The fact that Temu delivers goods from China to Vietnam without shipping fees has surprised many people, because the shipping fee from Ho Chi Minh City to Hanoi ranges from 20,000 – 30,000 VND/order.
According to the Vietnam Logistics Services Association, logistics costs in Vietnam account for 16.8 – 17% of GDP, while the global average is only 10.6%. This makes it difficult for Vietnamese businesses to compete on price with goods imported from China. Furthermore, Chinese goods imported through e-commerce platforms are often broken down to avoid taxes, while Vietnamese goods are subject to all kinds of taxes and fees.
The leader of Giao Hang Nhanh Company said that the cost of shipping an order ( shipping fee ) in China at one point dropped to 3 NDT (about 10,000 VND), while this cost in Vietnam has dropped from 40,000 VND to 25,000 VND/order in the past 10 years.
With the average value of an e-commerce order in Vietnam being around VND350,000, sellers often incur shipping costs of more than 10% to attract customers.
According to Ms. Khuu Kim Ngan – representative of Binh Minh Garment Company, these are the reasons why domestic enterprises have difficulty competing with Chinese goods. Meanwhile, according to enterprises, the logistics system in Vietnam has not reached the level of automation and lacks standardization, leading to high costs and slower delivery times.
For example, a delivery company can only collect goods 1-2 times/day, causing delivery delays. If an order is placed after the collection time, the goods may have to wait until the next day to be shipped, significantly extending delivery times.
Packaging in Vietnam has not yet reached the same level of automation as in China, which increases costs and prolongs the time required to repackage imported goods.
“In the “First Mile” stage (the first stage of the logistics chain), goods in China are processed quickly thanks to standardization and large warehouse concentration, while in Vietnam this process is prolonged due to lack of concentration, causing delivery time from Hanoi to Ho Chi Minh City to be slower than from the Chinese border to Vietnam…”, a leader of a shipping unit admitted.
Mr. Than Duc Viet, general director of May 10, said that high logistics costs and lack of operational synchronization are major barriers that put Vietnamese enterprises at a disadvantage compared to imported goods. Furthermore, in addition to difficulties with transportation costs, domestic manufacturing enterprises also bear the burden of other taxes and fees.
To compete with the wave of cheap goods from China, experts and businesses recommend that Vietnam needs to strongly improve its logistics infrastructure and have appropriate tax policies.
According to Mr. Nguyen Xuan Hung – representative of the Vietnam Logistics Services Association, building bonded warehouses will help reduce intermediary costs and delivery time, creating conditions for domestic goods to compete better.
In addition, investing in satellite warehouse systems and logistics automation is essential. Having more large warehouses will help businesses optimize packaging processes, shorten delivery times, and reduce transportation costs.
Mr. Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association, suggested that the Government should consider reducing value-added tax and import tax for some strategic items, as well as supporting land and investment capital for modern warehouse projects. These would be factors that help Vietnamese goods compete with imported goods.