Online sellers now are not fighting for profit but for market share, analysts say.
|Online sellers’ battlefield continues to heat up |
Tiki.vn is an online market initially established by Vietnamese businessman Tran Ngoc Thai Son eight years ago. By April 2018, the foreign ownership ratio in Tiki had increased to 40.6 percent from 13.08 percent.
In early 2018, JD.com injected money into Tiki with an aim to increase its presence in South East Asia. VNG, a Vietnamese company, last year spent VND380 billion to acquire 38 percent of Tiki shares.
Tiki has been taking losses for many years. It took a loss of VND40.7 billion in 2016 and by 2017 the loss had increased to 282 billion.
However, this is commonly seen among e-commerce firms. Though e-commerce is a lucrative field, the competition in it is stiff. And despite big losses, online sellers still keep expanding their business.
Sendo.vn is an example. The brand was developed by FPT Online and four years ago, it bought 123Mua.vn from VNG to expand the online sale market share. Also four years ago, three Japanese leading technology firms poured money into Sendo to acquire 33 percent of its stake.
Nguyen Thi Hanh from Sen Do Technology JSC explained that the number of people buying goods online has been increasing rapidly in both urban and rural areas as young people, who quickly adapt to new technologies, account for a large proportion of the population.
Vietnam’s e-commerce growth rate in Vietnam is relatively high, at 25-30 percent.
The arrival of Amazon has made Vietnam’s e-commerce market even hotter.
Lieu Hung Tien from Haravan said that Chinese Alibaba bought Lazada one year ago and is planning penetrate deeper into the South East Asian market. Its bonded warehouse was built on Lang Son’s border area for two years and is expected to become operational in 1-2 years.
What worries Tien is Lazada’s statement that it has begun buying goods from six countries in South East Asia and China. This means that the goods on B2C and C2C ecosystems of Alibaba, Taobao and 1688 will be connected with Lazada and sold to Vietnamese consumers.
A survey conducted by the Vietnam High Quality Vietnamese Goods Business Association in 2018 showed that 23 percent of consumers seek information online before making purchase decisions, or 5 percent higher than last year’s survey.
Vietnam’s e-commerce market, with 93 million people, is expected to have revenue of $7.5 billion by 2025.