In the context of impacted global commodity value chains, interrupted production and business activities under traditional models due to social distancing, the sharing economy has emerged as a suitable business model. However, these economic models contain problems when some are at risk of being acquired and "manipulated" by multinational corporations.

Among many types of e-wallets, only Viettelpay is pure Vietnamese,
the rest are invested or have sold shares to foreign investors. 

The risk of being "acquired"

According to Luu Duc Khai, Head of Research Department of Social Affairs, the Central Institute for Economic Management (CIEM), large foreign corporations with advantages in capital and technology promote the acquisition of dominant shares in sharing economy companies in Vietnam.

Foreign corporations even accept short-term losses to dominate the Vietnamese market (such as e-commerce platforms like Tiki and Sendo). In which, foreign investors play a leading role in domestic actors participating in sharing business models and connect with other overseas branches.

In fact, Grab, Uber, and Fastgo dominate the online transport market, while Airbnb and Expedia are dominating the room sharing service market in Vietnam. In the financial and banking sector, the P2P lending service market is mainly dominated by Chinese, Russian, Indonesian, and Singapore-based investors.

Pham Xuan Hoe, former Deputy Director of the Banking Strategy Institute (State Bank of Vietnam), said that the transformation of the sharing economy in Vietnam could lead to large firms taking over and manipulating markets. These firms will do business at low prices to attract consumers and gain a monopoly, after excluding competitors doing business in the traditional way.

Among the first sharing economic models in Vietnam with big brands such as MoMo, Airpay, Zalopay, GrabPay by Moca, VNPay, Viettelpay, and Payoo, only Viettelpay is pure Vietnamese, the rest are mostly invested or have sold shares to foreign investors.

Therefore, if not urgently promulgating and implementing a strategy to support domestic enterprises, it may lead to the fact that the domestic sharing economy is completely dominated by foreign investors. Additionally, when information and technology cannot be updated, other partners of the sharing economic model will become vulnerable and lose their jobs because they cannot keep up with the trend or are dominated by a new business model.

Tight supervision of "power"

Although not as strongly developed as in other countries around the world, the sharing economy in Vietnam has great potential. Meanwhile, the legal system has not kept up with this development in the domestic market, leaving many legal gaps. Some areas have legal regulations but there are many loopholes for foreign businesses to exploit, making it detrimental to the domestic market.

According to the Law on Foreign Trade Management 2017 and Decree No. 09/2018/ND-CP of the Government guiding the management of foreign trade in foreign-invested e-commerce activities, foreign investors with a business investment license requires additional business documents for providing e-commerce in the form of a website (a tool in foreign trade management). However, this trade barrier still has gaps because it only regulates the website but not a mobile phone application.

This risk can be controlled if the State has a policy and mechanism to closely monitor the "power" of platforms in the market for each product sector. This is a challenge for State management agencies.

To develop the sharing economic model, according to Nguyen Hoa Cuong, Deputy Director of CIEM, it is necessary to complete the legal system for the management of the sharing economy, clearly defining the parties’ responsibilities in the sharing economy, and the responsibilities of State agencies in managing this model.

Simultaneously, studying and reviewing current legal regulations on investment related to foreign investors who provide connecting platforms and operate under the sharing economy model in Vietnam should be done to identify and solve legal loopholes.

“It is necessary to continuously supplement and complete the legal and policy framework to build an equal competitive environment between sharing economic enterprises and traditional firms, between domestic enterprises and foreign enterprises doing sharing business in the domestic market,” said Luu Duc Khai.

In particular, it is necessary to improve the independent and autonomous capacity of technology, quickly develop fundamental technologies, especially large technologies, and gradually reduce the economic dependence on major foreign technology platforms.