Big players like Alibaba, JD.com, Shopee, and more have been investing in Vietnam’s eCommerce industry recently, giving the Southeast Asian country heightened attention. Vietnam’s eCommerce market is expected to bring in US$4.4 billion by 2024, with a compounded annual growth rate of 7.1%.1 If you’re thinking about entering an emerging market with great potential, it helps to have a bit of background on the country before shipping into Vietnam.
To help you navigate the possible issues you might face when shipping to Vietnam, here are some steps you can take to ensure smooth international deliveries.
If you’re looking to start shipping to Vietnam, you’ll generally need to follow these steps:
Finding the right shipping partner
Packaging your goods
Choosing the right level of service
Providing shipping details
Printing the shipping labels and documents and attaching them to your package
Passing the shipments to the carriers
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In any form of cross-border shipping, carriers tend to follow these few stages:
As an example, an Indonesian merchant could have their goods shipped via truck from their premises in Jakarta to Soekarno-Hatta International Airport (CGK) where it is cleared for export. Then, it is transported via air freight to reach Tan Son Nhat International Airport (SGN) and goes through customs clearance. After that, it gets transported to a local distribution facility to be picked up by the last mile delivery van or motorcycle. These vehicles then travel from the distribution facility to your customer’s address in Ho Chi Minh City.
One way to save money on shipping is to use multiple smaller, localised shipping partners at different stages of the delivery, but this may prove hard to manage, especially when there are so many choices. Fortunately, there are eCommerce shipping partners with wide networks of logistics service providers which provide great coverage in Vietnam who can manage these logistics partners for you at a similarly competitive rate.
With regard to international freight, you generally have two options to ship goods to Vietnam:
For many eCommerce merchants, air freight is the transportation of choice for fast and reliable deliveries. International shipments usually enter Vietnam via Tan Son Nhat International Airport in Ho Chi Minh City (SGN) and Noi Bai International Airport in Hanoi (HAN).
Sea freight is cheaper but slower than air freight. Consider your delivery deadlines and shipping model before picking this option. Vietnam’s primary ports for cross-border shipping are Saigon Port (VNSGN) and Hanoi Port (VNHAN).
Vietnam relies on railways and road networks for local transportation. However, it is estimated that 8000 new motorbikes and 750 new cars join the 45 million vehicles currently on the streets of Vietnam every day, creating more congestion problems on Vietnam’s road networks.3 On average, deliveries to places outside of Hanoi and Ho Chi Minh City will take an additional two to four days so this should be communicated to your customers in advance if they are located in these places.
Operators do not work on sundays and public holidays, which may delay shipments, especially during the Tet holidays, also known as Lunar New Year. This holiday period lasts a week from 3 February to 10 February in 2019. In light of all this, you should check with your shipping partner to see how deliveries might be affected by these dates and be ready to ease your customers’ expectations when these delays happen. You can also check out when Vietnam has its public holidays on our Vietnam country page.
Appropriately packaging your products with the right packing materials is important in cross-border shipping. Packages may be subject to rough handling during its cross-border shipment to Vietnam, so including additional packing materials like bubble wrap or packing peanuts helps prevent your products from bouncing around within the package during shipment. These practices help prevent damage to your product when shipping and can save you money on replacing damaged goods.
Carriers usually offer multiple tiers of service in shipping. These delivery options mainly differ in their offered features, such as:
Real-time tracking & tracing
Free pick-up at origin address
Compensation in the event of loss of shipment
On-call customer service
Typically, the more features offered, the higher the shipping fee is. Choose one that best suits your budget and shipping needs. When planning your shipment, you can consult your shipping partner for recommended steps in packaging your goods for transport.
Carriers will need merchants to provide shipping details to generate the documentation required by Vietnam’s customs. Additionally, the documents supplied have to be in Vietnamese.4
The type of information most carriers require are:
This information will be entered into a Customs Declaration form and shipping label by either you or the shipping partner if they offer this service. Always check that this information has been entered accurately. Incomplete documentation may trap your goods in customs. It’s good to be as accurate as possible when preparing these customs documents. Additional shipping charges could arise if the shipping company returns the packages to you. Under-declaring the value of the items of your shipments on the commercial invoice could result in fines if the custom clearance agencies correctly suspect it. The courier may also charge you additional fees for undervaluing your goods.
Print and paste the shipping label, which contains the information you’ve entered in the previous step, securely onto the parcel. The addresses and bar-codes on the shipping label must be in clear view for identification and customs inspection. Ensure the shipping documents can be found on the package. One way to do this is to place all supporting documents inside a clear plastic pocket and tape it onto the package. Do note that some of these documents, such as the customs declaration and commercial invoice, will require the sender’s signature.
Depending on the delivery option you’ve selected and service level the carrier offers, the carrier will collect the packages from you either at your specified sender address or at one of their drop-off points in your origin country. If your selected service level includes track and trace, you’ll receive a tracking code for your package after your carrier receives the package. Your customer can also use this tracking code to find out where the package currently is.
While the actions required usually ends once the package is in your logistics service provider’s hands, the shipping journey involves more processes that the logistics service providers carry out on your behalf.
Customs clearance requires you to have the right documentation at hand to avoid delays. Depending on the value of your shipments, you may have to pay customs taxes and duties.
Vietnamese Customs require extensive documentation prior to clearing goods for import. If your logistics service provider is helping you clear your product through customs, they will normally engage with experienced customs brokers who are familiar with the procedures and required format of documentation.
Minimally, the carrier must present the following to the relevant agencies:
If you are planning on shipping without a logistics partner who can clear customs on your behalf, you’ll need the following:
If your shipment value is lower than Vietnam’s de minimis value of VND 2 million, you won’t be charged duties and taxes for your shipment. A de minimis value is a threshold where any shipment whose value is above it will be charged duties and taxes at customs.
If your shipment is valued above VND 2 million, you will have to cover the following duties and taxes:
Import duties also vary depending on the type of goods being imported. To identify the type of goods entering the country, Vietnam follows an internationally agreed upon method of classifying goods called the Harmonized System Classification of Goods (HS Codes). You can use this tariff finder on Vietnam’s official customs website to see how much duties your shipment will be charged based on its HS Code.5
Please note that certain types of items will be subject to different taxes, such as the Special Sales Tax and Environment Protection Tax.
The Special Sales Tax applies to certain commodities and services, with commodities including cigarettes, liquor, beer, automobiles having less than 24 seats, motorcycles, airplanes, boats, petrol, air-conditioners up to 90,000 BTU, playing cards, and votive papers as mentioned by PricewaterhouseCoopers.
The Environment Protection Tax applies to the production and importation of certain goods deemed detrimental to the environment, the most significant of which are petroleum and coal. For more information, you can refer to PricewaterhouseCoopers’ tax information or Vietnam’s Law in English.
Once again, to ensure that your package doesn’t get stuck in customs, it is important to work with a logistics provider who is well-versed with the latest developments in Vietnamese customs regulations to better navigate the ever-changing landscape of customs processes.
A significant 92% of online shoppers in Vietnam prefer cash-on-delivery (COD) when it comes to receiving their products.6 Choosing to offer COD is a worthwhile option to consider if you’re thinking of breaking into the Vietnamese eCommerce market.
However, not every logistics provider supports COD because of the additional payments infrastructure and processes needed to offer this payment method. Should you decide to offer this payment option on your eCommerce site after weighing the pros and cons, you will need to find a logistic partner that is able to facilitate it.
With high growth potential in its eCommerce landscape and a young, educated, and digitally savvy population, Vietnam is a viable market to break into if you’re planning to expand your international eCommerce business.
All the steps involved in cross-border shipping to Vietnam may sound complicated but having the right shipping partners can greatly simplify things for you. By engaging with reliable and proficient shipping partners at every step, or even a single partner who can handle all the steps, you’ll be on your way to seamless cross-border shipping to Vietnam.
If you’d like to find out more about how we can solve your SEA eCommerce cross-border delivery needs, come and have a conversation with us.
Interested in eCommerce in Vietnam? Find out more about Vietnam’s eCommerce and also our ‘How to Ship to Southeast Asia Series’
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