Vietnam Business Channel

32% of Vietnamese companies use social network marketing

The Viet Nam E-commerce Association (VECOM) has just released its latest survey related to the use of social network marketing by Vietnamese enterprises. A total of 4,100 enterprises were surveyed between September ~ November 2017 as to whether they conduct business on social networks. 32% of the companies that were surveyed said, “yes” that they do business on social networks, a decrease of 2% from 2016’s results.

VECOM notes that conducting business on social media networks, such as Facebook, has been a common business practice trend among small and medium-size enterprises during the last several years due to the low start-up and maintenance costs of creating a social media sales channel. In addition to enterprises, many Vietnamese individuals have also conducted business through social media channels in recent years.

In order to maximize their online sales opportunities and diversify from being overly dependent upon social media networks, individuals and companies are also using e-commerce multi-merchant trading platforms and developing dedicated websites to sell their products.

E-commerce platforms have been a useful tool for many small and medium enterprises, but the use of multi-merchant e-commerce trading platforms seems to be in a slow-decline with 11% of the enterprises surveyed saying they traded on these type of sites in 2017, down from 13% in 2016.

VECOM also noted that 2015 seems to have marked the “boom” in mobile commerce. Since 2015 many businesses have invested heavily in mobile infrastructures and platforms, including developing mobile e-commerce applications and upgrading their websites to being mobile-friendly.

However, VECOM’s survey shows the development of mobile e-commerce seems to have leveled off with the proportion of websites that are compatible with mobile devices decreasing to 17%, from a high of 19% in 2016. The survey also found that the percentage of businesses that have mobile applications was 15% in 2017, the same as it was in 2016.

A representative of VECOM said of the survey’s results: "It can be seen that many businesses do not really see the effect from this (mobile e-commerce) platform and the demand for mobile-based shopping is only suitable for major cities such as Hanoi and Ho Chi Minh City.”

When looking at application development on mobile systems, Android is still the most popular platform, accounting for 71% of apps; followed by iOS with 43% share and Windows with 40% share. VECOM said that, "this data does not change much compared to that of 2016 survey.”

VECOM’s survey also revealed that 39% of businesses rated online sales through social networks to be their most effective marketing and sales channel, followed by enterprise websites at 35%; mobile applications at 22% and multi-merchant e-commerce trading platforms at 18%.

The survey also revealed that the “.VN” domain name was chosen by 47% of businesses when building their websites, followed by 42% of companies choosing the ".com" domain name.

Selling products and services on social media networks, especially Facebook has drawn increased government scrutiny. In 2017 the Hanoi city government sent out notices related to tax payments to more than 30,000 companies and individuals that it had identified as selling on Facebook, while the Ho Chi Minh City government also sent notices to more than 35,000 individuals and companies in its jurisdiction.

It’s also expected that other government entities including those that deal with public safety and security may begin to examine company’s social media practices, focusing on database and financial records management.

The Vietnamese governments concern follows recent announcements that Facebook allowed data on more than 87 million Americans to be harvested by outside companies. Facebook also announced that information on 427,446 Vietnamese has been leaked and it is expected that the government will be asking Facebook about how data on its citizens is gathered, stored, used and protected.