According to the Vietnam E-commerce Index Report 2024 conducted by the Vietnam E-commerce Association, which was just announced last April, despite the difficult context of the world and Vietnam's economy. , our country's e-commerce sector continues to grow strongly with a growth rate of over 25% and reaching a scale of over 25 billion USD.
The second quarter report of the e-commerce channel development consulting and analysis company YouNet ECI, said that consumers spent 87,370 billion VND shopping on the 4 largest multi-industry e-commerce platforms in Vietnam in the second quarter including: Shopee, TikTok Shop, Lazada and Tiki, increased 10.4% compared to the first quarter.
Of which, nearly three-quarters of spending flows to Shopee, with total transactions (GMV) reaching 62,380 billion VND, accounting for 71.4% of the market share. Ranked second continues to be TikTok Shop with 19,240 billion VND, equivalent to 22%.
Holding an overwhelming market share in the market, when the e-commerce platform increases many fees, small and medium-sized sellers that depend on the platform are the ones most affected. There have been many heated discussions around this topic in communities for sellers. Among them, there are many opinions surrounding the topic of business on private websites.
To help readers get more information, we had an interview with Mr. Nguyen The Chieu, CEO of Coolmom Joint Stock Company, specializing in selling genuine products for Mothers & Children on the e-commerce platform and also owns Owning your own website coolmom.vn is always in the TOP suggestions of Google, especially the keyword group related to “breast pump”.
* Reporter: It is known that you started out as a programmer specializing in website programming and are currently operating an e-commerce system specializing in selling products for Mother & Baby. Can you share more about your business model?
Before doing business in the Mother & Baby industry, I was a programmer specializing in website design. I started working as a website designer in 2006. After more than 10 years of working in this field, in 2018 I switched to selling products for Mother & Baby by opening stores on the e-commerce platform. death. By 2022, we will build the website coolmom.vn to expand our business and avoid dependence on the exchange. Currently, our website has relatively stable revenue and is still growing month by month.
* How do you compare doing business on your own website and an e-commerce platform?
Doing business anywhere has its own characteristics and difficulties, but in general, doing business on an e-commerce platform is somewhat easier than on a website.
There are already customers on the floor, you just need to find a way to attract them to your booth and motivate them to buy using quite basic tactics. Anyone with a computer, or even a smartphone, can start selling on an e-commerce platform.
As for the website, it will require more knowledge. You have to create your own channel, optimize your website, find and convince customers yourself. To do that, you need to have a general technical understanding such as: website programming technology, domain names, hosting, how to optimize websites to skills such as: online advertising (Google, Facebook, etc.), how to measure website metrics, how to optimize conversions, etc.
Technically, you can easily outsource, there are many units that provide full website design services and technical support for you when needed. As for marketing skills, sales skills on the website, advertising skills to attract visitors to the website and many other skills, you must understand deeply and operate them yourself to get good results. If you don't have in-depth understanding, you will spend a lot of time learning more, paying prices, or will have to outsource a lot of money without necessarily being effective.
Up to this point, the e-commerce market in Vietnam is a two-horse race between Shopee and TikTok Shop. However, recently these two “bosses” have continuously increased their fees to approximately 20%, not including internal advertising costs and other marketing costs. This has caused many difficulties for sellers. There are many sellers who have left the exchange to move to another easier platform. Among them, many people are learning how to sell on their own website. You can easily recognize this trend when joining groups for sellers on Facebook.
In general, operating a business on the floor is easier than on the website, but you need to have a large enough gross profit margin to hope to have good profits. In my opinion, the minimum gross profit margin is about 40% to sell on the floor at this time. If it is lower than that threshold, there will be many difficulties in operation.
* Is it expensive to operate a private website?
Operating costs more or less depend on the scale, methods and implementation skills of each business. For large websites like Mobile World, Con Cung or Coolmate, the “emerging star in the fashion industry”, operating costs are relatively large, up to billions of dong per month.
But more than 95% of Vietnamese businesses are small and medium-sized, along with hundreds of thousands of business households and small sellers, with almost no resources to build and maintain websites on such a large scale. So in general, most will be suitable for building smaller-scale websites with not too expensive operating costs.
In the past, we had to design our own websites or hire web design agencies, which took a lot of time, effort and money, but now there are many fast and effective website creation models such as WordPress, Sapo, Haravan. , Shopify, etc… You can complete an e-commerce website in just a few days with a not too large cost, from only a few million VND, depending on your needs. Then you need to pay monthly maintenance costs from a few dozen to several hundred thousand dong. I think that for an individual or a serious business investment, this cost is not high.
Many people say that using fast web systems cannot be optimized and cannot grow. That's not entirely true. As mentioned above, most sellers in Vietnam are small and medium sized, with revenue ranging from only a few billion to several tens of billion VND per year. Assuming the average value of each order is 200,000 VND, there are only a few tens of thousands of orders per year, meaning there are only a few dozen to a few hundred orders per day. Assuming the conversion rate is 1%, there will only be a few thousand to tens of thousands of visits per day. With such a scale, it is completely possible to use fast web creation systems like I mentioned above and still achieve very good business results.
When your business is on a larger scale and the need for customization is higher, you can invest more money to design a website according to your needs.
* In your opinion, what is the most important factor that determines the success or failure of a private website?
In my opinion, traffic is the most important factor that determines the success or failure of your own website and is also a big problem that needs to be solved for most sellers.
You can easily create a website with quick website creation tools like I mentioned in the previous section, then uploading products to the website is also completely easy. But if there are no visits, that is, no people come to see the product, you cannot sell the product.
Of course, besides visits, there are many other factors that affect business performance such as: shipping fees, product prices, user experience, conversion optimization, sales policies, brand reputation, etc. etc… but the most important thing in my opinion is still to have traffic. If there are no visits, you will have nothing to do.
* So how to increase traffic, sir?
As I said above, increasing quality traffic to your website is a big problem and not easy to solve. Many sellers, after setting up a website, had to give up because they had no traffic, leading to no sales.
But saying that doesn't mean there's no way. Within the scope of a brief sharing, I would like to share three large groups of solutions to increase visits.
The first is from Advertising.
Advertising is one of the fastest ways to get traffic. Usually, to increase traffic to a website, people will use Google Adwords. This is Google's advertising platform, relatively easy to deploy, and the budget is not too large. In addition, you can advertise to attract visits from social networks: Facebook, TikTok, Instagram, etc.
On communities for sellers, many people complain that website advertising costs are too expensive and ineffective. So they don't sell on the website. But I think that's just the opinion of people who don't have a deep understanding of business methods on websites.
If business on the website was not effective, there would not have been a brilliantly developed LadiPage of the late CEO Binh Nguyen. There are no famous startups that only do online business like Coolmate. And website creation platforms like WordPress, Shopify, Sapo, Haravan, etc. cannot have hundreds of thousands of users like today.
So, if you know how to choose products, know how to optimize conversions and provide good customer service, you will reap the rewards from your website.
The second is from doing SEO (Search Engine Optimization).
SEO is a free and sustainable solution to increase traffic. On SEO communities, you can easily come across posts sharing that doing SEO is very difficult and time-consuming, or offers to hire SEO services with costs ranging from tens of millions to hundreds of millions of dong.
In fact, if you understand SEO, you will see that doing SEO is not too difficult or costly.
Within the scope of a short conversation and a broad topic like this, I cannot share more details about SEO. I myself am not an SEO expert, but currently my company's website has a very high ranking in the Mother & Baby industry. I have a few brief suggestions for you as follows:
Focus on building brand reputation; increase website reliability; and most importantly, website content. Make website content unique, original and valuable to users. When you do everything best for users, Google will not forget you.
Absolutely stay away from fraudulent SEO tricks to bypass Google's automatic censorship stages. You may be able to outsmart Google once, but you certainly can't do it forever. Every year Google has several major updates, each time you may have to pay the price if you find a way to circumvent the rules.
Take advantage of all free methods before thinking about paying to optimize costs as much as possible.
Third is Social Networks.
Social networks are an endless resource to bring traffic to your website. You can use social networks to share website links; you can build a community to redirect to the website; etc…
According to his sharing, to do business successfully on the website requires a lot of knowledge, implementation also requires time and initial investment costs are higher than other sales channels. So do you have any advice for sellers who have little resources but want to do business on the website?
It is true that achieving success with an e-commerce website requires a lot of knowledge. If you do not have a comprehensive understanding of all its aspects, you cannot implement it, or even implementing it will cost a lot of time and money.
I don't want to give advice because each person has a different starting point, different circumstances and different implementation capacity. But if I must answer this question, I have a few suggestions as follows:
Choose niche products. Make each small niche and then gradually expand.
Build brand and reputation for the website.
Operate as leanly as possible.
Strict financial management.
Focus on SEO to reduce advertising costs.
* Thank you for taking the time to share.
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