Business Expansion

• Small businesses can reach international customers with just a website.

Example: A young person in Da Nang can sell canvas paintings to customers in the U.S. through Etsy.

Disadvantage

Job Displacement

• Traditional stores and retail workers may be affected.

Example: Some small local shops had to shut down because they couldn’t compete with online shopping.

• E-commerce platforms use algorithms to suggest products based on a customer’s wishlist and buying history, increasing shopping needs and making purchasing not only faster but also more relevant.

• Example: A customer who often buys skincare products on Shopee starts seeing recommendations for new face masks, cleansers, and beauty tools tailored to their past purchases. This helps them discover more useful products without having to search, saving time and effort.

Disadvantage: Security and privacy risks

• Online shopping involves sharing personal and financial information. If the platform or website is not secure, customers may face issues like data leaks or online scams. In reality, it has many cases that people are leaked personal information, leading to lose money due to scammers and imposters.

• Example: In some cases, user information on e-commerce platforms is leaked and used by scammers. They may call pretending to be from the platform and ask the buyer to transfer money. For people who have too many orders or don’t pay close attention, they might transfer the money without realizing it’s a scam. Once the money is sent, it’s almost impossible to get it back. Additionally, some privacy risks come from the users themselves. For instance, after unboxing a product, many people throw away the packaging without removing personal details like name, phone number or address. Scammers can collect this information and use it to target victims. As a result, apart from platform security, users also need to protect their own information carefully.

Disadvantage – Dependence on Technology:
Online stores rely heavily on websites, apps, and payment systems. If there is a system crash, slow loading time, or technical failure, it may cause loss of customers and sales.
Example:
During a flash sale, a cosmetics website crashes due to high traffic. Customers get frustrated and leave without making a purchase.

Advantage: Flexible Payment Options

Customers can choose from credit cards, e-wallets, cash-on-delivery, and more.

• Example: A Vietnamese buyer can use Momo, ZaloPay, or COD depending on preference.

Disadvantage: Over-Reliance on Third Parties

Businesses relying on marketplaces (e.g., Shopee, Lazada) have less control over branding and policies.

• Example: A seller can be banned or delisted without much recourse

Easy Promotion

E-commerce enables businesses to easily promote their products by leveraging various digital marketing tools such as SEO (Search Engine Optimization), Google Ads, Facebook Ads, and other online advertising platforms. These tools allow companies to target specific customer groups based on interests, behavior, and demographics. Additionally, businesses can monitor and analyze the performance of their campaigns in real time, helping them optimize their marketing strategies, reduce costs, and increase sales efficiency.

DISADVANTAGE

Lack of Physical Experience

One of the major drawbacks of e-commerce is that customers cannot physically see, touch, hold, or try the products before making a purchase. This is especially important for items like clothing, cosmetics, furniture, or electronics, where physical interaction plays a key role in the buying decision. The absence of real-life experience can lead to misunderstandings about the product’s color, material, size, or functionality, which may result in customer dissatisfaction and a higher return rate. This not only affects the customer experience but also increases operational costs for the business.

EXAMPLE: The clothes don’t fit, but the return policy is too complicated or not supported at all.

E-commerce platforms allow customers to shop at any time, providing convenience beyond business hours.

Example:

A university student in Hanoi can order a birthday gift for a friend at midnight on Tiki, without worrying about store closing times.

Disadvantage: High Competition and Price Wars

Online markets are saturated, and sellers often undercut each other’s prices to win customers, which can lower profit margins and hurt small businesses.

Example:
A small business selling handmade jewelry on Shopee may struggle to compete with mass-produced, cheaper items from larger suppliers, forcing them to cut prices and lose revenue.