Vietnam proposes law to regulate foreign e-commerce and protect consumers

The website of the Department of International Trade Promotion reports that the Ministry of Industry and Trade of Vietnam has proposed that cross-border e-commerce businesses operating in Vietnam must register and obtain an operating license from the Ministry.

Additionally, businesses must establish a local office or appoint a legal entity authorized to act as a representative in Vietnam. This proposal is part of a draft e-commerce law that is currently open for feedback from agencies, organizations, and the public nationwide. The proposal also suggests imposing penalties for those who violate these regulations.

For cross-border e-commerce platforms, failure to comply with the procedures set by e-commerce regulatory authorities will result in a ban on selling goods and providing services. Additionally, service providers that support e-commerce, such as intermediaries, transport, and payment services, will be prohibited from cooperating with platforms that do not comply with the requirements in Vietnam.

The new draft law will outline the responsibilities of representative offices or authorized legal entities in Vietnam to protect consumer rights and promote fairness for domestic businesses. This includes increasing accountability for monitoring foreign sellers and compensating buyers in cases of violations on platforms.In 2024, Vietnam's e-commerce market was valued at over $25 billion, a nearly 20% increase compared to 2023, according to data from the Ministry. The rapid growth of this market has prompted the need for new regulations to accommodate development and protect the interests of consumers and businesses. Countries like Malaysia, Cambodia, China, and Ireland have developed their own e-commerce laws.

Meanwhile, the European Union has specific regulations in this sector, but not direct laws. Other countries, such as Japan, South Korea, and India, have developed laws that focus on protecting users specifically.

The Trade Promotion Office in Ho Chi Minh City has commented that the Ministry of Industry and Trade of Vietnam is gathering feedback on the draft e-commerce law, which aims to improve the efficiency of e-commerce management in the country. According to the Ministry, Vietnam's e-commerce sector has been recognized by renowned market research organizations in 2024. It is expected to be the third largest in Southeast Asia and the fifth largest globally in terms of e-commerce growth rate in 2022.

However, the rapid development of technology and science, along with the emergence of new business models, has created challenges for government management, particularly in the e-commerce sector. This has led to flaws and limitations in the current policies and regulations. To ensure effective and stable management, the Ministry of Industry and Trade needs to develop the e-commerce law.Currently, there are several regulations regarding the management of cross-border e-commerce activities, which state that e-commerce platforms operating in Vietnam must have a domain name in Vietnamese or display the Vietnamese language on their website. Additionally, platforms with more than 100,000 transactions per year must register with the Ministry of Industry and Trade.

In 2024, it was noted that Chinese e-commerce platforms like Temu and Shein had not yet registered for permission from the Ministry of Industry and Trade, but they continued to offer services allowing users to download their applications to purchase products and make payments. Therefore, the new draft law stipulates that businesses and organizations engaging in cross-border e-commerce in Vietnam must apply for a license from the Ministry and establish a representative office in Vietnam or appoint a licensed entity as a representative in the country.

Additionally, foreign goods and services sold in Vietnam must comply with the standards and regulations of the Vietnamese market to protect consumers and promote fair competition.

Currently, the rate of e-commerce service usage in Vietnam has risen significantly, with over 60% of the population utilizing e-commerce services, and the average purchase value is approximately $400 per person per year. The new e-commerce law will help meet the market's development needs, protect consumer rights, and promote sustainable digital economy growth in Vietnam.

According to the e-Conomy SEA 2024 report by Google and its partners, Vietnam's e-commerce has experienced remarkable growth of 20% in 2024 compared to 2023, with a total e-commerce trade value of $25 billion. This has significantly contributed to the country's digital economy growth, despite global economic uncertainties. This trend presents an opportunity for Thai businesses to expand into the Vietnamese market, especially in the growing e-commerce sector.

However, the development of new e-commerce laws in Vietnam may impact Thailand in terms of trade and business competition, particularly in cross-border e-commerce. The requirement for businesses operating e-commerce activities in Vietnam to register and set up representative offices in the country will introduce new regulations that may affect Thai businesses trading through e-commerce platforms in Vietnam. Thai companies will need to adapt to comply with Vietnamese laws and may need to invest further in establishing offices or appointing representatives in the country.

The rapid growth of Vietnam's e-commerce market also compels Thailand to develop regulations and consumer protection measures in e-commerce to stay competitive in the ASEAN market.

(2025/02/16-00:00)