GLOBAL e-commerce is undergoing a seismic shift, driven by the rise of cross-border business. What was once dominated by traditional supply chains has now evolved into a globally connected trade system, where sellers can reach international consumers directly.

China has long been the powerhouse of this space, but emerging players in South-east Asia, such as Vietnam, are becoming serious contenders. With competitive manufacturing costs, strategic trade agreements, and increasing foreign activities and investments, Vietnam is seemingly well-positioned to capitalise on the shifting dynamics of global commerce. The big question now is: How will Vietnam challenge China’s dominance and redefine the future of cross-border e-commerce?

We have seen how modern direct-to-consumer brands have scaled their playbook: sourcing from overseas, branding locally, and selling directly to end-consumers domestically. These are classic examples where many brands leverage China’s or Vietnam’s competitive edge in manufacturing (to keep prices low) and utilise brand premium to optimise selling prices.

Such dynamics are typically powered by decade-long industrialisation and country specialisation, which have defined manufacturing lanes for specific categories. For example, Vietnam is strong in apparel manufacturing, from simple to complex wear, such as suits. In parallel, global logistics has also undergone a decade-long period of improvement and optimisation, which has reinvigorated the current wave of cross-border e-commerce.

Consider the example of Amazon. On Amazon, you can buy almost everything and get it delivered to you in a couple of days. Not only has e-commerce delivery speed improved considerably, but the range of the product catalogue has also expanded. Unbeknownst to many, the vast majority of all products sold on Amazon US are made in China, and nearly half of Amazon US’ top sellers are China-based, many of which operate from China and some without any physical presence in the US.

Cross-border e-commerce enables sellers to leverage domestic supply chains to sell directly to international markets. Chinese sellers were the pioneers of this movement and essentially fully mastered the craft. Just last year alone, about 40 per cent of global cross-border e-commerce purchases originated from China.

The first movement originated from the “Made in China” phase, where retailers went to China to outsource cheaper manufacturing processes. Now, in a “Sold by Chinese” movement, Chinese sellers are developing direct branding and retail capabilities to sell directly to consumers on global platforms such as Amazon, instead of acting as third-party suppliers to Western brands.

This goes beyond just cheaper goods: it was about mastering the approach to e-commerce, building a standalone brand identity, and owning the full customer journey. Over time, these sellers have fine-tuned their sophisticated strategies with specific keyword targeting and optimised listings with multiple tactics. Some even adopt Western-centric branding to appeal to US consumers.

The gradual acceptance of Chinese brands perhaps reflects a maturing of customer perception, moving beyond the common fallacy of “cheap, low-quality Chinese products”.

A good example is Anker Innovation, a Chinese consumer electronics brand recognised across the globe. The company started by first selling directly to US consumers via Amazon US in early 2012, with its supply chain based in China. It eventually diversified revenue across the US and Europe and sold through both online and offline channels.

Today’s evolution embraces the concept of “Made in China, sold by Chinese as a Chinese brand, and sold on a Chinese platform”. Shein and Temu are prime examples of this movement.

By 2028, the global cross-border e-commerce market is expected to reach US$5 trillion, growing rapidly from US$2 trillion in 2024. It currently accounts for 31 per cent of all e-commerce transactions worldwide, a figure projected to reach 58 per cent by 2028.

Amid these trends, rising costs, increased geopolitical tensions and diversification strategies are pushing businesses to explore new manufacturing hubs. South-east Asia, particularly Vietnam, is emerging as a key player, benefiting from shifting supply chains and increasing global demand for affordable, high-quality products.

Vietnam’s value chain is evolving fast – integrating supply, logistics and consumer-facing operations. A low manufacturing cost base, up to 30 per cent lower than in China, and the availability of raw materials gives Vietnam a distinct advantage.

With growing appeal, Vietnam has also attracted significant foreign direct investment as businesses seek to diversify their reliance on China, resulting in multiple free trade agreements with several trading partners.

Despite these advantages, Vietnam’s e-commerce ecosystem is not without challenges. Logistics remains a critical area of development. While China boasts some of the world’s most advanced shipping and fulfilment networks, Vietnam is playing catch-up.

Companies are investing in infrastructure, warehousing, international shipping routes and last-mile delivery solutions to increase efficiency. The government recognises this importance and supports it with many key policies in place to build talent and ready businesses for export.

At the consumer level, similar to China, we are already observing that Vietnamese brands that initially gained traction on Amazon are now leveraging their success to build direct-to-consumer channels. This shift from being just sellers on a marketplace to becoming recognised brands is a crucial step in the evolution of Vietnam’s e-commerce ecosystem.

If there is one wildcard in the future of cross-border e-commerce, it is the fluctuating tariff rates, policy reversals and geopolitical tensions between the US and its major trade partners.

The industry remains in a state of flux, with significant uncertainty clouding cross-border trade and making long-term planning difficult for global sellers and logistics providers. Several companies are hesitant to commit to new supply chain development or key infrastructure investments without clearer regulatory guidance.

In parallel, rising compliance costs and customs complexities are putting more pressure on smaller sellers who may not have the scale or legal resources to adapt quickly. This unpredictability threatens to slow the momentum of global e-commerce, which has historically thrived on the promise of seamless international access and cost efficiency.

One of the most significant potential changes is the likely crackdown on the de minimis exemption, which previously allowed goods under US$800 to enter the US tariff-free. This has been heavily relied upon for small direct-to-consumer shipments to maintain their low-cost advantage and also allows shipments to be sent quickly to the customer with minimal customs checks. These changes may lead to increased consumer prices and compel businesses to reassess their pricing strategies and supply chain logistics.

The writer is associate director, investment, Vertex Ventures South-east and India