Luận văn thạc sĩ UEB e commerce development in agricultural trade promotion in vietnam

The imperative of subject

Internet was born as a turning point in communications history of mankind and plays more important role in all activities of man Experienced two boom in 1986,

Since its inception in 1991, the Internet has transcended the limitations of space and time, revolutionizing various sectors, particularly in economic activities and trade This evolution gave rise to the concept of Electronic Commerce (E-commerce), which has since emerged as a global trend Today, E-commerce is rapidly advancing and serves as a significant driver of economic growth worldwide.

E-commerce has gained immense popularity in developed countries, transforming consumption habits and leading to a steady increase in the proportion of online transactions in comparison to traditional trading In the agricultural and food product sectors, the integration of E-commerce enhances product distribution, enabling customers to access goods quickly This shift not only improves customer experience but also generates significant revenue for companies, exemplified by platforms like Alibaba.com and Japonshop.com.

E-commerce in Vietnam has experienced significant growth in recent years, evolving rapidly alongside advancements in Internet technology The 2009 E-commerce report from the Ministry of Industry and Trade (MoIT) highlights that online trading has gained popularity, particularly among office workers and students in major urban areas.

E-commerce has emerged as the leading method for online trading, facilitating the buying and selling of goods and services through dedicated websites Numerous businesses, particularly in the aviation, tourism, and supermarket sectors, have successfully leveraged e-commerce platforms to reach a wider audience and enhance their sales.

With the situation as on the development, sale and purchase of goods and services online has become a real trend, and certainly there will be strong growth in the

1 Viet Nam E-Commerce Report 2009, Page vi. coming period as electronic payments become more popular and are familiar with both individual consumers and businesses.

The Trade Promotion Center for Agriculture (Agritrade), a department of the Ministry of Agriculture and Rural Development (MARD), is responsible for implementing trade promotion activities in Vietnam's agriculture and rural development sectors Located at No 2 Hoang Quoc Viet Street, Cau Giay District, Hanoi, Agritrade manages the Exhibition Fair and Commerce Transaction Area Each year, Agritrade organizes numerous trade promotion events both domestically and internationally, including the notable International Agricultural Trade Fair (Agroviet), workshops, training sessions in various provinces, and market research initiatives in foreign markets.

Agritrade has established a permanent display area at the "Exhibition Fair and Commerce Transaction Area" to showcase and promote agricultural products and local specialties to markets in Hanoi and surrounding provinces This initiative aims to help various agricultural products, such as Gao tam Dien Bien, Seng Cu rice, Da Dui rice, and Son La mushrooms, gain market presence and build stable brands Agritrade envisions this display area evolving into a major agricultural showroom, serving as a hub for sellers and buyers to exchange product information and negotiate deals By integrating display areas with trade promotion events, Agritrade effectively bridges the gap between producers and consumers.

The effectiveness of current display areas and traditional trade promotion programs for agricultural products in Vietnam is limited, highlighting the need for new models to enhance trade promotion Embracing e-commerce presents a promising solution to improve the efficiency of agritrade, aligning with contemporary trends and addressing existing challenges in the sector.

In light of current trends and the growing importance of e-commerce, adopting an e-commerce model is essential for Agritrade This approach not only enhances the promotion and marketing of regional agricultural products but also supports the strategic expansion of the business into the digital marketplace.

Establish the main research subject

Through the learning process, survey and investigation, the authors found that the required objectivity and subjectivity are imposed Agritrade in the short term (1-3 years) and long term are:

- AGRITRADE will become a focal point for trade promotion activities in Vietnam Agriculture.

- Approach E-commerce development trend and apply IT into operation on promoting agricultural products and local specialties.

- Develop E-commerce model to provide a link between producers, traders and consumer of agricultural products.

So I would propose the subject of my graduate thesis is “ E-Commerce development in agricultural trade promotion in Vietnam ”.

Research’s objectives

- To systematize basic concepts relating to E-commerce model and trade promotion.

- Survey and research the activities of trade promotion activities of agricultural products and local specialties at Agritrade.

- To propose solutions to develop E-commerce for agricultural trade promotion.

Research scope

The research focuses on the micro-level aspects of agribusiness, specifically within the context of Agritrade It aims to explore fundamental concepts related to agricultural trade, assess the current agribusiness landscape, and propose innovative solutions for enhancing E-commerce models to promote agricultural trade activities effectively.

The research on time focused on studying the subject and gathering survey data from January to March 2010 at Agritrade, supplemented by relevant secondary data collected over the past three years.

Delimitation of the research’s contents

The basic elements of E-commerce model

Table 0.1: The basic elements of E-commerce model for agricultural trade promotion

Developing a useful channel for both providers and Value targets consumers, ensuring that the process of resource management is done strictly, comprehensively and effectively.

Revenue models Products trading are agricultural products and local specialties provided by the providers, producers and other source.

Market Trend of internet shopping in Vietnam created a potential opportunities market for trade agricultural products online.

The comprehensive assessment of an enterprise's competitive landscape involves analyzing key metrics such as competitor numbers, revenue, and profits Furthermore, the growing quantity and quality of suppliers serve as a critical foundation for evaluating market potential.

That is main task of Agritrade, so it should have the

Achieving competitive consistency requires a clear direction and the establishment of favorable conditions in infrastructure, finance, and personnel for effective model deployment Additionally, support from functional departments and crucial assistance from the Ministry of Agriculture and Rural Development (MARD) play significant roles in this process.

Researching and developing a convenience and simple E- commerce website for providers and customers.

Market strategy Planning for implementation of activities to promote website.

Providing marketing campaign to show about the website and organizing training courses to help sellers know how to sell their products online.

Organizational The company wanted to sustainable development needs a well organized system to ensure effective implementation of plans structure and business strategy.

A strong management team is essential for developing effective enterprise management strategies Effective governance within the team enables timely decisions to adapt or restructure business models as necessary, ultimately enhancing customer confidence in the organization.

Assign content to develop E-commerce model for Agritrade

This research aims to develop an E-commerce model for Agritrade by employing comprehensive survey methods to evaluate the current state of its operations It includes an overall assessment of internal and external impact factors, alongside an analysis of data gathered from surveys and interviews with Agritrade staff, customers, and agricultural experts The findings will inform the feasibility and strategic plans for implementing an effective E-commerce model tailored to Agritrade's needs.

Leveraging survey findings and comprehensive analysis of both primary and secondary data, I will create an E-commerce model that addresses key market factors, human resources, financial aspects, and infrastructure requirements Additionally, I will enhance the sales process, streamline order management, and ensure efficient product delivery alongside other essential support services.

Research methods

Data collection methods

6.1.1 Method of investigation of primary data

+ Candidates of survey: The main Candidates of survey are Agritrade’s staffs and customers (suppliers, producers and buyers).

 For Agritrade’s staff: promotion situation of agricultural products, needs, capabilities and methods of application E-commerce model.

 For customers of Agritrade: The need of the applying E-commerce model on promoting agricultural products.

 For Agritrade’s staff: issue and collect directly at the Agritrade’s office.

Agritrade prioritizes its customers by engaging with providers, producers, and consumers in the Northwest provinces Most questionnaires are distributed and collected during visits and exhibitions at Agritrade's trade fairs, while others are sent via email to officers and students.

The survey data will be collected and updated in a Microsoft Excel database for efficient processing and analysis This method aims to gather information quickly and cost-effectively, ensuring precise handling for accurate assessment and results.

+ Advantages and disadvantages of this method

 Advantages: Fast, convenient and efficient.

 Disadvantages: customers have little time to study carefully the questionnaire and they may feedback with incorrect answers.

+ Sample of survey: I issue 45 questionnaires to Agritrade’s staffs and 30 copies to the Agritrade’s customers.

In an insightful interview, experts discussed the future of the agricultural products and foodstuffs market, emphasizing the importance of strategic business initiatives related to local specialties They highlighted the necessity of adopting an appropriate e-commerce model to enhance current trade promotion activities at Agritrade Additionally, the conversation addressed the challenges and advantages of implementing e-commerce solutions in promoting agricultural products, underscoring the potential for growth and innovation within the sector.

+ Method of Investigation: Organizing Interview at Agritrade’s office.

+ Objects of interview: Director and head of Business Department.

+ Advantages and disadvantages of this method:

The advantages of this assessment include the observation of visual attitudes and responses to questions, which will allow us to evaluate the accuracy of the information provided Additionally, we will gather subjective comments from Agritrade regarding agricultural practices.

 Disadvantages: Difficult to get an overview and objective assessment of the market, the business model of Agritrade.

6.1.2 Methodology of Survey with secondary data

Through documents, reports and statistical relevance of reputable sources such as E- commerce report of Ministry of Industry and Trade, the relevant documents on the website of Agritrade

Data analysis methods

The synthesis and analysis of data rely on average values, utilizing Microsoft Excel to process the collected survey results through statistical models Company performance statistics are presented using detailed analytical illustrations and diagrams for clarity.

Evaluating information through well-structured interview questions is essential, ranging from broad industry insights to specific company analyses Utilizing a meta-analysis approach with an inductive method allows for the assessment of various issues, facilitating the collection and identification of common characteristics and trends.

THEORETICAL FRAMEWORK

E-commerce

E-commerce, also known as online trade, cyber trade, electronic business, or paperless commerce, is a rapidly evolving field that has gained significant recognition in recent years The term "E-commerce" has become widely accepted and is now commonly referenced in international legal documents, although other names continue to be used interchangeably within the industry.

- The concept of e-commerce in the narrow sense

In narrow sense, E-commerce merely restricted in sale and purchase of goods and services through electronic facilities, especially Internet and other communication networks.

E-commerce, as defined by the World Trade Organization (WTO), refers to the electronic exchange of goods across borders, encompassing the production, advertising, sale, and distribution of products through telecommunications networks Notable examples of electronically distributed products include books, music, and videos delivered via telephone lines or the Internet.

According to the E-commerce Commission of the Asia - Pacific Economic Cooperation (APEC), “E-commerce is business that conducted through the data transferring and digital information technology.”

- Broadly defined concept of e-commerce

In broad sense, E-commerce is financial and commerce transactions by electronic means such as electronic data interchange, electronic funds transfer, sending or withdrawals by credit card and other activities.

According to this view, there are two definitions generalize the most complete range of E-commerce activities:

1 Source : “Thương mại điện tử”, www.wikipedia.org

2 Understanding WTO: Electronic Commerce, www.wto.org

The UNCITRAL Model Law defines E-commerce as encompassing a broad spectrum of economic activities, with the sale and purchase of goods and services being just a small part The term "commercial" is interpreted broadly to include all types of commercial relationships, whether contractual or not These relationships cover a wide range of transactions, including trade for goods and services, distribution agreements, agency relationships, factoring, leasing, construction, consulting, engineering, licensing, investment, financing, banking, insurance, exploitation agreements, joint ventures, and various forms of industrial or business cooperation, as well as the transportation of goods or passengers across different modes of transport.

E-commerce, as defined by the European Commission, involves conducting business through electronic means, encompassing the processing and transmission of electronic data in various formats, including text, sound, and images This broad definition indicates that "Commerce" in "E-commerce" extends beyond traditional trade in goods and services, signifying a transformative impact on the operational dynamics of most economies.

E-commerce refers to the various business strategies and management processes conducted through electronic channels, primarily relying on the Internet and its associated technologies It is essential to recognize that E-commerce does not merely transform traditional business media; rather, it necessitates a comprehensive integration of business functionalities to operate effectively.

Enterprise application integration traditionally focuses on connecting systems with varying features across organizational boundaries A fundamental technology for e-business, enterprise content management (ECM) plays a crucial role in this integration process.

1 UNCITRAL Model Law on Electronic Commerce with Guide to Enactment 1996, Page 3.

E-commerce and traditional commerce, including the steps:

1 Consumers and providers find each other, consumers want to find a reliable supplier, while suppliers are conducting promotional activities, marketing, consulting and customer support, create trust and entice consumers to own.

3 Organization coordination and delivery of goods;

5 Confirm the correctness of every step in the purchasing process.

E-commerce distinguishes itself from traditional trade through its unique characteristics, including the ability to establish a "virtual store" that operates around the clock, every day of the year, effectively eliminating the constraints of time and geographical distance This online platform allows for direct transactions without intermediaries, fostering the development of online marketing channels and facilitating online surveys E-commerce is particularly effective for delivering various materials and services, such as movies, music, e-books, software, and consulting Success in the digital economy relies not solely on large companies with substantial resources, but rather on the agility and adaptability of businesses to swiftly respond to economic changes, whether in the virtual realm or beyond.

The formation of E-commerce

E-commerce was born as an inevitable development in the harsh competitive environment To survive, Businesses must apply technological advances in effective way IT brings the magic of transformation itself and affects most sectors including the economy It changes the world The development of mature tools such asInternet, Email, and World Wide Web is the reason to release a new trading method: E-commerce.

Traditional transactions involving documentation are costly and time-consuming, significantly impeding international trade, especially as trading volumes rise Additionally, these conventional methods expose numerous weaknesses Consequently, now is the ideal moment to introduce new trading methods that offer greater advantages.

In 1969, the US Department of Defense launched the Advanced Research Projects Agency Network (ARPANET), marking the inception of the world's first operational packet switching network and the foundation of the global Internet During this period, the financial services industry began embracing automation, leading to advancements in check processing, credit card transactions, and Electronic Funds Transfer (EFT) for online payments By the early 1980s, e-commerce activities expanded through electronic data interchange (EDI) and email, enabling businesses to exchange essential documents like purchase orders By the late 1980s, e-commerce became a vital component of business operations, although it was not yet fully integrated into the public Internet This era also saw the emergence of e-commerce technology, which, despite its potential, remained unfamiliar and often cumbersome for users.

The launch of the World Wide Web in 1992 revolutionized the Internet, making it more user-friendly with improved interfaces and graphics, significantly reducing the technical skills required for navigation compared to earlier times.

E-commerce is developing rapidly on the global scale based on the industrial development of information technology (IT) IT industry is gradually occupied the leading position in the national economy of many countries Especially the organic combination of three components: industrial computers (networks, computers,electronics, software and other services), communications (landline telephone and satellite) and internal information (databases, audio-visual products, entertainment, publishing and providing information ) This combination is creating a new nature and role of the IT industry.

The situation of E-commerce development in Vietnam

The number and quality of websites play a crucial role in assessing the growth of E-commerce, even though they do not directly measure E-commerce application levels In Vietnam, as the integration of strategic partners for direct electronic data exchange continues to evolve, websites remain the primary platform for businesses to showcase products, promote services, and facilitate both B2B and B2C E-commerce transactions.

According to a 2005 E-commerce report by MoIT, 46.2% of 504 surveyed enterprises had a website, primarily located in urban areas with robust IT infrastructure By 2008, a survey of 1,600 companies revealed that most had adopted E-commerce applications to varying degrees, with investment in E-commerce proving beneficial The percentage of enterprises with websites rose to 45%, a 7% increase from 2007, and the number of regularly updated websites featuring online ordering functions grew significantly.

In 2010, nearly all surveyed businesses were adopting E-commerce applications across various sizes and levels, with 100% equipped with computers, averaging 25.8 per enterprise Additionally, 98% of these businesses had Internet connections, predominantly through broadband (ADSL) and leased lines, while over 81% utilized email for business purposes, with usage rates of 96% among large enterprises and 80% among small and medium enterprises.

After four years of implementing the overall Plan for E-commerce development from 2006 to 2010, E-commerce is not only located on two major cities, Hanoi and

Ho Chi Minh City, it has grown at most provinces of the country In the survey in

In 2009, a survey conducted by MoIT revealed that 53% of the enterprises surveyed were situated outside of Ho Chi Minh City and Hanoi The findings indicated that all local businesses were equipped with computers, averaging 21.5 computers per enterprise, which translates to approximately 10.3 employees sharing one computer Additionally, most local businesses were connected to the Internet, primarily through ADSL, with only about 2% relying on dial-up connections.

In recent years, the rapid growth of the Internet and e-commerce has made online sales increasingly popular among urban professionals, students, and homemakers The primary method of online shopping is through e-commerce websites, which gained traction by late 2009 for various products and services, including airline tickets, electronics, and hotel bookings Businesses have adapted their payment and delivery methods to cater to diverse consumer needs, with online payments, bank transfers, and cash being the most common options Additionally, the rise of social networks with large member bases has transformed them into viable marketplaces, prompting businesses to invest in targeted strategies for engagement and sales As sellers interact directly with customers through these platforms, online trading is solidifying its status as a significant trend, poised for substantial growth as electronic payment methods gain popularity among consumers.

A recent survey of E-commerce website owners revealed that 87.6% of businesses prioritize B2B transactions, while 65.7% focus on consumer sales This indicates that B2B applications will be the preferred choice for companies looking to implement E-commerce solutions in the future.

The quality and professionalism of a website are significantly influenced by the frequency of information updates A survey revealed that over half of businesses update their websites once a month or less, with fewer than 30% conducting daily reviews Additionally, only about 30% of these websites feature E-commerce functionality These statistics indicate that many Vietnamese businesses fail to recognize the importance of their websites as vital communication and interaction channels with customers, leading to inadequate investment of time and resources in building, maintaining, and effectively utilizing their online presence.

A recent analysis revealed that 56.2% of businesses manage their own websites, while 43.8% rely on external service providers This disparity contributes to the subpar information and communication features observed on many websites.

A recent survey revealed that the investment in E-commerce applications constitutes a minimal portion of total annual operating expenses, with over 80% of businesses allocating no more than 5% of their operational costs to this area This investment covers essential aspects such as E-commerce software, website maintenance, and related human resources Only 14% of businesses invest between 5-15% of their total operating expenses, while a mere 3.6% exceed 15% in their E-commerce investments.

The operation forms and E-commerce transactions

1.4.1 The forms of E-commerce activities a E-mail

Email, or electronic mail, allows partners such as consumers, businesses, and government agencies to exchange information online swiftly and efficiently With its rapid transfer speed, emails can be sent to multiple recipients simultaneously from anywhere in the world at any time Additionally, the cost of sending emails is significantly lower compared to traditional mailing and telephone communication.

Electronic payment is payment via electronic messages instead of cash handing. With the development of E-commerce, electronic payment has expanded into new areas should be addressed:

 Financial Electronic Data Interchange (FEDI) specializes in serving the electronic payments between companies trading electronically with each other.

Internet cash, also known as digital cash, is a form of currency that can be purchased from banks or credit institutions and easily converted into other currencies online It is widely used both domestically and internationally, leveraging digital technology for transactions The growing popularity of internet cash is attributed to several advantages: it facilitates payments for small-value items and subscriptions with minimal transaction costs, eliminates the need for prior regulatory agreements between parties, and ensures that users receive real money, thereby reducing the risk of counterfeiting Additionally, electronic purses enhance the convenience of managing and using internet cash.

An electronic purse, often referred to as an electronic wallet, serves as a digital platform for managing internet cash, primarily utilizing smart card technology This system allows users to make payments seamlessly to anyone who can read the card, employing techniques akin to those used in internet cash transactions.

The card resembles a credit card, but instead of a magnetic strip on the back, it features an electronic chip designed to store digital currency securely.

15 that is paid only when used and the message (e.g confirmation of payment of invoices) be authenticated to be true. e Digital banking and digital securities trading

The electronic payment system in banks encompasses various sub-systems, including customer transactions through telephone and internet banking, electronic funds transfers, and credit card payments It also facilitates payments between banks and settlement agents, such as restaurants and supermarkets, as well as transactions within the banking system and between different banking systems Additionally, electronic data interchange plays a crucial role in streamlining these processes.

Electronic Data Interchange (EDI) enables the automated transfer of structured information between computers of different organizations, allowing them to conduct transactions without human intervention This commonly used method relies on pre-defined formats agreed upon by the trading parties, streamlining the exchange of data According to UNCITRAL, EDI plays a crucial role in enhancing efficiency in business communications.

Electronic Data Interchange (EDI) refers to the computer-to-computer transfer of information using standardized formats, facilitating efficient communication It is extensively utilized globally for purchasing and distributing goods, including sending orders, confirmations, shipping documents, and invoices Additionally, EDI serves various other functions, such as processing payments for medical examinations and exchanging test results Typically, EDI transactions occur over external networks (extranets), enhancing the speed and accuracy of business operations.

“commercial networks” (net commerce) EDI came out into society before Internet.

Value Added Networks (VAN) serve as essential platforms for connecting Electronic Data Interchange (EDI) partners, enabling seamless communication between electronic systems These networks facilitate the storage and retrieval of information, allowing businesses to interact with computers globally By leveraging VAN, companies can enhance their digital content delivery and streamline their communication processes across various locations.

Content data is the goods that people need its content (in other words, the content is a commodity) not themselves carrying content such as news, books newspapers,

The UNCITRAL Model Law on Electronic Commerce, established in 1996, encompasses a wide array of digital content, including music, movies, radio programs, television shows, and software Additionally, it extends to various advisory opinions and tickets for planes, movies, and theaters, as well as insurance policies, reflecting the evolving landscape of electronic transactions and content data.

In the past, content data was provided in physical formats such as disks, tapes, printed books, and packaging, which required users to visit distribution points like shops or newspaper stalls to make purchases Today, however, this content is digitized and delivered through networks, enabling a vast array of economic and business information to be readily available online Consequently, a crucial aspect of modern communication involves effectively utilizing the web and thoroughly analyzing the information accessed.

Sellers leverage multimedia and Java technology to create "virtual stores" for online sales Internet users search for these store websites, browse displayed products, and send confirmation messages to complete purchases using electronic payment methods Initially, this purchasing process was more basic, requiring buyers to select items and place orders through a form on the website.

E-commerce transactions involve three primary groups: businesses, government, and customers These transactions occur through various active forms of e-commerce and are conducted across multiple levels.

Figure 1.1: Models of E-commerce transactions

In these types of transactions mentioned above, these are three types will be common applied in Vietnam. a Business to Business transaction (B2B)

“B2B describes commerce transactions between businesses, such as between a manufacturer and a wholesaler or between a wholesaler and a retailer” 1

Electronic transactions between businesses have been around for decades, with EDI facilitating the exchange of orders, invoices, and receipts since the late 1970s Initially, only large enterprises engaged in these transactions due to the high costs associated with data transfer and training.

The rapid growth of Business to Business (B2B) e-commerce is transforming the landscape for companies, as it offers significant advantages such as reduced production cycles through collaboration with specialized partners This synergy allows businesses to leverage each other's expertise, enhancing efficiency and driving innovation in their operations.

Business-to-business (B2B) transactions enable companies to save time and reduce costs when sourcing and purchasing raw materials for their production processes By utilizing an online sales network, businesses can efficiently find and acquire the materials they need, streamlining their operations and enhancing productivity.

Benefits of E-commerce for businesses

E-commerce affects to most major types of business costs in the production process and conducting commercial transactions, including:

E-commerce significantly reduces costs for businesses by enabling them to replace multiple grocery stores with a single virtual platform that operates 24/7 This online presence allows companies to reach a broader customer base while minimizing management expenses, particularly in inventory management Additionally, the convenience of 24-hour access enhances the customer experience, making it a key advantage of virtual business operations.

The rise of online product and service information empowers customers to enhance their skills in evaluating prices and understanding implementation processes In the evolving E-commerce landscape, consumers will have consistent access to comprehensive product details and pricing information, fostering improved communication with sales and support teams Additionally, E-commerce enterprises can achieve significant cost savings by utilizing direct payment methods on their websites; for instance, while traditional bank service fees for paper check transactions can reach approximately $1.20, electronic payment processing costs can be reduced to around $0.01 or even less.

Clearly, E-commerce is changing fundamentally the sales process of the enterprise.

Businesses in the market are now compelled to rethink their communication strategies with customers Additionally, new entrants must conduct thorough research to effectively embrace e-commerce, leveraging its benefits to reach and engage new customers.

- Expenses related to procurement of the enterprise

E-commerce significantly impacts procurement costs for businesses, particularly in the area of maintenance, repair, and operations (MRO) This influence extends beyond the expenses associated with acquiring final products and raw materials, highlighting the broader implications of online purchasing on overall procurement strategies.

In traditional commerce, the procurement of MRO supplies involves a lengthy process where purchasing staff submit requirement forms and sift through various catalogues to find suitable products at competitive prices, often leading to administrative costs that exceed the value of the items themselves According to the OECD, companies with revenues over $500 million incur costs of $75 to $150 for each MRO order By leveraging e-commerce, businesses can streamline this procurement process, connecting buyers directly with suppliers through online platforms This integration of electronic catalogues allows companies to quickly locate necessary products and verify product information, ultimately reducing input costs and enhancing efficiency.

In the past, large companies relied on proprietary value-added networks (VAN) for MRO supply through EDI systems However, the cost of EDI on the web has significantly decreased, now being only one-tenth of that on VAN As a result, many large organizations are transitioning their MRO procurement from VAN to online platforms.

E-commerce has changed the logistics activities of business such as packing,delivery and turns it into information- business The impact of E-commerce to the cost of logistics enterprises is great significance, especially for logistic companies such as Federal Express (FedEx) or DHL.

FedEx is a good example It began receiving orders online, shipping parcel packages and tracking them through their own networks since 1983 It took nearly

In just 12 years, the company grew its client base to 50,000, but within a remarkable three-year period from 1995 to 1998, it adopted FedEx-like services online, skyrocketing its customer count to 1 million Today, it estimates that over 70% of the 3 million packages and parcels processed daily are generated through the Internet.

Internet applications have empowered enterprises to swiftly manage complex orders while effectively tracking and monitoring them Consequently, leading logistics companies like DHL, FedEx, and United Parcel Service (UPS) now offer comprehensive logistics services—including transport, distribution, packing, loading, and unloading—through their websites.

In today's digital landscape, businesses can effortlessly track their packages globally, thanks to the advantages of the web This technology simplifies the monitoring of shipping and inspection of goods, streamlining the payment process for faster transactions Furthermore, it provides businesses with the flexibility to make informed decisions regarding production plans, ultimately reducing unnecessary costs associated with transportation and unloading.

In summary, by changing the structure, cutting costs of sales, cost of procurement and cost of logistics, E-commerce are making new success factors.

The advancement of IT and communications has enabled businesses to trade and collaborate at unprecedented speeds and lower costs E-commerce has fostered the emergence of interconnected business groups, establishing new production divisions and rules that enhance efficiency beyond traditional unstructured networking This "virtual networking" mechanism allows enterprises to share real business risks, promoting innovative cooperation across various activities through comprehensive reform.

Early adopters of E-commerce often benefit from favorable conditions to develop innovative business models However, as E-commerce transactions become dominated by large enterprises, creating new models becomes increasingly complex Companies that redefine their strategies based on technology face heightened risks if their leaders fail to clearly articulate the rationale behind these strategic shifts A notable example is IBM's 1996 initiative, where they launched two significant projects: an electronic content platform and World Avenue, an E-supermarket IBM recognized early on that they lacked essential skills in editing, marketing, and retail, which ultimately hindered their success.

To operate as a 24/7 enterprise, businesses must prioritize the qualifications and adaptability of their workforce, alongside fostering innovative capabilities In the fast-paced world of e-commerce, companies must continuously learn to navigate the complexities of evolving markets and technologies This involves acquiring and processing diverse information to innovate effectively, ensuring a deep understanding of their own operations, as well as insights into customers, suppliers, and market dynamics.

The E-commerce requirements

E-commerce is not a spontaneous initiative; it is the consequences of the development of digitalize IT, and the electronic computer engineering Therefore, we just only really have and truly carry out rich content and effective E-commerce when we have a stable infrastructure of information technology (including the two divisions: electronic computing and electronic media).

This infrastructure encompasses both national and enterprise standards, aligning them with international benchmarks in engineering and technology It serves not only individual businesses but also functions as a national system, integrating into a broader global information technology framework that includes worldwide distribution networks and telecommunications Additionally, it is designed to support individual trading systems tailored to the needs of consumers.

Technological infrastructure encompasses both availability and affordability, highlighting the importance of accessible and cost-effective IT equipment and communication services This is particularly crucial for developing countries, where low living standards make affordable access to technology essential for economic growth and development.

The rapid growth of E-commerce has led to an increasing emphasis on integrating advanced security technologies into its infrastructure Ensuring security and safety is crucial not only for the economic stability of organizations but also plays a vital role in national security.

E-commerce touches to all people, from consumers to producers, distributors, government agencies, and both the technology and development.

The rise of e-commerce necessitates two key requirements: first, individuals must be proficient and comfortable with online activities; second, there is a critical need for skilled IT professionals who can stay updated with emerging technologies to support the digital economy and e-commerce, as well as develop software tailored to the operational demands of this digital landscape, reducing dependence on external resources.

In the realm of online business, proficiency in English is essential for all participants, as it serves as the primary language for both traditional trade and e-commerce This requirement poses a significant challenge, particularly for developing countries, highlighting the need for substantial reforms in education and training systems to accommodate the demands of e-commerce.

Commercial transactions by electronic is setting up very high demands on security and safety, especially when it operates on the Internet/Web.

Many individuals remain hesitant to conduct business online due to concerns over security and data protection Buyers worry about the potential exposure of their credit card information, which could lead to unauthorized transactions by malicious actors Sellers, on the other hand, fear that buyers may not fulfill their payment obligations in electronic agreements Additionally, the increasing frequency of cyberattacks, even on well-secured networks, heightens these concerns Hackers employ various tactics, including phishing, password cracking, and sophisticated methods like IP spoofing and Denial of Service (DOS) attacks, further exacerbating the sense of vulnerability in online transactions.

Modern encryption techniques, such as public key cryptography with key lengths of 1024 to 2048 bits, along with technologies like SSL (Secure Sockets Layer) and SET (Secure Electronic Transaction), are essential in addressing security challenges Digital signatures, represented by electronic bits and validated through decoding, enhance the integrity of digital communications However, advanced decoding methods can potentially compromise encryption Consequently, developing a national strategy for encryption alongside robust information safety programs for agencies, enterprises, and individuals is increasingly critical.

E-commerce can only be done when there actually exists a development financial payment system It allows automatic payments (smart cards that have special importance for retail business) Without this system, the E-commerce application is only exchange the information and transaction still ends with direct payment or the traditional means of payment Then the effects of E-commerce are lower and it may not enough to offset the costs of technology equipment spent.

The financial payment system linked to product coding and numbering is a global issue governed by international standards set by EAN International and the Uniform Code Council, which utilize barcodes Each product and service is identified through a 13-digit number, while companies are assigned a unique code number ranging from 100 onward.

100 000 digits The integration and establishing the system of product and companies code (commercial coding) for an economy (especially the economies of developing countries) is not simple.

Market collapses often stem from asymmetric information, a concept rooted in trade and information theory This disparity arises when sellers possess knowledge about product quality that buyers lack Consequently, sellers struggle to assure buyers of their products' quality, leading buyers to settle for an average price Ultimately, this dynamic results in consumers predominantly purchasing low-quality products, as the sellers of high-quality items remain unidentified.

In E-commerce, buyers rely on digital information about products, lacking the ability to physically taste or trial items before purchase This raises concerns about potential database errors, misleading information, and the presence of fraudulent organizations online Consequently, there is a pressing need for an effective and cost-efficient quality assurance intermediary to mitigate these risks, which significantly affect consumer interests This is especially crucial in developing countries, where traditional practices involve direct interaction with goods—such as seeing, touching, tasting, and trying—prior to buying.

Governments must determine whether the information society and the Internet represent a threat or an opportunity, a challenging decision exemplified by France, which only concluded in 1997-1998 that it was an opportunity Following this strategic affirmation, France began to establish the necessary economic, legal, and social frameworks to support the digitized economy and E-commerce, implementing initiatives such as an administrative services network and enhancing services like income tax processing, mail, weather forecasts, and train schedules.

+ Recognize the legality of E-commerce transactions.

Recognizing the legality of electronic signatures is essential, as they are valid when applied to data messages and digital signatures Legal institutions and appropriate agencies are responsible for the authentication and certification of these electronic signatures Additionally, e-commerce contracts benefit from legal protection, ensuring that transactions conducted online are secure and enforceable.

+ Legal Protection of electronic payment (including the legislation of the agency issuing the payment card).

+ Legal Regulations for data that originate from state (government agencies and the Central Government), local government, state enterprises.

+ Legal protection for intellectual property rights (including copyright) relating to all forms of electronic transactions.

Protecting privacy is essential to prevent the unauthorized disclosure of sensitive information, which includes not only names and faces but also personal details related to health, religion, political beliefs, gender, and education.

Definition and content of Trade promotion

Base on the Commercial Law 2005 of Vietnam, Trade Promotion means activities of promoting and seeking opportunities for the purchase or sale of goods and

29 provision of services, including sale promotion, commercial advertisement, display and exhibition of goods and services, and trade fairs and exhibitions 1

Trade Promotion encompasses marketing activities conducted between retail partners to boost product demand in stores This technique utilizes strategies such as special pricing, display fixtures, demonstrations, value-added bonuses, and complimentary gifts to enhance customer engagement and sales.

1.7.2 The purposes of trade promotion

The purposes of trade promotion are supporting businesses to sell out their products when they face to the competition of others providers on the market.

Trade promotion plays a crucial role in business operations and is essential to the production process Many businesses and countries allocate a significant portion of their total costs—ranging from 10% to 25%—to trade promotion activities, which are reflected in the selling price.

Trade promotion activities particularly developed in the capitalist countries, where competition is regular occurrence and very severe on the market.

For that characteristic, the main purposes of using trade promotion as following:

Promotion policies have a large role in marketing activities of business With these policies, businesses can impulse product offering and sales, increase revenues, and improve business efficiency.

Promotion and business support activities enhance the efficiency of trade processes for enterprises, leading to increased sales volume This, in turn, enables companies to penetrate new markets, expand their market share, and attract a larger pool of potential customers As a result, businesses can achieve steady growth and navigate challenges in the marketplace effectively.

* Create competitive advantage for businesses

Trade promotion activities not only attract attention and interest of customers, but also enhance the prestige and reputation of the business In the long run, trade

1 Term 10, Article 3, Commercial Law of Vietnam, 2005.

Trade promotion activities enhance the image of a business and its products, fostering customer trust By leveraging these promotional efforts, businesses can attract more potential customers and gain a competitive edge in the market.

* Communicate information about business and products to consumers

The promotion policy aims to effectively communicate product and business information to consumers, ensuring they not only receive but also understand this information It is essential for the information to be useful, encouraging positive consumer engagement Without a promotion policy, businesses risk missing out on valuable feedback regarding product quality, design, after-sales services, pricing, and distribution networks.

Promotions are strategic marketing activities designed by traders to enhance the sales of goods and services by offering customers specific benefits The primary goal of these promotions is to stimulate consumer interest and encourage increased purchasing behavior.

Commercial advertising involves promotional activities by businesses aimed at introducing their products and services to potential clients It encompasses various elements such as images, actions, sounds, voices, words, symbols, colors, and lights, all of which convey advertising messages effectively.

Means of commercial advertising is including: the mass media, the means of communication, the types of publications, all kinds of boards, signs, banners, panels, posters…

1.7.3.3 Displaying and introducing goods and services

Displaying and introducing goods and services is the trade promotion activity of traders that use goods, services and documentation to introduce customers those goods and services.

Effective methods for showcasing goods and services encompass constructing showrooms, presenting at trade centers, participating in sports, cultural, and artistic events, organizing conferences and seminars, and leveraging the Internet for product introductions.

Fairs and trade shows are organized promotional events held at specific times and locations, where businesses showcase their products and services These events aim to promote offerings and create opportunities for establishing contracts and partnerships in the marketplace.

Trade Promotion in E-commerce

Trade promotion in e-commerce utilizes electronic platforms to effectively showcase products and services to consumers, encouraging them to make informed choices By leveraging tools such as email and websites, businesses can promote their offerings while enhancing their reputation and brand image, targeting the growing number of internet users.

Trade promotion in E-commerce is actually the way businesses use the Internet features to deliver the product or service to market.

The rule of trade promotion in E-commerce as well as promotion in the traditional business environment is the order: Product - Price - Promotion – Place.

E-commerce promotion struggles due to inadequate technology infrastructure in target markets, including limited internet access, low user numbers, and slow network speeds When infrastructure is lacking, consumers have fewer opportunities to access the internet, search for information, or engage in online shopping and auctions As a result, trade promotion efforts in e-commerce are unlikely to significantly impact consumers in these markets.

The difference of E-commerce applications in agricultural trade promotion

Trade promotion for agricultural products is crucial for enhancing Vietnam's export potential Recently, the government has implemented policies to bolster support for trade promotion activities both domestically and internationally These initiatives not only facilitate access to new and promising markets for Vietnamese agricultural products but also empower local regions to effectively compete and establish a stronger presence in the domestic market.

Many agricultural products possess high quality but suffer from low added value compared to industrial goods Most of these products are linked to small and medium enterprises, which are often localized and dependent on the interests of larger agricultural producers Consequently, effective trade promotion activities are essential not only for discovering new markets for agricultural products but also for enhancing social security and fostering rural development.

Despite recognizing the importance of trade promotion for agricultural products, many agricultural businesses hesitate to engage due to high funding requirements and a lack of supporting resources This situation calls for innovative and cost-effective methods for agricultural trade promotion, with e-commerce emerging as a viable solution to streamline implementation costs However, the low profit margins on agricultural products deter businesses from fully developing an e-commerce network Therefore, it is essential for government agencies to take the lead in establishing effective channels for promoting and trading agricultural products, creating a platform for producers and trading enterprises to connect and conduct business directly.

BACKGROUND AND REAL SITUATION OF AGRICULTURAL

Overall assessment of domestic market for Agricultural product

Vietnam is an agricultural country with many agricultural export products ranked

In 2010, Vietnam's agricultural exports reached a record high of approximately $19.15 billion, marking a significant increase of 22.6% from 2009 Notably, agricultural products dominated this growth, with exports valued at $9.95 billion, reflecting a 24.22% rise compared to the previous year This year proved to be particularly successful for Vietnam's agricultural, forestry, and fisheries sectors, with three key items—seafood, wood products, and rice—each surpassing $3 billion in export value, while rubber exceeded $2 billion.

1 billion (coffee and cashew nuts).

Most agricultural products in our country are primarily export-oriented, with only a small fraction allocated for domestic consumption To gain deeper insights into the domestic agricultural market, we will analyze four key export products from Vietnam: rice, pepper, coffee, and cashew nuts.

Table 2.1: Vietnam Rice production and exporting (2005 – 2009)

Output Export Domestic Rate of

(thousand ha) (thousand consumption tons) tons) tons) (%)

(Sources: GSO + Institute of Policy and Strategy for Agriculture and Rural

Table 2.1 indicates that over 70% of total rice production is consumed domestically However, this domestic consumption rate is decreasing as production rises and there is a growing trend towards diversifying food choices beyond rice.

Despite being leading rice-exporting countries, imported rice dominates the high-quality rice market in many regions In the southwest provinces, rice from Cambodia and Thailand constitutes 50% to 80% of the total market volume In the north, local brands like Tam Hai Hau, Du Huong, and Bac Huong were once top contenders, but Thailand's premium rice is increasingly taking over In Ho Chi Minh City, the rice market is more diverse, featuring imports from Thailand, Cambodia, as well as Korea, Japan, Taiwan, and the USA.

Consumers prefer imported rice due to its affordability, pleasant aroma, and superior taste compared to domestically grown varieties in Vietnam While premium Vietnamese rice types like Nang Huong, Cho Dao, Nang Nhang, and Tam Xoan are exceptionally flavorful, their limited cultivation areas and low production volumes fail to satisfy the growing market demand for high-quality rice.

Since the Prime Minister issued decision of development cashew nut industry into

Since 2010, the cashew nut industry has experienced significant growth in yield, raw production, and export turnover Two years ago, it ranked fourth in export turnover, following rice, rubber, and coffee, highlighting its competitive advantages in global markets.

Currently, Vietnam is one of three major exporter of world, but both Vietnam producers and traders are leaving out domestic market The data for that consumption as follows:

Table 2.2: Domestic consumption of cashew nut (1995-2010)

Year Domestic Using (tons) Rate of domestic consumption (%)

(Source: Institute of Agricultural Planning and Design, 2010)

The domestic market for Vietnamese cashew nuts is limited, with production primarily reliant on export markets This situation arises from several key factors that contribute to the current state of the industry.

- The businesses are less attention or leaving out domestic market Their products are monotonous and marketing activity to promote products is poor.

- Most cashew nuts for domestic consumption is the low quality, do not meet export standards.

- Price of cashew nut in supermarkets, high-level stores higher than the export cashew nut and other eatable nuts.

- Products made from cashew nut is widely available only in the Lunar New Year (within 15 to 30 days per year), or in high-class boutiques.

- The instant products from cashew nut are less attractive domestic consumers as well as not create consumer habits, while the price is too high.

In the past five years, Vietnam's pepper industry has experienced significant growth in area, production, and export turnover, establishing the country as the leading global producer and exporter, accounting for over 50% of the world's total export volume According to the latest data from the International Pepper Community (IPC), Vietnam produces approximately 100,000 tons of pepper annually, outpacing India at 50,000 tons, Brazil at 35,000 tons, and Indonesia at 25,000 tons, with Malaysia, China, and Sri Lanka contributing more than 23,000 and 18,000 tons, respectively.

Vietnam is the world's leading exporter of pepper, yet its domestic consumption remains significantly low, accounting for only about 3.5% of total production, or approximately 3,500 tons annually In contrast, countries like India consume around 42,000 tons (82% of their production), while China, Indonesia, Sri Lanka, Brazil, and Malaysia consume much larger quantities, ranging from 4,800 to 26,500 tons This low domestic consumption poses a challenge for the industry, particularly when issues arise in the export market for Vietnamese pepper.

Vietnam's coffee industry has experienced significant growth, with production increasing dramatically over the past 15-20 years Today, coffee ranks as the second most important agricultural export after rice, with coffee beans comprising 99% of the country's coffee exports Despite this success, the industry faces potential risks, particularly due to fluctuations in global market prices.

Vietnam is the second-largest coffee exporter globally, trailing only Brazil, which dominates 30% to 40% of the market Despite this, Vietnam's coffee consumption remains low, averaging just 0.64 kg per person annually With a production capacity ranging from 800,000 to 1 million tons, domestic consumption is under 10%, while members of the International Coffee Organization (ICO) consume 25.16% of their total output The high export rate of 90% creates pressure on the industry, making it vulnerable to overproduction, particularly when export markets face challenges.

The analysis reveals the uncertain trajectory of Vietnam's agriculture sector Despite ranking first and second globally in export volume and value for key agricultural products, stability in both international and domestic markets remains elusive During global market downturns, farmers face immediate pressure from reduced consumption The export value of Vietnamese agricultural products is heavily reliant on international buyers, while the domestic market often favors foreign distributors, leaving local producers struggling to position their products effectively.

According to Mr Nguyen Xuan Minh, Foreign Trade University, Ho Chi Minh City Campus, the most common problems today with the consumption of agricultural products in the domestic market:

- The selling price is often change (good crop – devalue).

- Profit for producers is low.

- Penetrating to the distribution channels is limited.

Individual production methods lead to disadvantages for sellers in price negotiations with buyers Additionally, the varying techniques used by each household for production, harvesting, and preservation result in inconsistent product quality, making bulk purchasing and processing challenging.

Many agricultural producers fail to honor selling contracts, often opting to sell to other buyers when market prices rise This breach of contract erodes buyer confidence and increases consumption risks Additionally, agricultural purchasers and processors show little interest in establishing stable strategies for sustainable supply development Ultimately, both producers and businesses lack awareness of their crucial roles within the collaborative chain involving the state, entrepreneurs, scientists, and farmers.

Mr Le Ba Trinh, Permanent Head of the "Buy Vietnamese Goods" campaign, emphasizes that modern consumers will not accept local products that are overpriced, of poor quality, or unsafe He insists that traders and producers must commit to high product standards and conduct honest promotional activities to gain consumer trust in domestic goods Mr Trinh also highlights that promoting the consumption of agricultural products in the domestic market serves as both an immediate solution to current challenges and a long-term strategy This approach aims to establish a strong presence for Vietnam's branded agricultural products, including pepper, cashew, rice, coffee, rubber, Nam Roi grapefruit, Binh Thuan dragon fruit, Tay Ninh custard, and Hoa Loc mango, in the export market.

Overall assessment of agricultural trade promotion activity of Agritrade

2.2.1 Overview of Trade Promotion Center for Agriculture (Agritrade)

Trade name (Vietnamese): Trung tâm Xúc tiến thương mại nông nghiệp.

English Name: Trade Promotion Center for Agriculture.

Abbreviation: AGRITRADE Địa chỉ: Fair Exhibition, Economic transaction and Commerce Area , No 02 Hoang Quoc Viet - Cau Giay - Hanoi

Website: http:// agritrade.mard.gov.vn

Email: Info-media@agritrade.com.vn

The Vietnam Trade Promotion Center for Agriculture (AGRITRADE), previously known as the Vietnam Agriculture Fair Exhibition Center (VAFEC), operates under the Ministry of Agriculture and Rural Development Its primary role is to serve as the central hub for trade promotion in Vietnam's agricultural sector, overseeing the management and operations of the Vietnam Agricultural Exhibition located at No 2 Hoang Quoc Viet, Cau Giay District, Hanoi.

There are 2 phases of forming a today AGRITRADE:

+ Phase 1: 2003 – 2008: Vietnam Agriculture Fair Exhibition Center (VAFEC) + Phase 2: 2008 – up to date: Vietnam Trade Promotion Center of Agriculture

According to Decision 3253/QD-BNN issued by the Ministry of Agriculture and Rural Development (MARD), Agritrade is structured into six key functional departments: the Administration and Personnel Department, the Planning and Finance Department, the Business Department, the IT and Market Research Department, the Exhibition and Fair Department, and the Events and Media Department.

The employees in each Department will be arranged in order to ensure adequate operating conditions based on the functions and tasks of all departments.

The Board of Directors at Agritrade is composed of a Director and two Deputy Directors The Director oversees the overall operations, strategic planning, and personnel management of the company One Deputy Director is responsible for trade promotion, while the other manages internal affairs and business operations.

IT and Market Research Department

Administra tion and Personal Department

Agritrade employs a total of 42 individuals across six functional departments, with an average employee age of 36, which is notably younger than that of other government agencies Most employees have received their training from national colleges and universities, including three with master's degrees and 25 holding bachelor's degrees, while the remainder possess higher elementary and intermediate qualifications.

2.2.2.1 Planning and implementing trade promotion programs for Vietnam agriculture:

- Planning and implementing annual trade promotion programs.

- Organizing events, seminars, meeting of agricultural trade promotion.

- Organizing synthesis promotion activities: combining commercial and tourism investment

- Organizing business delegations to survey the agricultural market, attend trade fairs, domestic and foreign investment forums.

2.2.2.2 Information, communications, market research and trade promotion policies:

- Database collection, research, analysis, forecasting and providing information of production and agricultural, forestry, fisheries, handicrafts markets.

- Support to policies of Ministry of Agriculture and Rural Development about export promotion, trade development for agricultural, forestry and fisheries, handicrafts…

- Construction, management and development e-commerce website.

- Branding, product promotion, and introducing scientific and technological achievements in agriculture, forestry, irrigation, fisheries

- Compiling, printing and distribution of trade promotion publications.

- Construction and implementation consulting activities in training; transfer of scientific and technological fields related to manufacturing, business and trade promotion.

- Coordinate training and support on technical training, management and trade promotion.

- Consulting, supporting business for market development.

- Design, construction, decorating booths for trade fairs, seminars, conferences and events.

- Restaurant business, office, travels agencies serving the agricultural trade promotion activities.

- Agents, trading, consignment of agricultural commodities and organizing activities in care goods and means of appropriate tasks.

- Implementation of joint ventures, contracting with other organizations and individuals serve domestic and foreign trade promotion activities.

- Organizing entertainment services to serve the agricultural trade promotion.

2.2.3.1 Organizing various local trade fairs annually:

 Lunar New Year Trade Fair

 Fair of Trade village and Viet Nam competitive festival of handicraft and fine arts

 AgroViet – Vietnam International Agriculture Trade Fair

 Vietnam Exhibition on Agriculture Machines and Tools

2.2.3.2 Organizing the MARD’s trade promotion activities in overseas markets (2005-2010):

 Participating Beijing Agriculture trade fair 2005

 Participating ANUGA 2005- the International trade fair of foodstuff, vegetables and fruit, and beverage in Germany.

 Foodex Japan 2006- the International trade fair of foodstuff and beverage.

 Participating EURO FLORA 2006- the international trade fair of flower and decorative plan and surveying the Italy’s market.

 Participating the fourth China International Small and Medium Enterprise Fair 2007 in Guang Zhou- China.

 Participating SIAL 2006, 2008 and 2010 in Paris- France.

 Participating SIAL China 2009 in Shanghai and Supplyside West 2009 in

2.2.3.3 Coordinating with domestic and foreign organization to organize the professional events:

 Viet Nam Trade fair of technology in processing, packing and maintaining agricultural products- AP/PS

 Safe vegetable and high quality agricultural products market – day.

 Vietnam Best food – Foodstuffs with high technology and standard fitting trade fair.

 Organizing tens of Professional seminars and advices for farmers.

 Organizing “Agriculture golden cup” to respect typical agricultural products and materials.

 Organizing national conference of training for human resource in agriculture and forest products processing

2.2.4 Overview of agricultural trade promotion activities of Agritrade

To promote agricultural products and local specialties, Agritrade deploys two main activities:

- Organizing trade promotion program that includes trade fairs, events, conferences, seminars, training, market surveys…

- Establishing display area to display, introduce and sale agricultural products, local specialties and others agricultural materials to Hanoi market and neighboring provinces.

Annual trade promotion programs aim to provide Vietnamese enterprises with opportunities to showcase their products and brands to global importers Agritrade facilitates a platform for both Vietnamese and foreign companies to present and exchange innovative technologies and machinery related to agriculture, livestock breeding, and the processing and preservation of agricultural, forestry, and aquatic products Through these initiatives, Agritrade assists Vietnamese agricultural producers and sellers in accessing both domestic and international markets.

The display area developed in 2006 under Document No 554/BNN- KH on09/3/2006 signed by Mr Diep Kinh Tan, the Deputy Minister of MARD with the trade promotion purpose as follows:

- Product displaying: Through this area, many agricultural products gradually built the value trademark and stable market such as Gao Tam Dien Bien, Seng Cu Rice,

Da Dui Rice, mushrooms Son La

- As one of the stable and long term trade promotion activities.

- Attracting consumers to visit and purchase goods at the exhibition area.

- This area will help producers expand the market for their products.

- Performing the tasks of MARD, contributed to the growing of Agritrade.

The Agritrade Board of Directors has established three key initiatives to enhance local agricultural markets: first, to assist local suppliers, including farmers and manufacturers, in promoting their products and connecting with customers in Hanoi and nearby provinces; second, to offer consumers a reliable platform for consulting on the quality and pricing of agricultural goods and local specialties; and third, to facilitate connections between producers and consumers, fostering a fair trading environment However, in recent years, Agritrade has faced challenges due to insufficient IT and commercial human resources, limiting its operations primarily to the display and sale of agricultural products.

Agritrade serves as a vital intermediary between suppliers and consumers, focusing on the Hanoi market while also reaching out to suppliers in other provinces Consequently, Agritrade's primary clientele includes both suppliers and consumers.

Based on the frequency of access to customers, I divide customer of Agritrade into two kinds: regular customers and seasonal customers.

Frequent visitors to the Agritrade display area include housewives, househusbands, and local residents, all of whom actively purchase agricultural products and food These buyers play a crucial role in supporting the local market and ensuring the success of Agritrade’s offerings.

The supplier network encompasses local enterprises, producers, and farmers from various provinces who showcase their products in designated display areas Additionally, regular suppliers include numerous traders who actively participate in the annual trade fairs organized by Agritrade.

Because of lack promotion campaign, marketing activities, and incentive policies; the location is unfavorable, thus the number of regular customer remains very low

Agritrade's trade fairs attract a diverse range of visitors, primarily new customers from nearby areas, including both buyers and suppliers However, many of these seasonal customers struggle to make regular visits to the exhibition space for product purchases To better support these irregular participants, Agritrade should implement innovative strategies tailored to the unique operational needs of agricultural businesses today.

Agritrade organizes trade promotion programs through two key departments: the Exhibition and Fair Department, which plans and executes trade fairs and agricultural exhibitions, and the Events and Media Department, responsible for coordinating events such as training sessions and seminars throughout the year These programs primarily target farmers, producers, and traders nationwide.

Agritrade's Director has designated the Business department to manage the display area, which currently prioritizes the sale of agricultural products through a "fixed-income" project In this arrangement, the area manager enters into a contract with Agritrade, committing to pay a predetermined annual income The primary goals of this initiative include ensuring consistent revenue and promoting agricultural product sales.

- To exploit the product resources of businesses and manufacturers especially sources of the local specialties products to increase number of exhibit categories

- Focus on sales and marketing for key products such as “Gao tam Dien Bien”,Quang Hai Fish Sauce, Thai Nguyen tea (of Tan Cuong Hoang Binh Group,

JSC), Seng Cu rice (Lao Cai), Da Dui rice (Ha Giang), Cuong Ngan Fish sauce, Sa Pa Tea, Hoa Binh Shan Tea, Nha Trang fish sauce.

Assessing the impact of external environmental factors to E-commerce

According to the International Monetary Fund (IMF), the world economy will go into the recovery phase after the crisis According to announced on 02/09/2010 of

Mr Pascal Lamy, General Director of the WTO, recently announced that the world has successfully navigated through the crisis, with statistics from 70 countries—accounting for 90% of global trade—showing a remarkable 25% increase in the second quarter of 2010 Notably, Asia leads this growth with an impressive 37.5%, highlighting a significant upward trend in global trade.

In 2010, Vietnam's economy demonstrated a robust recovery from the global economic crisis, as highlighted in the 8th Session of the Eight National Assembly The GDP growth rates showed consistent improvement throughout the year, with the first quarter at 5.83%, the second at 6.4%, the third at 7.14%, and peaking in the fourth quarter at approximately 7.41% According to the General Statistics Office of Vietnam (GSO), the total GDP for the entire year reflected this positive trend.

1980 trillion dong, or about 104.6 billion USD, more than about 13 billion USD in

2009 Compared with 2009, GDP growth in Vietnam this year reached 6.78%, higher than 0.3% against the plan approved by Congress early this year.

Despite the slow global economic recovery and various challenges, Vietnam's economy has demonstrated impressive growth, achieving an average GDP growth rate of 7% per year from 2006 to 2010 Additionally, the estimated national income per capita reached $1,160 in 2010.

Figure 2.1: GDP quarterly growth from 2008 – 2010

(Source: Government report on the economic and social situation in 2010 and development plan in 2011)

Based on the Report, “Securing the Present, Shaping the Future” of World Bank, the estimated GDP of Vietnam in 2011 and 2012 are 6.3% and 6.7%.

Table 2.3: East Asia and the pacific: GDP growth projections

(Sources: World Bank data and staff estimates)

In 2010, inflation posed significant challenges to development, with the consumer price index (CPI) remaining stable at low levels until September Initially, the CPI was elevated during the first two months due to the New Year celebrations However, starting in September, inflation became a pressing issue as the CPI increased, reaching a rise of 9.58% by November Consequently, the National Assembly's goal of maintaining inflation below 8% proved unattainable.

Figure 2.2: Monthly CPI development in 2010

(Source: Government report on the economic and social situation in 2010 and development plan in 2011)

Inflation and rising prices in 2010 were driven by several factors, including increased demand for goods and services due to economic recovery and natural disasters affecting food and construction materials Additionally, the global economic recovery led to higher import prices and production costs for many enterprises The depreciation of the local currency further exacerbated import costs, contributing to price increases Persistent issues such as a lack of financial discipline in public investments and the operations of state-owned enterprises also fueled inflation Moreover, easing credit for state enterprises without proper evaluation and monitoring contributed to inflationary pressures The rise in the base rate set by state banks and increased lending rates by commercial banks towards the end of 2010 are expected to continue influencing inflation into 2011.

Despite efforts to reduce the budget deficit, the cultural and social sectors continue to thrive, leading to an improvement in people's lives The average monthly income per capita has risen to 1.365 million VND, reflecting an 8.9% increase when adjusted for inflation.

Government continued implements salary reform roadmap and increases minimum wage from May 1, 2010 and some related policy.

To combat economic decline, the Vietnamese government has introduced substantial stimulus packages totaling approximately 145 trillion VND, equivalent to about 9% of GDP This includes 17 trillion VND for interest rate support, 28 trillion VND for tax reductions, over 90 trillion VND for increased public investment, and nearly 10 trillion VND for social security enhancements Compared to global standards, Vietnam's economic stimulus is significant, channeling funds into businesses and households to encourage spending and investment While the results have been mixed, many companies on the brink of bankruptcy have accessed low-interest funds, enabling them to recover, rehire workers, create new jobs, and ultimately improve income levels for the population.

The recent economic stimulus packages are likely to lead to inflation, particularly if the capital is not allocated effectively and efficiently In June, the national Consumer Price Index (CPI) rose by 0.55%, surpassing the 0.44% increase in May and the 0.33% rise in March.

According to GSO data, the average Consumer Price Index (CPI) for the first half of 2009 rose by 10.27% compared to the same period in 2008 Despite a modest increase of 0.55%, the CPI continued to rise throughout the second quarter of 2010 This ongoing inflation has had a significant and direct impact on the lives of workers, particularly those with low incomes.

In Hanoi, according to the report of Hanoi Committee of the Party, GDP growth in

2010 to 11%, more than 1.5 times compared to 6.7% in 2009, approximately figure 10.9% in 2008 and 11.2% in 2007 1

The economic structure is in the right direction, in which services makes up 52.5%, industry and construction 41.4%, agriculture 6.1% In 2010, average income per

In 2010, Hanoi's economic and social situation showed significant improvement, with the capita rising to between 36.5 and 37.5 million, up from 32 million in 2009 The city successfully created jobs for 135,800 individuals, surpassing its target by 0.6% and contributing to a notable decrease in unemployment rates The urban unemployment rate fell to 2.59%, a reduction of 1.81% since January 2009, while rural areas experienced a decrease to 1.18%, down 1.32%.

2.3.2 Impact of political legal environment

Vietnam's political environment is characterized by high stability, which supports a continuously improving legal system tailored to societal and business needs Over the past five years, the government has introduced a range of laws, decrees, and circulars aimed at establishing a robust legal framework that fosters the growth of E-commerce in the country.

The Electronic Transaction Law, enacted by the Eleventh National Assembly on November 29, 2005, and effective from March 1, 2006, establishes the fundamental legal framework for electronic transactions in Vietnam, alongside the Commercial Law 2005 and Business Law 2005.

The Master Plan on E-commerce Development 2006-2010, approved by the Prime Minister in Decision 222/2005/QD-TTg, marked Vietnam's inaugural long-term strategy for E-commerce This comprehensive plan outlines the vision, roadmap, and key solutions aimed at enhancing E-commerce adoption nationwide over a five-year period.

Since the implementation of the 2006-2010 Master Plan on E-commerce, Vietnam has strengthened its policy framework through various national programs and projects These initiatives encompass planning for Internet and telecommunications infrastructure, development of IT human resources, and the integration of IT applications within state agencies Aiming to establish an information society underpinned by advanced technological infrastructure, these policies have significantly contributed to the growth of e-commerce in Vietnam.

The list of basic legal framework for electronic transactions in Vietnam is displayed in Appendix 4.

2.3.3 Impact of socio-cultural environment

E-commerce has become essential for businesses globally, including in Vietnam, as entrepreneurs increasingly recognize its significant impact on operations and customer interactions.

Assessing the impact of internal environmental factors to the E-Commerce

Agritrade currently employs a total of 45 individuals, including 4 master's degree holders, 34 bachelor's degree holders across various fields, 3 college graduates, and 4 unskilled workers Specific trade promotion responsibilities will be allocated to the relevant functional departments accordingly.

The Board of Directors at Agritrade has designated specific responsibilities to two key departments: the Exhibition and Events Department and the Media Department The Exhibition and Fair Department comprises eight qualified professionals, including a manager, two deputy managers, and five employees, all of whom possess at least three years of experience in organizing both domestic and international exhibitions Their extensive experience has enabled them to build a robust customer database and foster strong relationships, making them well-equipped to implement E-commerce applications for promoting agricultural products Meanwhile, the Events and Media Department consists of five members, including a manager, a deputy manager, and three employees, all holding advanced degrees in management, journalism, or economics This department focuses on planning and executing training programs, conferences, and professional seminars to equip farmers, producers, and manufacturers with essential skills and knowledge to enhance product quality, boost competitiveness, expand production, and seek investment opportunities.

The product promotion activities in the display area will be managed by the Business Department, which consists of 11 members, including a Manager, a Deputy Manager, and 9 employees handling various tasks Currently, the display area is primarily focused on sales, leading the department to allocate only two personnel to oversee this section.

The manager oversees the area by managing resources, optimizing product output, and handling financial statements, while the seller is tasked with managing inventory, receiving goods, and facilitating direct sales at the exhibition area Additionally, the seller prepares monthly reports detailing product input and output.

To implement E-commerce applications in Agritrade, the main performer is IT and Market Research Department Currently, there are 5 employees in this department:

The team consists of a Manager, a Deputy Manager specializing in IT, and three employees with relevant training and expertise This includes one Master of Information Technology, two Bachelor's degrees in IT, and two Bachelor's degrees in economics and management To effectively implement E-commerce applications, the IT and Market Research Departments must collaborate closely with other functional departments, such as the Exhibition and Fair Department, Events and Media Department, and Business Department, to gather data, enhance promotion, and improve the overall effectiveness of the E-commerce initiatives.

Currently, the IT and Market Research Department lacks sufficient staff to effectively develop and manage the technical infrastructure for the E-commerce application To enhance operational efficiency, Agritrade should consider recruiting additional skilled employees.

The Ministry of Agriculture and Rural Development (MARD) recognizes the crucial role of E-commerce in promoting agricultural products in Vietnam, making it a key focus for Agritrade Last year, MARD implemented supportive policies to foster the growth and application of E-commerce in trade promotion The Agritrade Board of Directors is dedicated to advancing this model, ensuring optimal conditions for the development of E-commerce applications Consequently, the Director of Agritrade has pledged to provide comprehensive financial resources to support the project's implementation.

Agritrade has fully equipped all departments and employees with advanced computer systems, ensuring that they are regularly upgraded and maintained by specialized personnel The company also boasts a robust LAN and comprehensive Wi-Fi coverage throughout the building, supported by high-speed internet services from VNPT and Viettel.

The IT and Market Research Department at Agritrade oversees the management and utilization of computer and network systems Currently, this department consists of only two highly trained officers with strong IT expertise These professionals bring valuable experience in various technology fields to their roles.

- Programming Languages: Java, JSP, Servlet, Struts, JSF, C #, VB.NET, ASP.NET, ASP, C / C + +, Visual Basic, JavaScript, PL / SQL, Oracle, XML, Python.

- Operating system: Microsoft Windows NT/2K/2003/2008, Linux, UNIX.

- Databases: Oracle, SQL Server, DB2, MySQL, Postgre SQL.

- Network protocols: SNMP, TCP / IP, NAT, IP Sec, VPN.

These are favorable conditions for the deployment of the system and website designed for the online sale model of Agritrade.

Analysis the results of survey and discussions

To evaluate the effectiveness of E-commerce applications in trade promotion activities at Agritrade, a survey was conducted among the company's employees and customers The focus was on assessing the current IT infrastructure of Agritrade employees and its capability to support E-commerce initiatives Additionally, the survey examined existing trade promotion activities and their impact on the growth of Vietnam's agriculture sector For customers, both consumers and providers were surveyed to understand their agricultural purchasing methods and to assess the necessity of E-commerce in enhancing trade promotions The findings of the survey provide valuable insights into these areas.

Subjects Issue Notes (IN) Receive Note (RN) Rate RN/IN

The questionnaire includes two parts: part 1 (IT infrastructure and IT application capacity) and part 2 (IT application to agricultural trade promotion at Agritrade).

Table 2.6: Summary of survey results (Part 1):

Personal computer equipped at work

Internet connection of these computers

LAN network of Agritrade equipped with firewall

Rate of using email at work

The main tasks of Agritrade’s website

Rate of website/portal updating

IT support to employees during work

The attention of the leadership to IT application

Do not care or care very little 0 0

At Agritrade, all functional employees in the Finance Department are provided with computers; however, for network security reasons, these devices are not connected to the Internet The data indicates that Agritrade effectively utilizes IT across various operational levels, with a notable 77.78% of employees actively using email for work, highlighting the company's commitment to integrating technology into its processes.

Despite the uneven IT proficiency among Agritrade employees, with many lacking basic training, the overall level of IT usage at Agritrade surpasses that of several other state agencies This impressive performance can be attributed to various factors.

The average age of Agritrade's employees is 65, with many born after 1975, enabling them to quickly adapt to IT applications Employees are tasked with finding new customers and maintaining communication with distant clients Additionally, the IT and Market Research Department provides timely technical support and training requested by Agritrade's staff to enhance their skills.

A recent survey highlights the strong commitment of Agritrade's leadership to IT applications, with 23 out of 45 employees acknowledging the Board of Directors' keen interest in technology integration The Director has mandated that the IT and Market Research Departments provide ongoing support and training for employees to enhance IT utilization in their work This focus on technology readiness, including factors like computer access, internet usability, and security, indicates that Agritrade is well-positioned to initiate e-commerce applications However, to fully realize its e-commerce potential, Agritrade must invest in upgrading its computer systems, improving internet services, and establishing a robust server infrastructure for its e-commerce portal.

Table 2.7: Summary of survey results (Part 2):

Current agricultural trade promotion activities at Agritrade

Trade fairs and professional events 45 100.00

Ability to achieve the target set for trade promotion activities?

Should Agritrade applied E-commerce in agricultural trade promotion

If applying IT and E-commerce, what model Agritrade should apply?

The important factors when applying E-commerce?

Marketing to introduce new forms 30 66.67

Marketing to introduce new forms 8 17.78

According to Table 2.8, all Agritrade employees are aware of the key activities and functions essential for trade promotion However, they also acknowledge that the likelihood of successfully achieving trade promotion goals through traditional methods is relatively low, with 35 employees (77.78%) expressing concerns about the effectiveness of these approaches.

Figure 2.12: Ability to achieve the target set for trade promotion activities of traditional methods.

Accordingly, 75.56% of Agritrade’s employees also propose to deploy e-commerce applications in the trade promotion of agricultural products.

Figure 2.13: Evaluation of Agritrade’s employees on whether to apply E- commerce in agricultural trade promotion.

A recent survey revealed that 60% of Agritrade employees believe the company should establish a dedicated E-commerce website They suggest that the current site should prioritize agricultural information and trade promotion, while a new platform should offer a more professional and interactive experience To successfully implement E-commerce, employees identified four critical areas of focus: personnel preparation, marketing plan development, website design, and technical infrastructure upgrades Notably, personnel preparation was deemed the most crucial, with 42.22% of respondents in agreement, followed by technical infrastructure upgrades at over 28.89%.

Figure 2.14: The E-commerce model to apply Figure 2.15: The most important factor when apply E-commerce

Table 2.8: Evaluation of Agritrade’s employees about necessary level of contents of E-commerce application

The necessary level of organizing training course 45 3 5 197 4.38 for users

When implementing an E-commerce model, it's crucial to focus on four key elements: electronic payment, online support, network security, and user training A survey of Agritrade’s employees highlighted the significance of these components in E-commerce applications, with online support receiving an average score of 4.58, network security at 4.56, and user training at 4.38.

To enhance its E-commerce model, Agritrade should prioritize the improvement of its online support system, followed by upgrading security measures to safeguard user information Subsequently, implementing training courses for users, particularly in local provinces, is essential, and finally, Agritrade should focus on completing the online payment system This step-by-step approach will ensure a coherent and effective deployment of their E-commerce strategy.

The questionnaire is structured into two sections: the first targets private consumers purchasing agricultural products for personal use, while the second focuses on agricultural suppliers from Hanoi and other provinces who engage in trade fairs organized by Agritrade.

Table 2.9: Summary of survey results (Consumers)

Current method of buying agricultural products

The form of selling agricultural product via internet that consumer can be use?

Payment method that customer use in E-commerce.

Understanding of customers about Agritrade’s tasks?

Should Agritrade apply IT in trade promotion activities?

Changing buying habits is crucial for individual consumers of agricultural products, as revealed by a survey sampling housewives, office workers, and students The findings indicate that 100% of respondents still purchase these products through traditional methods, visiting markets and supermarkets directly However, 40% of consumers, primarily office workers, have begun buying agricultural products online The survey highlights a demand for innovative selling models, with 86.67% of customers favoring E-commerce websites and 80.00% supporting company websites as viable options Despite this shift, 53.33% of customers continue to prefer cash payments.

Survey results indicate a strong awareness among consumers regarding Agritrade's marketing activities for trade promotion programs A significant majority of consumers, 80%, support the integration of IT and E-commerce to enhance access to agricultural products and information, emphasizing the need for more convenient solutions in the agricultural sector.

Figure 2.16: Evaluation of Agritrade’s consumers on whether to apply E- commerce in agricultural trade promotion.

About suppliers who also selling products on E-commerce website of Agritrade, survey results showed the positive signal for deployment E-commerce model in Agritrade in the near future.

Table 2.10: Summary of survey results (Suppliers)

Current cooperation between suppliers and Agritrade

Participating trade fair organized by

Consigning their products at the display

Hiring permanent space at Agritrade to

The willing of suppliers to provide agricultural product information

The factors should be focused on If Agritrade applies E-commerce model.

Marketing to introduce new forms 5 38.46

To upgrade the technical infrastructure 11 84.62

Many suppliers are seasonal participants in Agritrade's trade fairs, which significantly boost the visibility and sales of agricultural products However, the brief duration of these events makes it challenging for suppliers to sustain customer relationships and market presence afterward While some companies have opted to consign their products in Agritrade's display area, this has resulted in limited sales despite the promotional benefits Additionally, interest in renting space for promoting agricultural products and local specialties at Agritrade remains low, with an average satisfaction rating of only 3.54.

Figure 2.17: Evaluation willing level of Agritrade’s consumers to participate in E-commerce website.

The supplier expressed enthusiasm for Agritrade's E-commerce application, eager to share product information and actively participate in the website This commitment is evidenced by an impressive 84.62% of companies willing to contribute their information.

According to evaluation results in Table 2.12, the average point of necessary level of E-commerce application in Agritrade that evaluated by suppliers is 4.31 points

According to survey results, suppliers believe that Agritrade should focus on five key elements when implementing an e-commerce model: preparing personnel, launching marketing campaigns for new formats, enhancing payment methods, upgrading technical infrastructure, and improving the delivery process.

Table 2.11: Evaluation of Agritrade’s customers (consumers and suppliers) about necessary level of E-commerce application

The satisfaction level of consumer when purchase 15 2 5 56 3.73 agricultural products online

The effectiveness of current cooperation methods between

Agritrade and suppliers in promoting agricultural product?

CONCLUSIONS AND THE PROPOSAL SOLUTION OF E-COMMERCE

The conclusions and findings through the research process

3.1.1 The achievements and limitations of Agritrade

Since its establishment in 2003, Agritrade has effectively promoted trade and conducted training for businesses and local communities The organization has also engaged in advertising campaigns to showcase agricultural products and local specialties As a result, these initiatives have enabled local agricultural products to reach markets and consumers in major urban areas.

From 2003 to 2010, Agritrade successfully organized numerous agricultural trade fairs, establishing annual events like the Tet Trade Fair, plant and animal breeding fair, Vietnam handicraft trade fair, and the International Agricultural Trade Fair - Agroviet, to enhance market access for enterprises Additionally, Agritrade has proven expertise in overseas trade promotion, managing annual programs funded by the Ministry of Agriculture and Rural Development (MARD) and the government Notable participation in international events included SIAL Paris in 2006, 2008, and 2010, as well as the Anuga food and drinks trade fair in Germany, and trade fairs in Japan and China.

For training activities, Agritrade is also conducted many training classes in order to improve the skills of the trade promotion in some provinces: Tuyen Quang, Nghe

The "Farmers Bridge" program aims to enhance sustainable agriculture by connecting four key sectors: farmers, enterprises, scientists, and the government This initiative focuses on promoting Tuyen Quang Ham Yen Oranges, with branding efforts extending across regions such as Hanoi, Hai Duong, Hung Yen, and Nam Dinh.

Since its inception in 2007, the display area has proven essential for promoting local agricultural products, helping to establish trademarks and secure stable consumer markets despite its small scale In 2008, Agritrade expanded this initiative by collaborating with Bac Giang province to create a permanent exhibition space showcasing the region's agricultural specialties for sale in the Hanoi market In 2009, Agritrade further developed a small supermarket dedicated to agricultural products However, due to economic challenges and a lack of innovation in operations, marketing, and sales, this supermarket was closed in early 2010.

Currently, personnel of Agritrade lack of IT and business staffs who can operate E- commerce website and relevant activities.

Trade promotion events, including fairs, exhibitions, and seminars, are witnessing a gradual increase in the number of exhibitors; however, many still fail to understand the significance of these programs Furthermore, Agritrade has not effectively maintained relationships with suppliers, hindering their ability to encourage greater investment of time and resources in trade promotion activities.

The traditional display method limits the expansion and effectiveness of display areas, which are often small and poorly located for daily visitors and customers from neighboring provinces As a result, these areas fail to effectively promote regional agricultural products and enhance market access.

3.1.1.3 Causes the achievements and limitations of Agritrade

* The cause of the achievements

As a business unit under the Ministry of Agriculture and Rural Development (MARD), Agritrade is responsible for executing annual trade promotion activities for the agricultural sector Additionally, Agritrade benefits from MARD's policies and financial support to effectively organize these events.

Agritrade has established a clear and logical development strategy that effectively addresses the needs of businesses in promoting products and accessing markets through organized agricultural trade fairs These events not only facilitate sales and expand customer networks but also enhance local trade promotion skills through targeted training programs Additionally, the display areas and selling processes have contributed to the recognition and market acceptance of various local specialties.

+ Staffs of Agritrade have good knowledge base and often participate in domestic and abroad professional training to improve their skill of deployment and handle job.

+ Exploit effectively the existing advantage of the Agritrade such as location, infrastructure

* The cause of the limitations of Agritrade

Agricultural businesses, typically small and medium enterprises with limited capital, often lack awareness of the importance of trade promotion activities As a result, they are generally reluctant to engage in events organized by Agritrade.

Agritrade, a prominent trade fair organizer with years of experience in trade promotion, is now venturing into the display of agricultural products, an area where they have limited experience.

+ The capital for investment is limited so Agritrade can not invest more on display area.

+ Not fully exploit the advantages of technology infrastructure for business development.

Agritrade's salaries and allowances for IT personnel are comparatively lower than those offered by other companies, making it challenging to attract and retain skilled IT professionals, particularly in the area of online sales.

3.1.2 The findings of the research process

Through the survey and interviews with Agritrade’s employees and customers, I discovered the following issues:

Many consumers trust the product information provided by Agritrade, but they seek innovative purchasing methods for agricultural products Local agricultural suppliers also believe that Agritrade will enhance their support and assist them in reaching more consumers in Hanoi and other provincial markets.

Agritrade's current trade promotion activities effectively boost agricultural businesses by connecting suppliers with consumers and potential partners These events allow consumers to purchase quality agricultural products and access information about reputable providers However, the short duration of these events, typically lasting only 4 to 5 days, limits their long-term impact on businesses.

Agritrade recognizes the importance of integrating IT into its operations to meet the development goals of its display area and trade promotion programs Embracing E-commerce alongside traditional methods is essential, given the global and Vietnamese trends in E-commerce applications Implementing this model will not only enhance Agritrade's promotional strategies but also establish a consistent and innovative trade promotion approach for both consumers and suppliers.

Orientation and perspective of development of Agritrade in the future

To align with the deep and comprehensive reform of trade promotion in the agricultural sector during the international economic integration period, Agritrade is enhancing IT applications to support enterprises, cooperatives, farms, and farmers through electronic media, publications, and e-commerce Additionally, Agritrade promotes the image of Vietnam's agriculture, its enterprises, and key export products.

Agritrade will be the leading trade promotion organizer and active supporters for Vietnam Agricultural manufacturers and exporters.

Agritrade applies E-commerce in all activities in order to serve customers, who are companies, production units and consumers better and more effective.

Agritrade is set to launch an E-commerce portal designed to offer comprehensive information on the schedule of annual trade fairs, exhibitions, training sessions, and cultural activities This platform will also facilitate customers in finding the information they need and ordering services, while allowing direct feedback to Agritrade.

E-commerce portals serve a crucial role beyond providing agricultural information; they create a trading platform for manufacturers and agricultural enterprises to connect with other businesses and consumers Through these portals, local agricultural products and specialties can establish a stable market presence in Hanoi and other provinces.

Agritrade is building a comprehensive database focused on agricultural production, products, and services to enhance trade promotion initiatives This database enables organizations, businesses, and individuals to access vital information, allowing them to develop effective strategies, action plans, and business models Additionally, Agritrade has successfully established an online trade promotion system for agricultural products, local specialties, handicrafts, and fine arts, facilitating direct engagement with customers through its website.

3.2.2 Agritrade’s views on the E-commerce application

The Board of Directors of Agritrade emphasizes the importance of integrating E-commerce into trade promotion activities, highlighting its alignment with existing infrastructure and technology By adopting an E-commerce model for agricultural products, a consistent trading platform can be established, facilitating direct interactions between suppliers and consumers This approach not only enhances market access for agricultural goods and local specialties but also ensures a stable demand in major cities like Hanoi.

Proposal solutions of deploying E-commerce application in Agritrade

3.3.1 Group of Human Resource solutions

The IT and Market Research Department is primarily responsible for implementing E-commerce at Agritrade However, the current staff levels and expertise are insufficient To effectively prepare personnel for the deployment of the E-commerce model, Agritrade must promptly enhance its workforce by following essential steps.

- To evaluate the requirements of personnel, construct new job descriptions and appropriate treatment policy for E-commerce application.

- To evaluate the ability of adaption to the new situation of current staffs.

- To develop plans for recruiting and training additional personnel (including the self-training and training using outside services) to meet the requirements.

The Improving quality and quantity of human resources for the deployment of E- commerce model should be ensuring the following basic requirements:

- Having knowledge and experience in selling agricultural products, foodstuff and organizing trade promotion program.

- Having knowledge and experience in E-commerce and online sales.

- Having the knowledge and skills in sales and marketing…

3.3.2 Solutions related to infrastructure and technology

3.3.2.1 Solutions of Infrastructure and information systems

Agritrade's current database and server infrastructure primarily supports the company's website, which only features updates, event photos, and brief clips With the introduction of an E-commerce platform, additional functionalities will be required, necessitating a thorough evaluation of the existing infrastructure's capacity to handle these demands To ensure a successful transition, Agritrade must anticipate future demand and allocate additional investment towards enhancing its IT systems.

Agritrade must adapt and redesign its current information system to align with new business processes, alongside investing in infrastructure Additionally, the company is developing external E-commerce information systems to support online sales and ensure compatibility with its internal E-commerce systems.

3.3.2.2 Solutions of designing a website for sales

Agritrade's website currently serves as a platform for publishing news, product details, agricultural information, schedules, and updates on trade promotion programs To effectively implement an E-commerce model, Agritrade needs to create a dedicated website that includes essential functionalities tailored for online transactions and user engagement.

- Introducing general information about trade promotion activities of Agritrade and other necessary documents.

- Virtual store of users (sellers)

- Managing customer’s account and information.

- Managing order forms (including the process from ordering to delivery, tracking warranty).

- Consulting and contract negotiations online (provided by customers through their account system).

The page interface should be designed for ease of use, ensuring consistency for users and streamlining the steps required to perform functions efficiently The IT team at Agritrade must identify essential installation functions for each specific product.

Agritrade will create a comprehensive design project, carefully select and construct the website's database, and install essential software functionalities These initiatives aim to guarantee smooth website operation, fast access speeds, and enhanced user safety.

3.3.2.3 Solutions for safety and security

To enhance its E-commerce model, Agritrade must prioritize network security and data protection, particularly concerning electronic payments By establishing robust security measures and leveraging advanced technology, Agritrade can safeguard consumer account information and ensure a secure online shopping experience.

Agritrade should assist customers in safeguarding their private accounts and sensitive information, thereby minimizing transaction risks With Agritrade's support, customers can feel confident in the security of the trading system offered Implementing advanced technologies can further enhance these protective measures.

Utilizing virtual keyboard technology enhances security by enabling customers to enter sensitive information, such as account details and passwords, directly on the website This innovative feature protects users from potential keylogging threats, ensuring a safer online experience.

Utilizing digital matrix technology enhances user authentication during payments and other actions Each secure transaction necessitates that customers input a randomly generated number from a previously provided matrix, ensuring robust security measures are in place.

- Use of electronic signature technology for transactions, for the entering, showing and querying the electronic receipts.

To enhance website security, Agritrade utilizes a firewall that acts as a protective barrier between its online resources and external threats This technology can be implemented as software on the internet server or as an independent filtering system that safeguards the internal network For small eCommerce websites, a software firewall is sufficient, while larger projects benefit from an independent filtering system A firewall comprises two main components: ports, which facilitate data flow between networks, and valves, which prevent data packets from being misrouted For optimal protection, Agritrade can deploy two firewalls from different providers simultaneously, ensuring comprehensive coverage and mitigating the limitations of each individual firewall.

Utilize the Tunnel, which features secure access channels tailored for partners This tool employs encrypted Internet protocol packets and establishes a virtual private network (MRA) to enhance business communication.

Maintaining a high level of security is crucial for 84, and MRA technology effectively prevents unauthorized access by hackers while facilitating connections among users Beyond its security features, this technology provides an affordable communication solution for staff, enabling them to connect regardless of distance The primary expense associated with establishing a tunnel is the initial setup cost, which is followed by minimal ongoing operational expenses.

3.3.3 Solutions related to business processes

3.3.3.1 Solution and processing to orders

The order and receiving process is crucial in online sales, where buyers place orders for products that are sent to sellers To streamline this process and minimize errors, Agritrade should implement an automated ordering system that includes a comprehensive list of products, terms, and policies presented in a clear and user-friendly manner This system will assist customers in making informed ordering decisions and should feature supportive functions at every stage of the ordering process while also maintaining the current order form.

- Complete the processing of orders

Accurate order fulfillment according to customer requirements is essential for building trust and securing additional contracts Therefore, it is crucial to optimize order management processes to reduce costs for both sellers and buyers, while effectively monitoring contract progress and addressing any arising issues to ensure efficient resolution.