In recent years, e-commerce has become one of the fastest growing industries in Southeast Asia. One of the reasons for this rapid growth is that ASEAN economic integration has adopted cooperation strategies that are in line with the trend, typically the ASEAN E-Commerce Agreement.

1. The situation of e-commerce in ASEAN before and after the Agreement signing

The ASEAN Agreement on E-Commerce, signed on January 22, 2019 in Hanoi, Viet Nam, has established common principles and rules to promote the development of e-commerce in the region and strengthen the capacity to implement those principles and rules.

Key points of the ASEAN e-Commerce Agreement include:

• Enhanced data protection and privacy: Member countries commit to protecting personal information and consumer data in online transactions.

• Improved payment and delivery infrastructure: Making it easier for consumers and businesses to conduct cross-border transactions.

• Support for small and medium-sized enterprises (SMEs): The Agreement facilitates easy access for small businesses to the large e-commerce market in the region.

• Reduced tariff and non-tariff barriers: ASEAN countries commit to eliminating policies that hinder e-commerce activities, creating a fair and equal competitive environment.

The Agreement officially came into force on December 3, 2021 after receiving the notification of Indonesia's ratification under Article 19 (2) of the Agreement and has demonstrated its role in reducing barriers to e-commerce, protecting the rights of consumers and businesses, and facilitating cross-border transactions in the region when the E-Commerce Agreement is a tool, especially in the context of ASEAN's economic recovery after the COVID-19 pandemic.

To date, the 10 ASEAN member countries have witnessed the boom of e-commerce in recent years. According to a report by Google-Temasek, the value of the ASEAN e-commerce market has reached about 282 billion USD in 2023 and is expected to continue to increase strongly in the following years. This development comes not only from large e-commerce platforms such as Lazada, Shopee or Tokopedia but also from many new business models, including online retail platforms, delivery services, electronic payments and business support tools.

2. Strong growth of Viet Nam's e-commerce market

Viet Nam, with a population of nearly 100 million and a high Internet usage rate, has become one of the most vibrant e-commerce markets in the ASEAN region. Before the ASEAN E-commerce Agreement came into effect, Viet Nam's e-commerce recorded impressive growth with the explosion of e-commerce platforms such as Shopee, Lazada, Tiki, Sendo and other online retail platforms.

According to a report by the Ministry of Industry and Trade of Viet Nam, the value of Viet Nam's e-commerce market in 2023 reached about 16 billion USD and is forecast to continue to grow strongly in the following years. Participation in the ASEAN E-commerce Agreement has created more opportunities for Vietnamese businesses to expand into regional and international markets, especially with ASEAN countries with similarities in culture and consumer habits.

The entry into force of the ASEAN E-Commerce Agreement brings a number of positive impacts to Viet Nam's e-commerce, including:

• Expanding business opportunities: Vietnamese businesses, especially small and medium-sized enterprises, can now access markets in the ASEAN region more easily without facing tariff barriers or complicated administrative procedures.

• Improving infrastructure and technology: E-commerce platforms in Viet Nam have invested heavily in technology and infrastructure to meet international transaction needs, helping to improve user experience and enhance business efficiency.

• Strengthening consumer protection: Regulations on consumer rights protection according to ASEAN common standards help increase trust and encourage consumers to participate in online transactions, thereby promoting the consumption of goods and services.

3. Challenges and prospects

Although e-commerce in ASEAN and Viet Nam has grown strongly, there are still many challenges for both businesses and consumers. One of the biggest issues is data security and consumer privacy protection, as the growth of e-commerce means more personal and financial data needs to be protected. Countries in the region need to cooperate more closely to build effective security standards and violation-handling mechanisms. In addition, the development of logistics, transportation and electronic payment infrastructure is also a key factor for e-commerce to develop sustainably. Although Viet Nam and ASEAN countries have made great strides, to build a complete e-commerce ecosystem, countries need to cooperate and reform public policies, while improving the competitiveness of businesses in the region. With ASEAN upgrading regional digital economic cooperation through the launch of negotiations for the ASEAN Digital Economy Framework Agreement (DEFA), e-commerce in the ASEAN region is expected to ensure sustainable growth in a stable digital trade environment, highly committed by ASEAN members and will be an indispensable component of the regional economy.