Tightened e-commerce management required
Ministry of Industry and Trade’s Department of E-commerce and Information Technology Director Tran Huu Linh
E-commerce has attracted large numbers of consumers thanks to its convenience. Over the past two years, fraudulent e-commerce business in Vietnam however has had a negative impact, and muaban24.vn (a multi-level marketing system) and nhommua.com.vn (a buying in group service provider) are some of the biggest names accused of fraudulent business activities.
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According to a Department of E-commerce and Information Technology survey, 58 percent of the questioned businesses said their e-commerce revenue had increased, five percent said their e-commerce revenue decreased and 36 percent of them said their e-commerce revenue had remained unchanged. According to the department’s website registration statistics, there were 35 registered e-commerce exchange centers in early 2012, and successful transactions on these exchanges came to 1.5 million totaling almost VND4.2 trillion in value. |
Paying a commission rate of up to 30 percent for each new member recommendation, muaban24.vn succeeded in developing and expanding its network and increasing its number of members. Linh said that the Department of E-commerce and Information Technology worked with the Police Department for High-Tech Crime Prevention (C50) of the Ministry of Public Security to keep an eye on muaban24.vn as soon as the portal appeared in October 2011. The department also worked with the Competition Management Department, the Market Management Department, the Department of Justice and the Department of Domestic Markets of the Ministry of Industry and Trade to carry out investigations into muaban24.vn, he said. C50 investigators encountered difficulties in learning about muaban24.vn operations, as most of its transactions were done with cash and without contracts and invoices. Investigations showed that members of the network were mainly students and people in remote, rural areas who really wanted to earn easy money and were willing to encourage their friends and relatives to join the network. Over a year after muaban24.vn opened, it had branches in more than 30 provinces and cities and its revenue had reached several hundred billion dong when its leaders were arrested.
Customers of nhommua.com.vn had problems when buying goods through the website. The network’s spokespersons explained that some internal problems had occurred so all the invoices paid by customers through nhommua.com.vn were not accepted by retailers.
Linh said that the Department of E-commerce and Information Technology suggested drafting a new decree as a substitute for Government Decree 57/2006/ND-CP to improve the legal framework governing e-commerce. Through the bill, the department suggested banning multi-level marketing and applying measures that require buying-in-group service providers to pay a deposit or buy insurance for their customers. According to the bill, such commodity exchanges will operate online so they can be better managed. The department will draft a decree on dealing with administrative violations related to e-commerce. Offline market management is difficult but online market management is even more difficult; if agreed the bill would be submitted to the Prime Minister for approval in December 2012 and be issued in early 2013, Linh said