Vietnam - E-commerce businesses in Vietnam face the risk of being acquired by foreigners

VietNamNet Bridge – Vietnamese e-commerce businesses, while calling for foreign investments in their businesses, keep a constant anxiety that the foreign partners would swallow them one day.

Nguyen Hoa Binh, General Director of Peacesoft, said on Dau tu that in 2012, the last barriers for the e-commerce development were removed. The payment, shipping and deliveries problems have all been settled, thus making e-commerce transactions absolutely “online.” He believes this would pave the way for the boom of e-commerce in the near future.

However, Binh, like the owners of many other e-commerce websites, keep worrying that one day, their businesses might be taken over by foreigners.

To date, most of the well-known Vietnamese e-commerce firms, like Peacesoft, VC Corp, VTC Online, vatgia.com or VNG, have been living with the financial support from foreign partners. Will it happen that the foreign investors would acquire the Vietnamese e-commerce firms which they understand very well after a long period of cooperation?

A question may be raised that why Vietnamese e-commerce firms still open the doors to foreign partners, if they fear that they may be taken over one day by the foreign partners?

The answer is that Vietnamese firms now need the capital and technology support from foreign groups.

Binh said that in the first phase of the global economic integration, it was really a necessary thing to call for the investments from foreign powerful groups, because this would help expand the market and improve the competitiveness.

Peacesoft, for example, has been using the capital contributed by three foreign partners namely Softbank, IDG Ventures and ebay.com.

“The foreign partners, who have profuse capital experiences and high technologies, were believed to cooperate well with Vietnamese firms, which have deep knowledge about the domestic market,” Binh said.

However, Binh, when affirming the benefits Vietnamese e-commerce firms can enjoy with the presence of foreign partners, admitted that if businesses don’t take precautions, they may be taken over by foreign partners, and the initially Vietnamese owned would become non-Vietnamese later.

Agreeing with Binh, Nguyen Ngoc Diep, General Director of Vat Gia JSC, the owner of vatgia.com, said Vietnamese e-commerce firms would be swallowed if they depend too much on foreign partners.

Diep said foreign investors have been present in Vietnam since the very beginning of the e-commerce market. And once the Vietnamese e-commerce firms reach a certain development level, other foreign big guys would also jump on the bandwagon.

Most recently, Intel Capital and Duxton have officially announced the investments in VC Corp and VTC Online after the both reported satisfactory business results and cemented their firm positions on the market.

Duxton has contributed 10 million dollars n cash to join forces with IDG Ventures and VTC to become the three big shareholders of VTC Online.

Le Hong Minh, General Director of VNG, also said that Vietnamese firms have been bearing a hard pressure from foreign partners.

Google is now considered the best information transmission channel; therefore, when looking for the information about certain products or services, users would not access directly to the e-commerce websites, but would use Google as a searching engine.

Therefore, Minh said, services and product suppliers may choose Google for their cooperation projects instead of joining hands with Vietnamese e-commerce websites.

VnExpress has quoted a report by Visa International as saying that Vietnamese people now have got more familiar to e-commerce. 98 percent of polled people said they looked for information about products and services on Internet over the last 12 months.

Compiled by Thu Uyen

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