E-commerce finds markets overseas (2)

Chinese e-commerce companies tend to provide an English website targeting US and European customers when they start to go global, said Chen Dong, the China head of large merchant sales at PayPal, the online payment arm of online marketplace Ebay.

However, emerging markets represent a bigger opportunity for e-commerce businesses that expand overseas, as is evident in the huge growth in exports by e-commerce businesses to Latin America, Eastern Europe and the Asia-Pacific region, Chen added.

From July 2011 to June 2012, exports by Chinese e-commerce companies to Argentina increased by 96 percent, to Israel by 72 percent and to Ukraine by 71 percent, according to PayPal figures.

Global strategies

Although China is expected to become the world's biggest online retail market this year, according to officials of the Ministry of Commerce, e-commerce companies' global expansion comes as an important supplement to their business in the home market.

"Vancl is, and will be, focused on its domestic market, but the intention to go global is quite natural, whether it's the brand or the manufacturing that goes outside China," said Luan.

Last year, Vancl moved some of its clothes production to Bangladesh, and it was also approaching manufacturers in Indonesia and Cambodia for possible cooperation, Hu Haishen, who is responsible for Vancl's clothes manufacturing, said in August.

There were 31 million people accessing the Internet in Vietnam by the end of September, representing 34 percent of its population, according to the Nhan Dan newspaper.

China, in contrast, had an Internet population of 538 million by the end of June, representing nearly 40 percent of its population, according to the quasi-official China Internet Network Information Center.

What is different from its Chinese operations, though, is Vancl's pricing in the market.

"Vietnam is like China a number of years ago where rich people buy luxury goods and those with little income go to wholesale markets. There are few fashion brands in between targeting the middle and high-end market," he said, explaining the reason for Vancl's brand positioning in Vietnam.

The company began its expansion in Vietnam with a limited number of products, about 300 kinds of clothes, on a trial basis as it is still learning how to work with a partner in a foreign country, Luan said.