Dive Brief:
- Amazon will announce details Wednesday regarding its new partnership with the Vietnam E-commerce Association (VECOM) at the Vietnam Online Business Forum 2018, according to the Nikkei Asian Review.
- VECOM is the largest consortium of local online sellers in Vietnam. The partnership would allow more Vietnamese sellers to sell and export via Amazon, and vice versa.
- For Amazon, moving into Vietnam is a strategic competitive move against Alibaba, the Chinese e-commerce company that is growing much faster than Amazon in global markets.
Dive Insight:
While Amazon dominates U.S. e-commerce, it's still fighting Alibaba for global dominance, and that means moving closer to Alibaba's home turf.
The Nikkei Asian Review reported that after being in Vietnam for just a year, Alibaba made "thousands" of new business members, while only 200 Vietnamese sellers are using Amazon.
Moving into Vietnam will amp up the competition, and likely spur new innovation within the e-commerce space. Chinese tech companies are far more integrated and savvy about multi-use tech platforms than U.S. tech companies are.
According to Bloomberg, Alibaba generates revenue through advertising, while Amazon presumably relies on its Amazon Web Services — but Alibaba's web services grew at a higher rate in 2016 than Amazon.
Alibaba also offers more services to consumers than Amazon. With Alibaba, a consumer can make payments on bills or loans, book and pay for appointments. While Amazon certainly has its hand in a variety of industries and services, Alibaba is way ahead of the game.
By moving into Vietnam, Amazon may need to follow Alibaba's innovative lead to snag more sellers and customers, or else differentiate enough that it can attract a different seller and customer base.