Tiki CEO Tran Ngoc Thai Son steps down, casting shadows over IPO plan

July 13, 2023 | 15:43
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According to a report by DealstreetAsia, Tran Ngoc Thai Son, CEO and co-founder of Tiki, has tendered his resignation to the company's Board of Directors.
Tiki CEO Tran Ngoc Thai Son steps down, casting shadows over IPO plan

The news comes as a surprise since Son, who founded Tiki 13 years ago, has been a pivotal figure in shaping the company. In 2010, he established Tiki as an online platform for selling English-language books, starting with a modest inventory of around 100 titles managed from his family's garage and a makeshift office in his bedroom.

Operating from this location, Son worked with a meagre initial capital of $5,000. Despite financial constraints, his ambition to tap into Vietnam's burgeoning e-commerce market and a passion for reading drove the inception of Tiki.

Over a decade, Tiki ascended the e-commerce ladder in Vietnam, posing a significant challenge to regional behemoths like Shopee and Lazada. However, the past fiscal year has brought forth a turbulent period for the company.

According to audited reports, Tiki’s total revenue for 2022 declined by 7 per cent compared to 2021. Simultaneously, the company witnessed a 4 per cent hike in its total expenses, resulting in a 39 per cent spike in its operational losses.

However, 2021’s financial data remains unaudited due to the creation of Tiki Global Pte. Ltd. in Singapore, which controls over 90 per cent of Tiki's shares.

Operating within a business-to-consumer and customer-to-customer framework, Tiki’s primary revenue stream (88 per cent) comes from product sales. Interestingly, logistics, a part of Tiki's service sector, has recorded a 7 per cent on-year growth, reflecting the company's focus on expeditious deliveries since its inception.

In contrast, platform commissions have seen a 37 per cent reduction. The fastest-growing component has been advertising, marking a 131 per cent surge from the fiscal year 2021. However, this contributes just 2 per cent to the overall revenue.

In fiscal year 2022, Tiki's overall revenue slipped by 7 per cent, while sales costs witnessed a marginal 1 per cent decline. Consequently, the company's gross profit margin dropped from -9 per cent to -16 per cent.

As of March 2022, Tiki reported cash and equivalents totalling approximately $187 million, inclusive of the massive $258 million fundraised in November 2021 but excluding a $90 million investment by the South Korea-based Shinhan Financial Group in May 2022.

Assuming the inclusion of the latter investment and a cash flow from operations at $100 million, Tiki may sustain its operations for another three years before requiring additional capital. This suggests that Tiki's prospective initial public offering may be deferred until 2024 or early 2025, as cited by DealstreetAsia.

Mindset change to boost status of Vietnam’s logistics Mindset change to boost status of Vietnam’s logistics

Vietnam continues to be chosen as a destination to create growth space for logistics, but more sustainable development remains a target that may be further off.

Consumers empowered with Kredivo Consumers empowered with Kredivo

By continuing to leverage top-notch technologies, fintech group Kredivo is well-positioned to maintain its market triumph in the buy now, pay later (BNPL) market and offer Vietnamese customers with an unparalleled experience, tapping into the country’s rapidly growing e-commerce sector with a convenient and secure way for online payment.

By Trung Duong

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