When discussing e-commerce it is important to identify exactly how the term is defined. For the purposes of this website, e-commerce is essentially any electronic transaction between 2 or more parties which involves goods or services. E-commerce thereby includes business-to-consumer (B2C) transactions, business-to-business (B2B) transactions as well as electronic-government (E-Gov). The term as it is used here does not however include person-to-person transactions, i.e. email, Instant Messenger, browsing the Internet, etc.

At present in Vietnam there seems to be an initial tendency towards caution and non-progress when it comes to developing a solid e-commerce system. That's not to say that many Vietnamese web sites don't already exist and function, however e-commerce as a trend doesn't seem to be spreading as fast as the infrastructure behind it.

It is easy to understand why Vietnam is not further ahead in developing e-commerce by looking at many of the barriers preventing the use of e-commerce systems. Listed below with descriptions are the barriers to e-commerce in Vietnam (For additional information straight from the Vietnamese government see the Speech given by Hoang Minh Cuong, Technical Manager for the Vietnam Internet Network Information Center, in 2001 (24)):

• The idea of using credit cards/electronic payment systems to conduct business has not been established in Vietnam, as historically Vietnamese have paid in cash.
• The people of Vietnam have traditionally conducted business in a face-to-face manner.
• Internet usage is still relatively low (See Diffusion Overview).
• Internet and telecom charges are still relatively high especially compared to average salaries.
• Livings standards are low with a GDP/person of $1755 US (24).
• Banks are behind the times in terms of EDI and linking electronically.
• Information and business transactions on the Internet are regulated by 22 different agencies under the Vietnamese Government (See Government Organization Chart) causing inordinate confusion and a lack of cohesive policy.
• Only infrastructure has been developed and consequently not the legal framework and policies/regulations needed to sustain domestic Internet commerce or international Internet commerce.
• Vietnamese financial system has traditionally consisted of government-issued forms which have not been updated to reflect newer technologies.
• Imports and exports are still required contracts to be signed by both trade entities, making international commerce difficult..
• Online transaction security is needed to make users feel more comfortable.

These barriers help to show why e-commerce is not a more attractive technology in Vietnam at the current time. In fact a mere 3% of the total 60,000 companies in Vietnam have ever utilized e-commerce with only another 7% intending to do so in the future (25). This trend does not look to be subsiding in the near future as is demonstrated in the B2C, B2B, and E-Gov sections of this website.