GIGA Warehouse: Affordable Prices and Lightning-Fast Delivery
The availability of Chinese goods on popular e-commerce platforms such as Taobao, Shopee, and Lazada has become a common occurrence for Vietnamese consumers. Numerous companies specializing in order reception and shipping from China to Vietnam acknowledge that, aside from offering competitive prices compared to domestic products or other sources, one standout advantage of purchasing Chinese goods through e-commerce is the remarkably swift delivery time.
The proprietor of a store specializing in Chinese goods in Hanoi explained that upon placing an order on the e-commerce platform, the request is promptly forwarded to a warehouse in China for rapid collection and categorization, typically within a mere 24 hours. Subsequently, the goods are swiftly loaded onto trucks and transported to Quang Ninh, followed by Hanoi and various provinces across the country. The entire process, from order placement to receipt of goods from China to Hanoi, averages around 3 days. In contrast, shipping goods from Ho Chi Minh City to Hanoi using conventional customs services typically takes anywhere from 4 to 7 days.
The competitive advantage of Chinese goods, characterized by affordable prices and expedited delivery, can be attributed to the supportive policies of the Chinese government in promoting cross-border e-commerce among businesses. Following the onset of the US-China trade tensions in 2018, exacerbated by the Covid-19 pandemic, China swiftly pivoted its market approach, emphasizing the promotion of e-commerce.
As exports of Chinese goods encountered challenges in regions such as Europe and the United States due to geopolitical tensions, the Chinese government redirected its efforts to support domestic enterprises exporting to Southeast Asia, including Vietnam. Substantial governmental support is provided for every bill of lading exported by Chinese enterprises, covering costs to the extent that Chinese businesses can ship goods to Vietnam essentially free of charge. Moreover, Chinese enterprises have strategically established warehouses near the Vietnam border, enabling them to fulfill orders to Vietnam within a remarkable 8-hour timeframe.
According to research by Saigon Investment, three Chinese border cities—Hà Khẩu (bordering Lao Cai), Bằng Tường (bordering Lang Son), and Đông Hưng (bordering Quang Ninh)—host a network of massive warehouses, predominantly stocking consumer goods, also known as GIGA warehouses. Chinese factories lease these warehouses, employing Vietnamese staff for daily live streaming, and promptly dispatch goods to Vietnam upon order placement.
China's Shift Towards Quality and Innovation
In recent years, China has undergone a significant transformation in its approach to goods production, shifting away from the traditional model of "imitation and processing" towards a focus on quality and innovation. This shift aligns with the goals outlined by the Chinese Government, as highlighted by Chinese Prime Minister Li Qiang during a press conference at the first session of the 14th National People's Congress last year. Prime Minister Li emphasized the government's commitment to promoting high-quality development as a primary objective.
According to Prime Minister Li, China's current development trajectory prioritizes quality over quantity. The focus is no longer solely on whether something can be produced, but rather on producing goods of exceptional quality. This entails a strong emphasis on innovation in technology, the establishment of modern production systems, and the promotion of green development initiatives. As a result, goods manufactured in China are evolving from being merely "plentiful, fast, and cheap" to embodying the qualities of being "plentiful, fast, high-quality, and affordable." This signifies a fundamental shift towards prioritizing quality and sustainability in China's manufacturing sector.
Just three years ago, purchasing domestic goods from China posed significant challenges for Vietnamese consumers due to customs clearance issues and lengthy waiting times. Consequently, Chinese businesses relied on intermediary sellers from Vietnam to collect orders, procure domestic goods in China, and transport them to Vietnam for delivery to buyers. Despite offering diverse designs and affordable prices, the extended waiting times prompted Vietnamese consumers to prioritize purchasing domestic brands for quicker delivery. However, the landscape has since transformed.
Chinese businesses have not only prioritized improving product quality but have also embraced artificial intelligence (AI) in their sales strategies. CNBC reports a recent surge in the use of AI technology for livestreaming sales in China. By integrating AI into livestream sales, businesses can leverage virtual tools across multiple languages to reach customers in diverse markets.
According to a Vietnamese e-commerce expert, the adoption of AI in sales by Chinese businesses poses a risk to Vietnamese intermediary sellers, who may face job losses as Chinese businesses streamline processes, reduce costs, and boost profits. The expert warns that in the near future, Chinese goods may reach Vietnamese consumers primarily through AI livestreaming channels, where virtual personalities market and promote goods in Vietnamese without the need for human intermediaries. Consequently, thousands of freelance workers in Vietnam engaged in livestreaming sales of Chinese products are at risk of unemployment due to this technological shift.
