E commerce development in agricultural trade promotion in vietnam

VIETNAM NATIONAL UNIVERSITY, HANOI HANOI SCHOOL OF BUSINESS DOAN TRAN NHAN E-COMMERCE DEVELOPMENT IN AGRICULTURAL TRADE PROMOTION IN VIETNAM MASTER OF BUSINESS ADMINISTRATION THESIS Hanoi, 2012 VIETNAM NATIONAL UNIVERSITY, HANOI HANOI SCHOOL OF BUSINESS DOAN TRAN NHAN E-COMMERCE DEVELOPMENT IN AGRICULTURAL TRADE PROMOTION IN VIETNAM Major: Business Administration Code: 60 34 05 MASTER OF BUSINESS ADMINISTRATION THESIS Supervisor: Dr Tran Doan Kim Mr Ha Nguyen, MBA Hanoi, 2012 ACKNOWLEDGEMENTS Electronic commerce (E-commerce) is a new field and showing great role in trade promotion, products trading through the global Internet E-commerce can help businesses reduce costs because they can introduce to consumers about products and services through its own Website, frequently contact with their customers and learn about customer needs via E-mail, and conduct transactions directly with customers online Moreover, businesses can attract the large customer because Ecommerce is not limited by geography The targeted consumers are not only domestic but also foreigners Due to benefits of E-commerce, now many companies over the world apply this model in their business operation In Vietnam, according to E-commerce Report 2010 of the Ministry of Industry and Trade (MoIT), among more than 3400 enterprises surveyed are almost 100% of businesses applied E-commerce in different levels The application of E- commerce has brought efficiency to the enterprise, especially in access to customers and operations management and sales However, purchasing through E-commerce websites only popular for some kinds of goods and services such as airline tickets, electronics, cell phones, computers, books, tours, hotels, cosmetic, etc Trade promotion is the series of activities to promote the sale of the business in general and target market Since the traditional trade promotion activities are geographically limited, higher costs and taking long time, so the application of Ecommerce seems to overcome such drawbacks In Vietnam agriculture, the E-commerce application is concerned, facilitated and clearly oriented by the Government agencies Besides the traditional trade promotion activities are being applied in agriculture such as surveys, trade fairs and exhibitions E-commerce will create a new promotion method that is simple, convenient, fast and save cost In the present, there are some Agri-businesses applying E-commerce in marketing activities and business of their products Moreover, understanding the current trend of IT application, there are some i professional websites have built and they operate as the trading platform for Vietnam and foreign agricultural products However, only a few businesses can achieve success from these activities and many websites have built with boring content, out of dated information, and the websites cannot attract customers to visit and deal with suppliers in the website During the MBA course at the HSB, I received the enthusiastic support from lecturers and guidance on methods of studying and working Moreover, all of lecturers create good conditions to help me constantly expand, improve knowledge learned in practice In the process of working in Trade Promotion Center for Agriculture (Agritrade), I have discovered and proposed research project “E-Commerce development in agricultural trade promotion in Vietnam” and developed this subject into my thesis During the implementation of the subject, I have received much help from the lecturers, leaders, and staff of Agritrade Which I particularly thank: Lecturer: Ha Nguyen who has dedicated to guide me in the implementation process of this project Mr Nguyen Van Thang - Director of Agritrade who has created good conditions for me to complete this thesis, the research and given many ideas for my thesis In the process of completing this thesis, by the terms subjective and objective can you also flawed So I hope to receive guidance and comments from all lecturers I sincerely thank you! ii ABSTRACT E-COMMERCE DEVELOPMENT IN AGRICULTURAL TRADE PROMOTION IN VIETNAM Doan Tran Nhan MBA Candidate, 2009 – 2011 School of Business – Vietnam National University, Hanoi Supervisors: Dr Tran Doan Kim Ha Nguyen, MBA May 2012, 93 pages Subject “E-Commerce development in agricultural trade promotion in Vietnam” is based on actual duties of the author at the Trade Promotion Center for Agriculture (Agritrade) This is a unit under the Ministry of Agriculture and Rural Development and they responsible for planning and implementation of trade promotion programs for Vietnam agricultural sector; consulting agricultural policies on the export promotion and trade development; and supporting businesses in developing markets Based on the concept of E-commerce and trade promotion, the macro environment analysis; the real situation of E-commerce development in Vietnam, and operation of Agritrade, author has proposed the solutions of applying suitable E-commerce model for trade promotion activities in agricultural sector, thereby helping to promote agricultural enterprise’s image, expanding market and searching for a sustainable business contracts, moreover, helping Agritrade implementation more successful their political duties Structure of this thesis including: - Chapter 1: Theoretical framework - Chapter 2: Background and Real situation of Agricultural trade promotion of AGRITRADE - Chapter 3: Conclusion and the proposal solution of E-commerce development for Agritrade iii TÓM TẮT PHÁT TRIỂN THƢƠNG MẠI ĐIỆN TỬ TRONG XÚC TIẾN THƢƠNG MẠI NÔNG NGHIỆP TẠI VIỆT NAM Đoàn Trần Nhân Khoa Quản trị Kinh doanh – Đại học Quốc gia Hà Nội Hƣớng dẫn: Ts Trần Đoàn Kim ThS Hà Nguyên Tháng năm 2012, 93 trang Đề tài “Phát triển thươ ng maị điêṇ tửtrong xúc tiến thương maị nông nghiêpp̣ taị Việt Nam” đƣợc thực dựa thực tế nhiệm vụ công tác tác giả Trung tâm Xúc tiến thƣơng mại Nông nghiệp (Agritrade) Đây đơn vị trực thuộc Bộ Nơng nghiệp Phát triển nơng thơn có nhiệm vụ lập kế hoạch thực chƣơng trình xúc tiến thƣơng mại cho ngành nông nghiệp Việt Nam; tƣ vấn xây dựng sách nơng nghiệp xúc tiến xuất phát triển thƣơng mại; hỗ trợ doanh nghiệp phát triển thị trƣờng Dựa khái niệm thƣơng mại điện tử xúc tiến thƣơng mại; phân tích mơi trƣờng vĩ mơ; thực trạng phát triển thƣơng mại điện tử Việt Nam; hoạt động Agritrade, tác giả đề xuất giải pháp ứng dụng thƣơng mại điện tử phù hợp cho hoạt động xúc tiến thƣơng mại ngành nông nghiệp, qua giúp cho doanh nghiệp nơng nghiệp quảng bá hình ảnh, mở rộng thị trƣờng tìm kiếm hợp đồng kinh doanh bền vững, đồng thời giúp Agritrade thực thành công nhiệm vụ trị Kết cấu đề tài bao gồm: - Chƣơng 1: Cơ sở lý luận - Chƣơng 2: Bối cảnh thực trạng hoạt động xúc tiến thƣơng mại nông nghiệp AGRITRADE - Chƣơng 3: Kết luận đề xuất giải pháp phát triển thƣơng mại điện tử Agritrade iv TABLE OF CONTENTS ACKNOWLEDGEMENTS i ABSTRACT iii TÓM TẮT iv TABLE OF CONTENTS v LIST OF ABBREVIATIONS vii LIST OF TABLES, FIGURES, CHARTS, DRAWINGS viii INTRODUCTION 1 The imperative of subject Establish the main research subject 3 Research’s objectives Research scope Delimitation of the research’s contents 5.1 The basic elements of E-commerce model 5.2 Assign content to develop E-commerce model for Agritrade .5 Research methods .5 6.1 Data collection methods 6.2 Data analysis methods CHAPTER 1: THEORETICAL FRAMEWORK 1.1 E-commerce 1.1.1 The concept of E-commerce 1.1.2 Characteristics of E-commerce 10 1.2 The formation of E-commerce 10 1.2.1 The reasons of E-commerce .10 1.2.2 The formation of E-commerce 11 1.3 The situation of E-commerce development in Vietnam 12 1.4 The operation forms and E-commerce transactions 14 1.4.1 The forms of E-commerce activities 14 1.4.2 Transaction forms of E-commerce 17 1.5 Benefits of E-commerce for businesses .22 1.5.1 E-commerce reduces costs .22 1.5.2 Impact on enterprise architecture .24 1.6 The E-commerce requirements 25 1.6.1 Technological Infrastructure 25 1.6.2 Human Infrastructure .26 1.6.3 Security and safety 26 1.6.4 Automatic Financial payment system 27 1.6.5 Consumer Protection 28 1.6.6 Economic and legal infrastructure 28 1.7 Definition and content of Trade promotion 29 1.7.1 Definition: 29 1.7.2 The purposes of trade promotion .30 1.7.3 Types of Trade Promotions 31 1.8 Trade Promotion in E-commerce 32 v 1.9 The difference of E-commerce applications in agricultural trade promotion 33 CHAPTER 2: BACKGROUND AND REAL SITUATION OF AGRICULTURAL PRODUCTS PROMOTION OF AGRITRADE 34 2.1 Overall assessment of domestic market for Agricultural product 34 2.2 Overall assessment of agricultural trade promotion activity of Agritrade 38 2.2.1 Overview of Trade Promotion Center for Agriculture (Agritrade) 38 2.2.2 Agritrade’s main missions: .40 2.2.3 Recent years’ Main Activities: 42 2.2.4 Overview of agricultural trade promotion activities of Agritrade 43 2.3 Assessing the impact of external environmental factors to E-commerce application at Agritrade 46 2.3.1 Impact of economic environment 46 2.3.2 Impact of political legal environment 50 2.3.3 Impact of socio-cultural environment 51 2.3.4 Infrastructure and Internet services for E-commerce .52 2.3.5 Competitors 55 2.3.6 Customers 57 2.3.7 Human resources for E-commerce 59 2.4 Assessing the impact of internal environmental factors to the E-Commerce applications in trade promotion activities of Agritrade 61 2.4.1 Impact of human resources 61 2.4.2 Impact of financial resources 62 2.4.3 Impact of technology infrastructure 63 2.5 Analysis the results of survey and discussions 63 2.5.1 The results of survey 63 2.5.2 Results of expert interviews .75 CHAPTER 3: CONCLUSIONS AND THE PROPOSAL SOLUTION OF E-COMMERCE DEVELOPMENT FOR AGRITRADE 77 3.1 The conclusions and findings through the research process 77 3.1.1 The achievements and limitations of Agritrade 77 3.1.2 The findings of the research process 79 3.2 Orientation and perspective of development of Agritrade in the future 80 3.2.1 Development orientation of Agritrade 80 3.2.2 Agritrade’s views on the E-commerce application 81 3.3 Proposal solutions of deploying E-commerce application in Agritrade 81 3.3.1 Group of Human Resource solutions .81 3.3.2 Solutions related to infrastructure and technology 82 3.3.3 Solutions related to business processes 85 3.3.4 Solutions related to electronic marketing promotion .87 3.3.5 The other solutions: 89 CONCLUSION 91 LIST OF REFERENCES 94 vi LIST OF ABBREVIATIONS ARPANET Advanced Research Projects Agency Network Agritrade Trade Promotion Center for Agriculture APEC Asia-Pacific Economic Cooperation B2B Business – to – Business B2C Business – to – Consumer C2C Consumer – to – Consumer E – commerce Electronic Commerce ECM Enterprise content management EDI Electronic Data Interchange GSO General Statistics Office Of Vietnam IT Information Technology MARD Ministry of Agriculture and Rural Development MoIT Ministry of Industry and Trade MRO Maintenance, repair and operation UNCITRAL United Nations Commission on International Trade Law VAN Value Added Network VECITA Vietnam E-Commerce and Information Technology Agency WTO World trade Organization vii LI Tables T Table 0.1 tr Table 2.1 V Table 2.2 D Table 2.3 E T Table 2.4 h Table 2.5 S Table 2.6 S Table 2.7 S E Table 2.8 l Table 2.9 S Table 2.10 S E s a E s c Table 2.11 Table 2.12 Charts Chart 2.1 Organization structure of Agritrade viii APPENDIX Appendix 1: Questionnaire survey for staff of Agritrade I TECHNICAL INFRASTRUCTURE AND IT APPLICATIONS CAPACITY Question 1: Have you been equipped with computers at work? □ Yes Question 2: Does your computer connect to the Internet? □ Yes Question 3: What kind of Internet connection used by Agritrade? □ ADSL □ FTTH Question 4: Does local network (LAN) of Agrirade equipped with network security systems? (Firewall, antivirus, security, etc )? □ Yes Question 5: According to you, what are basic IT applications in the following list that Agritrade has used? □ Document operating on the network environment □ Accounting Management □ Use of electronic mail □ Teleconferencing Question 6: Do you use email at work? □ Yes 96 Question 7: In your opinion, what are the main functions of the Agritrade’s website? □ Promote Agritrade □ Product promotion □ Enterprises support Question 8: Frequency of updates Website/e-Portal? □ Daily □ Monthly Question 9: Do you get regular support and answer the difficulty during process of IT application? □ Yes Question 10: How about the attention of Agritrade’s Director to IT application? □ Do not care or very little attention □ Fairly attention II IT APPLICATIONS TO PROMOTION ACTIVITIES AT AGRITRADE Question 1: What is method that applied by Agritrade to deploy agricultural products promotion activity? □ By direct displaying □ Promoted via Agritrade’s website □ leaflets 97 Question 2: According to you, with the current form of implementation, Agritrade has achieved the objectives of agricultural products promotion activity? □ Yes □Maybe Question 3: According to you, should Agritrade apply IT in the agricultural products promotion activity? Why? □ Yes Reason: ……………………………………………………………………………………… ……………………………………………………………………………………… …………… Question 4: If applied IT, what way Agritrade should use? □Developing E-commerce website B2B, B2C □Developing Agritrade’s website □Use Email □Other: ……………………………………………… Question 5: If applied E-commerce model, what should Agritrade and what is the most important factor? □HR preparing □Marketing □Web Design □To upgrade the technical infrastructure □Other: ………………………………………………………………… The ………………………………………………… 98 Question 6: The need to deploy e-payment in E-commerce applications for Agritrade? □ (Level decreased from to 1) Question 7: The necessary level of online support deploying in E-commerce application? □ (Level decreased from to 1) Question 8: The necessary level of deploying network security in E-commerce application? □ (Level decreased from to 1) Question 9: The necessary level of training customer to use E-commerce model? □ (Level decreased from to 1) 99 Appendix 2: Questionnaire survey for Agritrade’s customers I PRIVATE CUSTOMER (BUYERS) Question 1: How you buy agricultural products? □ Buy directly □Buy through Internet Question 2: According to you, what way provider can use to sell agricultural products through internet? □ Sales website □ Sales website Question 3: The level products on the Internet? □5 points (very satisfied) □4 points (satisfied) □3 points (normal) □2 points (not happy) □1 (very dissatisfied) Question 4: If shopping online, what is payment method you may want to choose? □Cash □Credit card □Bank transfer □Payment by third party payment service □Other: …………………………………… 100 Question 5: Do you know about the operation of Agritrade? □ Trade fair organization □ Consulting Question 6: According to you, should Agritrade apply IT in the promotion of agricultural products? □ Yes Question 7: in the case of Agritrade applies E-commerce model in promoting products, can you point to the reliability of information provided by Agritrade? □ (Level decreased from to 1) Question 8: If you purchase online at the website of Agritrade, what is level of trust to pay online? □ (Level decreased from to 1) II SUPPLIER (PRODUCERS) Question 1: What is the current cooperation method with Agritrade? □Joint fair held by Agritrade □Rentlong-termspaceat Agritrade Question 2: The level of effectiveness of current cooperation method with Agritrade to promote products? □ (Level decreased from to 1) 101 Question 3: As representative of providers, can you point to the necessary level of deployment E-commerce applications in Agritrade? □ (Level decreased from to 1) Question 4: If Agritrade applies E-commerce model, will you cooperate with Agritrade to provide product information? □ Yes Question 5: If applied E-commerce, according you, what are factors Agritrade should focus on? □HR □Marketing □To improve payment method □To upgrade the technical infrastructure □Improve delivery process Other: ………………………………………………… Question 6: The necessary level of e-payment when Agritrade applies Ecommerce model? □ (Level decreased from to 1) Question 7: The necessary level of training providers to help them introduce themselves, and dealing with customers on the Agritrade’s E-commerce Website? □ (Level decreased from to 1) 102 Question 8: The necessary level of deploying online customer care service when applying E-commerce model at Agritrade? □ (Level decreased from to 1) 103 Appendix 3: Questionnaire for specialist INTERVIEW FORM Để giúp phục vụ cho việc nghiên cứu xây dựng mơ hình Xúc tiến thƣơng mại hàng nông sản cho Trung tâm XTTM Nông nghiệp, mong ông/bà tham gia trả lời câu hỏi vấn sau Kết thu đƣợc thực tiến, khoa giúp cho việc xây dựng mơ hình TMĐT cho Agritrade Vì tơi xin chân thành cảm ơn mong nhận đƣợc tham gia nhiệt tình ơng /bà Trƣớc tiên xin chân thành cám ơn ông/bà tham gia vấn Câu 1: Ông/ bà đánh giá phát triển hàng nông sản thị trƣờng nƣớc thời gian tới ? ……………………………………………………………………………………… ……………………………………………………………………………………… Câu 2: Ông/bà đánh giá tình hình triển khai hoạt động XTTM hàng nông sản mà Agritrade thực thời gian qua? ……………………………………………………………………………………… ……………………………………………………………………………………… Câu 3: Ông/bà nhận định nhƣ phát triển thƣơng mại điện tử Việt Nam thời gian tới? việc ứng dụng TMĐT lĩnh vực nông nghiệp? ……………………………………………………………………………………… ……………………………………………………………………………………… 104 Câu 4: Ơng/bà rõ nét chiến lƣợc phát triển hoạt động XTTM hàng nông sản Agritrade thời gian tới? ……………………………………………………………………………………… ……………………………………………………………………………………… Câu 5: Theo ông bà việc phát triển, ứng dụng TMĐT hoạt động XTTM Agritrade có cần thiết phù hợp không? ……………………………………………………………………………………… ……………………………………………………………………………………… Câu 6: Nếu ứng dụng TMĐT hoạt động XTTM Agritrade, theo ông/bà Trung tâm phải làm theo hƣớng và yếu tố quan ……………………………………………………………………………………… ……………………………………………………………………………………… Câu 7: Theo ơng /bà, Trung tâm có lợi khó khăn ứng dụng TMĐT vào hoạt động XTTM? ……………………………………………………………………………………… ……………………………………………………………………………………… Thông tin ngƣời đƣợc vấn: Họ Tên: ……………………………………………………………………………………… Đơn vị công tác: ……………………………………………………………………………………… Chức vụ: ……………………………………………………………………………………… 105 Appendix 4: the basic legal framework for electronic transactions in Vietnam LAW 29/11/2005 La 29/06/2006 La 23/11/2009 La 09/06/2006 De De 15/02/2007 the dig 23/02/2007 De act 08/03/2007 De 13/08/2008 De 10/04/2007 28/08/2008 10/04/2007 16/01/2008 De ap De use De adm De adm De 20/03/2009 adm use Cir Ci 21/07/2008 De on Ci 31/12/2010 ma pro Ci 15/09/2008 of of 16/03/2009 Ci the 10/11/2010 20/12/2010 Cir for Cir wi Cir 12/11/2008 art ser 18/12/2008 24/12/2008 Cir ser of Cir and Cir 24/12/2008 set nam Cir an 29/06/2010 soc 97 pro Cir 30/12/2008 im 90 02/03/2009 Cir ma cer adv Cir 31/07/2009 pro to Cir 15/11/2010 sec we 14/12/2009 Cir pro ins ser 22/07/2010 Cir on Cir 9/11/2010 reg pay (Sources: Vietnam E-commerce Report 2010 and ICT White book 2010) 108 ... many different names: “Online trade? ??, “Cyber trade? ??, “Electronic Business”, “paperless trade or commerce? ?? etc Recently the name ? ?E- commerce? ?? has become familiar and became the general convention,... the business, especially building business’s image, aim to people regularly access the Internet and using Email Trade promotion in E- commerce is actually the way businesses use the Internet features... supporting businesses in developing markets Based on the concept of E- commerce and trade promotion, the macro environment analysis; the real situation of E- commerce development in Vietnam, and operation