Vietnamese firms regardless of their scale need to get up to speed on digital transformation to enable them to further penetrate global markets, a webinar heard on Wednesday.

Delegates at the Digital Transformation and Key Legal Points to Take Advantage of the EVFTA's Opportunities in the Current Context webinar held on 26 August. — VNS Photo

Tran Phu Lu, deputy director of the Investment and Trade Promotion Centre of HCM City, told the seminar titled Digital Transformation and Key Legal Points to Take Advantage of the EVFTA’s Opportunities in the Current Context that trade disputes and the COVID-19 pandemic have affected global investment and trade, and supply chains have been disrupted.

Viet Nam’s trade revenues were down 2.1 per cent year-on-year in the first half of the year to US$238.4 billion, with exports falling 1.1 per cent to $121.2 billion.

Lu quoted World Bank experts as saying that in the long run, the impacts of COVID-19 and trade tensions could lead to a profound restructuring of global value chains, enabling Vietnamese firms to enter them.

Viet Nam is the EU’s 17^th largest trading partner and the second largest in Southeast Asia while the EU is one of the country’s major markets, he said.

“The European Union-Viet Nam Free Trade Agreement (EVFTA), which has taken effect since earlier this month, is expected to open new doors and create growth momentum for Viet Nam’s economy and exporters.

“It is expected to boost digital transformation at Vietnamese companies to enable them to capitalise on opportunities brought by the agreement.”

Viet Nam’s exports to the EU last year accounted for only 1.8 per cent of the bloc’s total imports, and so there is much room left, especially with the EVFTA removing 85.6 per cent of tariff lines, equivalent to more than 70 per cent of the country’s exports to the EU.

To succeed in that market, Vietnamese firms need to focus on obtaining market information, improving the quality of their products and services, building and promoting their brands, professionalising sales, and increasing the adoption of advanced technologies.

Besides, their products must meet safety standards as well as social responsibility and intellectual property requirements.

Dr Nguyen Tuan Hoa of the Green Economic Institute, an arbitrator at the Viet Nam International Arbitration Centre, concurred with Lu, saying that to capitalise on the EVFTA, Vietnamese firms need to meet three main criteria: product origin, quality and digital capability.

“EU businesses are 10-15 years ahead of Vietnamese enterprises in terms of digital capacity, and so we must strive to achieve the similar level as them so that we can do business with them.

“Thus, digital transformation is an inevitable process. If we don't do it, we will be left behind.”

Enterprises should start to get acquainted with e-contracts, pay digital taxes and digitalise all business activities, he said.

Digital transformation is the process of creating a new operating method based on digital technologies like IoT, cloud, big data, AI, and blockchain to create new production and business models, he said.

“Successful digital transformation will bring many benefits to businesses such as reducing costs and enabling them to access any market, not just the EU.”

E-contract

Lawyer Dinh Quang Thuan of the Global Viet Nam Lawyers Co. Ltd said the most popular trading method today is the signing of electronic contracts using e-signature technologies and digital signature certification services. 

Signing of e-contracts would help businesses save time and costs, especially in the current situation, he said.

In reality, the number of Vietnamese firms signing e-contracts remains modest since they are afraid of legal and security risks and increase in costs, he said.

He expected the signing of e-contracts to increase soon as companies realise the importance of investment in digital transformation to enhance their competitive advantages.

To reduce the risks involved in e-contracts, firms should carefully study their business partners, choose prestigious ones, exchange information via email through clearly registered and owned domain names, he said.

They should consult experts and lawyers before signing e-contracts to help ensure safety, he said.

Lu said: “In the context of the prolonged epidemic, the use of digital transformation for market access and penetration is [vital].

“This is the time for businesses to realise the advantages of the digital economy and the urgent need for digital transformation.”

The webinar was organised by the Investment and Trade Promotion Centre of HCM City and the Viet Nam International Arbitration Centre.

Source: VNS