If you have ever thought about looking for a manufacturer or a supplier in Vietnam, your first choice would be to consider checking out Alibaba’s services.
However, this cannot be the best resource to opt for as it is not very active in Vietnam as compared to how it functions in China. Fortunately, Vietnam has come a long way in coming up with alternatives by launching its very own eCommerce platform that can help the in-country businesses to access the European Union market.
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The Difficulties of Sourcing in Vietnam
When sourcing in Vietnam or in another SE Asian economy, it was found that their processes can be more intricate than the ones in China. The market is significantly smaller than the ones in China – meaning that the online presence of manufacturers and suppliers is seriously underrepresented.
In fact, there are more than a thousand websites that do not have a website or a directory listing which makes it almost impossible to source the products unless you fly over to Vietnam and personally start vetting the factories. Moreover, there are many manufacturers in Vietnam that do not have English language-based websites, so if you want to make an order, you will have to speak in Vietnamese to do so.
Additionally, if you reach out to sourcing agencies in Vietnam, you can pretty much virtually manufacture every product in Vietnam – which is actually a lot harder than it sounds. For example, suppose you are hoping to source your products in Vietnam by yourself, like selling bags. The first thing you would need to do is to research suppliers for bags on famous websites like Alibaba, where you will find that the keyword ‘bag will pull up about 331 manufacturers in Vietnam, while in China, you will find more than 39230 manufactures using the same keyword. Plus, even if you do manage to cut a good deal with the bag manufacturers in Vietnam and save yourself the extra expenses, it can still be pretty difficult to get in touch with the suppliers.
China is probably the most convenient place for you to find any kind of supplier. No matter what you need, you will always find the products in China. This is due to their general assumption that everything can be made possible in China with only a few clicks to get what you want. As such, there is a heavy contrast in the supplier market between China and Vietnam.
Unfortunately, manufacturing sources in Vietnam have not matured to the point where suppliers have materials, infrastructure, an internet presence, and various other essentials that are needed to manufacture diverse products. Consequently, Vietnam-based manufacturers have to depend on importing materials from China for electronics and textile. Moreover, many manufacturers who have successfully established their sources and have full control over their manufacturing abilities rarely open up to foreign buyers. So if you are hoping to make contact with a supplier from Vietnam, you will need a mediator who can source the products for you.
In conclusion, manufacturing in Vietnam is not as simple as just calling up a supplier and getting them to initiate manufacturing. Simply finding a supplier can be the toughest challenge to begin with.
However, we are now witnessing a change in these circumstances as manufacturers in Vietnam are beginning to confront these issues after witnessing a positive boost in their eCommerce during the COVID-19 pandemic. The deputy minister for trade and industry, Cao Quoc Hung, has said that Amazon and Alibaba had boosted the productivity of business households and micro-sized enterprises to export their products, which was considered to be an impossible feat in the past. He also added that what Vietnam needs right now is to make breakthroughs in assisting the Vietnamese various companies in attaining access to foreign markets such as the EU.
Naturally, this has brought forth the question of why not use Alibaba or Amazon, which are already pros at business to business and business to consumer sales? As mentioned before, these platforms are not very active in Vietnam – but more than that, Vietnam hopes to compete with its neighbor for foreign investments. By keeping things in-house, more money stays within the country while simultaneously reducing the risks of doing business with entities that have huge market power and are bound by following the rules of the Chinese government.
According to a report by the Vietnam state media, the EU has already become one of the leading trade partners of Vietnam, with a two-way trade that has reached $56.45 bn in 2019 and Vietnamese exports that are worth $41.5 bn.
Alibaba Alternatives in Vietnam
Despite the growing fragmentation of the business landscape in Vietnam, their manufacturing is booming as many alternatives to Alibaba have been established to counter the growing pains of the Vietnam economy.
1. eWorldTrade
The B2B e-commerce marketplace has revolutionized the Far Eastern region, emerging as one of the preferred options. eWorldTrade has grown phenomenally in the global space of B2B e-commerce. It has a plethora of listings in multiple categories and provides buyers and sellers with a healthy ecosystem.
eWorldTrade emerged about 10 years ago, and gradually it has capitalized on the global market space, making it one of the highly sought-after B2B e-commerce platforms.
2. Global Sources
Global Sources is one of the main alternatives to Alibaba and has a section for suppliers in Vietnamese suppliers as well. As such, they have almost the same platform as Alibaba, which makes it easier to narrow down searches based on the type of suppliers you are going for. Hence, this platform serves as a reliable trading platform within Asia while simultaneously being the second-largest right after Alibaba.
Established in 1975 by the Western ex-pats who had wanted to promote manufacturing in Vietnam. Global Sources has a better reputation in comparison to Alibaba when it comes to their product quality, where Global Sources has far superior quality. Additionally, if you check out their section of “Vietnam Manufacturers And Suppliers,” you will find that there are currently more than 5900 wholesale products from over 560 suppliers.
Their range of products varies from bags to electronics to aluminium and so much more. Their minimum quantity orders vary from ten pieces up to around 5000 pieces on specific items. Plus, you will come to find that their suppliers offer reliable suppliers in Vietnam, and there is little to nothing that could go wrong, such as payment frauds, as long as you are cautious about your partners.
Moreover, as Global Sources is a reliable seller, they also want to make sure they are conducting business with an equally reliable buyer who will pay them on time. So as long as you are willing to take the time to gain the trust of these suppliers, you might just be able to place your orders and get your products manufactured at lower rates than you would with Chinese suppliers.
3. VietNam AZ
VietNam AZ currently serves as the leading alternative directory to the VTown and is also a reliable source for discovering various suppliers in VN.
This place also has an accessible platform that lets you narrow down the potential suppliers based on the industry and products. This website has been operational for several decades now, and it is useful for conducting research when you are looking for new suppliers.
Another reason why this website stands out is because it started as a directory for Japanese companies based in Vietnam but had grown into a much larger directory where businesses from all over have been listing their factories in Vietnam.
As such, Vietnam AZ’s directory has a large list of thousands of businesses that are operating in Vietnam, and at the moment, more than a hundred manufacturers have been listed in industries like vehicle manufacturing, furniture, medical equipment, wood, electric appliances, oil and so much more.
4. VTown
A company that has been around for decades, VTown is by far one of the largest suppliers and manufacturer directory by size.
VTown does not allow purchases from suppliers like Global Sources and Alibaba, where orders can be immediately placed. Instead, VTown simply provides listings of manufacturers that are based on location, industry and various other essential pieces of information. At the moment, there are more than 5088 suppliers in VTown and over 11354 individual products ready for sale. Within the online realm, all the industries have been represented from textile/footwear to construction and agriculture.
Consequently, it is up to buyers to conduct their research and make contact with their suppliers individually if and when they wish to order. Plus, even if you have a wider choice when it comes to factory selection, this can end up being a downside as you do not know if these suppliers are open to business or the listing is outdated and you will have to personally contact them. Even so, VTown is still an ideal resource for discovering many suppliers in the country.
5. Sendo
Sendo is currently the largest Vietnamese eCommerce platform that is known to specialize in customer to customer trade and creates a trading platform where Vietnamese citizens can sell to each other – making it one of the most dominant webpages in the customer to customer category within Vietnam.
Sendo’s directory currently has more than ten million products for sale and over 300,000 registered users. Its base is composed of small businesses who sell their products and regular citizens who are purchasing these products on the website. The webpage has plans to revolutionize eCommerce in the country, especially in rural provinces where the concept of internet shopping has not yet achieved the extent of Hanoi and HCMC.
At the moment, they are marketing their website in areas that exceed the HCMC and Hanoi and are more focused on other provinces where almost two-third of the population continues to reside.
As the largest eCommerce website in Vietnam, Sendo has gained more than over one billion dollars in annual gross profits. It had been planned by the company to achieve this goal by 2020 but ended up achieving it earlier in 2019.
6. Tiki
In 2010, Tiki was established as an eCommerce book selling platform and ended up becoming one of Vietnam’s largest online retail companies.
Due to its exceptional products and services, the company is considered to be among the top three largest retail websites with more than 300,000 products on sale from across 12 diverse product categories.
Moreover, their annual revenue is almost about $250 million per year. We should also keep in mind that despite the large amounts of revenue, Tiki has experienced financial profits due to their spending on human resources and warehouses. As such, the company is aiming to become the largest eCommerce platform in Vietnam and scale its operations on a larger geographical scale. Over the past year, the company’s management has been raising new seed rounds of about $100 million that they will reinvest in mobile services, infrastructure, R&D, and new technologies.
7. Shopee
Shopee is not a Vietnamese owned platform but is actually an eCommerce platform based in Singapore for consumer goods and has a Vietnamese branch which serves as the leading platform in Vietnam with more than 33.6 million visitors on a monthly basis.
Consequently, Shopee is considered to be the ‘eBay of Southeast Asia” and is arguably the biggest retail website in that specific region. Owned by the Sea Group, Shopee has generated more than a billion dollars in revenue on Shopee Vietnam in 2019 and provides refund guarantees for customer protection and products with flaws.
8. Vietnam Export
Vietnam Export is an ideal modern website that has maintained an immense database of verified factories within Vietnam.
The Trade of Vietnam and the Ministry of Industry has endorsed the website, which is of much better use than the others due to its exceptional quality. Moreover, in addition to the database, they have been providing large amounts of industry-specific news and information, and the website has also been promoting agricultural products like lychee and coffee, which are difficult to obtain.
