics activities in Vietnamese enterprises, the composer of the Swot SWOT matrix is as follows: 62 Strength Weakness Level of application of information technology in high enterprises Support tools such as Viber, WhatsApp, Skype, Facebook Messenger Formatted: Space Before: pt, After: pt, Line spacing: Multiple 1.4 li, Don't keep with next, Don't keep lines together Formatted: Space After: pt, Line spacing: Multiple 1.4 li Enterprises increasingly focus on are rarely applied in the business investment, procurement, equipment and The low software development cost application of information technology in makes e-commerce logistics e-commerce logistics less effective Order processing process simple, easy The level of technology adoption in eto manipulate for customers The number commerce logistics is still limited of orders processed is large Order confirmation time and inventory Inventory management is increasingly time take time modernized Convenient transportation Inventory management not applied bar transportation, costs, low code technology, identification of goods reasonable The transportation process takes time transportation policy and is often late compared to the plan on The protection of the interests of the website sales customers who buy goods is focused on The refund process, product return is the provisions on the return of goods not effective when the product is replaced and refunded with the consent of the seller Opportunity Challenge The legal and political system is quite The policy system is not complete adequate, the legal policies are adjusted, Regulations on information on mobile and revising continuously guaranteed telecommunication network; regulations Technological infrastructure Formatted: None, Indent: First line: cm, Space After: pt, Line spacing: Multiple 1.4 li, Don't keep with next Formatted: Space After: pt, Line spacing: Multiple 1.4 li Formatted: Space Before: pt, After: pt, Line spacing: Multiple 1.4 li, Don't keep with next, Don't keep lines together is on information safety and security on the increasingly improved to ensure the Internet, regulations on domain name online connection between enterprises and dispute is not resolved thoroughly customers IT infrastructure does not guarantee the safety of customer transactions Formatted: None, Indent: First line: cm, Space After: pt, Line spacing: Multiple 1.4 li, Don't keep with next 63 CHAPTER 3: SOLUTIONS TO COMPLETE LOGISTICS IN E-COMMERCE IN VIETNAM 3.1 Logistics operations development direction in Vietnam e-commerce sector In the coming time, logistics activities in electronic commerce in Vietnam will follow the directions: - Offers high speed, high quality and wide range of telecommunications and internet services for enterprises as well as clients to participate in the buying and selling on the electronic trading platform in the country - The future development direction focuses on investment and develop in both hardware and software infrastructure to support the development of logistics service in order to maximize the advantages of the strategic geographical position of each area The development of regional and international logistics centre, is the first important link in the chain of logistics service of the region of South East with large logistics center of Hanoi, Hcmc HCMC, Dong Nai, Ba Ria Vung Tau Provinceprovince - Make e commerce logistics service become high value industry in the commercial and services industry structure, associated with the domestic trade sector with electronic commerce Striving to 2020, most enterprises have the ability to provide the 3PL, 4PL service levels and up to the year 2025 level on 5PL level; Established Logistics service business association to create e-commerce to create coherence, mutual support and enhancing the competitiveness of enterprises: - Raise awareness of the business about the nature, importance of e-business as well as the deployment method of logistics in electronic commerce - Build the appropriate strategy to implement electronic commerce and logistics of e-commerce This business strategy should clearly define the objects and the steps to achieve these objects The select of network service providers for business also have very important meaning - Continue to implement the activities of the training and fostering of business and logistics electronic commerce knowledge, updating the knowledge and 64 skills of modern business and exploit the capabilities of information technology to serves the business‟s operation - Continue to invest in design, encryption products and services in an appropriate way to be able to introduce and execute consistently, clearly transaction On the basis of a database and the capacity to deliver the goods, pertinent business services needed to build a plan to participate in e-business and follow that plan in a appropriate way Comment [A7]: Font chữ to 65 3.2 The proposed solutions for Logistics activities in the EC in Vietnam 3.2.1 Proposed solutions to business 3.2.1.1 Improve the process for ordering and processing of orders of business Currently, EC enterprises in the order processing method our country is with each fairly complete and product of the reasonable but business should take the change and shorten the time of processing the order Current customers can order through the form: online or through the phone Enterprises need to navigate their clients to choose ordering via Internet Enterprises should navigate the customers towards thewebsite, create the habit of ordering through Internet as well as the use of other services such as payment, promotion and To this, enterprises need, first and foremost, to review and shorten the order process through Internet Then they should reduce the order conditions for customers and help customers put many items at once 3.2.1.2 Improve warehouse management Warehouse management in electronic commerce logistics activities include: warehouse network settings, select warehouse location (number, scale), the design and installation of the equipment inventory; organize the import, storage, storage of the goods; perform the work books, statistics related to the warehouse business E-commerce businesses should be oriented to buildt warehouse system in the model of bonded warehouse combined Cross-docking Perform the sort, aggregate, bar code stickers for the goods directly at the warehouse, then distributed to each retail store more convenient Moderate the warehouse by using modern equipment to enhance operational efficiency and service quality The equipment needed includes: - Conveyor system for conveying goods: goods transported in storage areas will not have to use direct labor; the moving goods will be conveyed by the conveyor system Thus, saving labor and saving labor cost and increases the ability to transport goods in large quantities and faster speed, ensuring the safety of goods in the warehouse 66 - Forklifts: As an indispensable means in warehouses, however, forklift systems in enterprises are still weak, with low tonnage; enterprises need to invest in modern forklifts such as automatic forklifts Larger, fast moving and equipped with management software forlifts which directly connected to the warehouse management center, will help operators have accurate information about the cargo, the place of loading and unloading of goods conveniently - Upgrading warehouse-shelving system to support large-scale goods Besides, warehouse should be equipped with bar code technology and bar code reader With this technology, the company can control the goods in the store easily 3.2.1.3 Improve the transportation There are two forms of transportation that e-commerce businesses can use are either outsourced transport or self-transport When the business itself transports, it is necessary to invest in transportation staff and transport vehicles, supporting tools Optimize transportation costs by focusing on passengers on routes and point-to-point transport Enterprises should link at least with a professional shipping partner to meet the orders in the remote and orders in the provinces and cities across the country Link with reputable shipping partners, who has competitive prices to transport goods will create trust with customers 3.2.1.4 Investment to improve, upgrade and apply of modern technology For successful logistics operations in e-commerce businesses, enterprises must pay special attention to the application of information technology systems The application of current technology in e-commerce businesses should be divided into two phases: - Phase 1: Completing the internal information system (Intranet) as well as the information system in each functional unit (Technical, accounting, marketing, ), information system at each stage in the chain provision of supplies (warehouses, yards, transport, ) and the connection of information between organizations, sections and stages To apply computerization in the operation of enterprises, to install software for business activities, standardize databases to create the basis in the logistics information system 67 - Phase 2: Connect external information systems in two ways: Method 1: Using the Internet is a trend that e-commerce companies in the world are aiming as an indispensable tool in business Method 2: Electronic data interchange (EDI) This system allows the exchange of information and data from the computer through the computers in a system EDI require expensive investment but is very convenient and high security EDI is really useful for business in data exchange between stores, distribution agents in the enterprise's Logistics system 3.2.1.5 Improve the human resources To improve human resources, companies should gradually improve professional skills, foreign languages, ability to apply technology of staff This is a very important factor that is vital for businesses in the international economic integration process when the competition becomes very acute The quality of human resources is reflected in two main factors: the managerial level of the senior management and the professional level of the employees Managers must have the vision, leadership and decision-making capabilities to help business thrive Therefore, improving the level of human resources will be the main factor to improve the efficiency of logistics operations in e-commerce Possible solutions include: - Send young talented and enthusiastic staff to further training in professional skills, foreign languages, technological ability - When recruiting employees, the selection criteria must be selected right from the beginning of the recruitment process, only the employees who meet the criteria of the enterprise to meet the work assigned by the company - To adopt commendation and reward policies for officials and employees, if they have recorded outstanding achievements or disciplines if they fail to carry out the work on schedule, thus affecting the prestige of the enterprise - Regularly updating new knowledge for employees in the fields of logistics and law in the country related to commercial operations As professional staff, more professional will help businesses reduce the cost outside the flow, build a reputable brand 68 3.2.2 Recommendations to the State 3.2.2.1 Improve legal environment Government should develop policies on information safety and protection, consumer protection law, intellectual property law, etc., to ensure the practicality of ecommerce activities, thereby creating consumer confidence In particular, government should develop and reform laws, institutions and regulate the interests of focal entities or brokers between technology and users It is essential that new directions are introduced to revise regulatory and remove barriers to e-commerce development Standards must be flexible to be innovative and meet future requirements It is important to set up confidentiality regulations that protect the interests of all parties as well as control the fulfillment of their obligations under undocumented transactions and persons with whom they are not facing each other Transaction tax issues need to be addressed comprehensively Therefore, government agencies should have the appropriate taxation mechanism to encourage the operation of enterprises on the Internet and increase the budget for the state -Government should build a reasonable corridor and legal framework; change and standardize regulations related to e-commerce logistics 2005 Commercial Law refers to logistics business for the first time, however, this law is not clear where the law does not clarify that logistics is a continuous chain In addition, the latest Decree 140/2007 / ND-CP detailing the Commercial Law on logistics business Although legal changes have been made to regulate this activity, the State still needs to provide a standard legal framework in the Commercial Law and relevant laws such as the Law on Transportation, civil law, investment law etc as well as in some kinds of legal documents, to facilitate and support the development of logistics In addition, the State needs to change and standardize regulations (licensing, standard business conditions ), creating a free environment for logistics services Legal recognition of electronic documents and unification, standardization of goods names and codes is also very important 69 3.2.2.2 Improve the information technology environment The government needs to assess the national information infrastructure in terms of both hardware and software to look at all aspects contributing to the increased use of e-commerce including policy, Internet connectivity and information technology knowledge From then on, to expand and modernize the telecommunication network, Government should build and develop services application on Internet basis, provide easy Internet access with good quality and reasonable price At the same time, the State need maximize the use of the capacity and services of institutions involved in the collection and dissemination of information, data and programs to enhance the use of information and communication technologies For example, the State should conduct research to evaluates the involvement of national and local firms in investment and trade development programs In addition, the construction of technological infrastructure should be along with the establishment of a standardized system of technology and e-commerce on the basis of recognized legal principles leading to the formation of a standard set of national codes in accordance with the transaction , ee-commerce in international scope There must be technical solutions to ensure security and safety on the network transmission to prevent unauthorized access Units which are allowed to put information on the Internet should coordinate and these units can help businesses marketing and advertising products Participating businesses will be trained in information gathering, exchange and trade This phase can be free to attract more businesses and create habits for businesses in e-commerce 3.2.2.3 Infrastructure improvement In order to gradually complete the transport infrastructure, creating favorable conditions for the transportation of e-commerce logistics activities, the State needs to pay attention to deploying a number of major solutions: Firstly, in the short term, it is necessary to build more overpasses at intersections to improve the traffic system, reduce unoccupied in big cities Secondly, in the long term, the planning of urban development should be associated with the planning of transport infrastructure, ensure the rationality 70 Thirdly, stepping up the socialization of investment in development of transport infrastructure and expanding investment modes,: State capital concentrates on investment in planning and support for major projects It is necessary to promote the attraction of non-state capital sources through the issuance of government bonds for important and large-scale traffic works BOT investment applies to a number of projects capable of recovering capital, mainly high-speed road projects; investment by project bond capital for projects with high repayment potential; investment in the form of transfer of fees; Land conversion for infrastructure applied to urban transit routes; Establishment of "road maintenance" fund; Expanding the application of the "Urban Development Investment Fund" model In order to create diversified and sustainable funds, planning must always be one step ahead Fourth, improving the quality of using investment capital for development of transport infrastructure,:Iit is necessary to consider the order of priority in investment, overcome the local interests There must be a proper method to assess the specific and objective economic efficiency and social efficiency of the transport infrastructure project From that method, government creates the basis of determining the order of priority of the project capacity Fifth, there should be a balance between spending on investment in transportation infrastructure and regular expenditures for maintenance and repair of traffic infrastructure 71 REFERENCES Deborah L Bayles (2000), E-Commerce Logistics & Fulfillment: Delivering the Goods Heskett, J.L., Glaskowsky, N.A Jr and Ivie (1973), Business Logistics, 2nd ed., The Ronald Press Kearney (2015) Logistics and retail management, Kogan Page, London Luật thương mại, 2005 Mallik, Susan (2010), The Handbook of Technology Management: Supply Chain Management, Marketing and Advertising, and Global Management, vol (1 ed.) Hoboken, New Jersey: John Wiley & Sons p 104 Rosen & Anita (2000), The E-commerce Question and Answer Book: A Survival Guide for Business Managers Ruoxi Fan (2014) The coordination of E-commerce and Logistics A case study of Amazon.com, Bachelor‟s Thesis in Industrial Management & Logistics Sanja Lekovic (2013), The importance and characteristics of logistics in electronic commerce, 1st Logistics International Conference, Belgrade, Serbia, 28 - 30 November 2013 E W Smykay, Donald J Bowersox, Frank H Mossman (1961), Physical Distribution Management Logistics problems of the firm 10 Shipchung.vn, 2016 11 Pu Xiao, Jin Si Shi Gang, Deng Bian Zhu (1991), Logistics, Ecommerce Engineering Textbook Series 12 Thomas L Mesenbourg (2004) E-logistics & E-Fulfillment: Beyond the “Buy” Button, UNCTAD Workshop, Curacao, 2004 13 Trần Ngọc Thái Sơn, Tiki.vn, Thương mại điện tử: Áp lực từ hệ thống hậu cần 14 Jack W Farrell (1985), “New Clout for Logistics,” Traffic Management, September 1985, p 37-43 15 Jack W Farrell (1987), “Logistics: The Evolution Continues,” Traffic Management (September 1987): 88-101 16 Zhang Jin Shan (2013), Logistics and e-commerce logistics management 17 Đoàn Thị Hồng Vân, 2010, Logistics vấn đề bản, NXB Lao Động 72 18 Viện Nghiên cứu Thương mại, Bộ Thương mại (2012), Nghiên cứu kinh nghiệm quốc tế dịch vụ hậu cần (logistics) học kinh nghiệm rút cho Việt Nam 73 APPENDIX Survey Questions Dear Sir/Madam! I am doing research with the topic of "Ecommerce logistics in Vietnam, the reality and solution" The purpose of my survey is to review the level of customer evaluation of logistics activities in e-commerce in our business Therefore, I look forward to your cooperation and support so that my research results will have real meaning and contribute to the development of logistics in our e-commerce Information of the respondents Name: Gender: Formatted: Space After: pt Male Female Under 22 22-30 Address: Age: 30- 40 Other 40 Educational background: College graduates University graduates Formatted: Space After: pt Masters Doctors Formatted: Space After: pt Opinion survey Please choose the following possible answers corresponding to the comments of Mr / Ms on the level agreed with the statements given is increasing from to In particular: Totally disagree Disagree Normal Agree Totally agree Factor Survey questionnaire You receive employee feedback to confirm your Order processing order immediately after ordering You are consulted enthusiastic about the product when calling the online switchboard 74 Formatted: Space After: pt of the website The ordering process at the website is simple The interface of the website is friendly The content of the website is good and attractive, so you not pay attention to the other links You know exactly how much you put in your store You know the order that you ordered has not shipped yet You receive notification of Inventory management product information: product code, product serial number when your goods are shipped You always receive a notification if the item is out of stock You know exactly how much you put in your store Shipping time is fast The shipping charge is reasonable Transportation You always know the exact activities cost of shipping when ordering You are often supported or free shipping 75 The return process is simple Payment method is very clear Business people feel comfortable and happy when you intend to return the goods The enthusiastic staff advise you Return shipping on products some alternative that you can exchange, return Formatted: Indent: First line: cm, Space After: pt 76 ... power - E- commerce shortens the knowledge gap between developed countries and developing countries - Ecommerce is involved in the process of revolutionizing online marketing and marketing * Benefit... to the development of e- commerce and the biggest barrier now is the logistics (logistics for e- commerce) The thesis studiesy on the ongoing issues at the big e- commerce companies in Vietnam and. .. e- commerce in Vietnam have to solve remove/ take off in the near future With these above briefly outlined of limitations, the author selected the topic "E- Commerce logistics in Vietnam: The reality and