How are e-commerce platforms in Vietnam doing?

The most prominent e-commerce platforms in Vietnam include Shopee, Lazada, TikTok Shop, Tiki and Sendo. Most of them are foreign-invested enterprises or headquartered abroad.

TikToker livestreams selling clothes at Ben Thanh market, District 1, Ho Chi Minh City - Photo: PHUONG QUYEN

Along with the development of e-commerce (TMĐT), many online shopping platforms in Vietnam are growing very rapidly.

Shopee and TikTok Shop are moving forward

Figures from Metric - a unit specializing in providing e-commerce data - show that the scale of the five e-commerce platforms mentioned above in the first six months of 2024 reached 143,900 billion VND, an increase of 54.91% over the same period last year. However, this figure decreased by nearly 7% compared to the last six months of 2023.

The overall growth in the first six months of 2024 recorded overwhelming growth of the two platforms Shopee and TikTok Shop. And these are also the two platforms with sales growth, while the other three platforms "regressed".

Specifically, TikTok Shop's sales in the first six months of this year increased by 150.5% compared to the same period last year, Shopee recorded an increase of nearly 66%. Meanwhile, Lazada, Tiki, and Sendo decreased by nearly 44%, 48%, and 70%, respectively.

Looking at the above sales growth, it seems that even Shopee - the unit with the number 1 market share in Vietnam's e-commerce sector - is facing the threat of TikTok Shop.

TikTok Shop, owned by ByteDance (China), will enter Vietnam in 2022. According to Vietdata, Shopee's net revenue in 2023 will reach more than VND18,000 billion, up 70%, while TikTok Shop will reach nearly VND890 billion in 2023, up about 80% over the previous year. Both are profitable.

Vietnamese floor is weak?

The most "worrying" are probably Tiki and Sendo, two e-commerce units with Vietnamese elements. Although established since 2010, Tiki is increasingly showing signs of "losing strength" in the race for market share with other e-commerce competitors.

Tiki's business picture is partly reflected in the figures provided in the financial report of VNG - Vietnam's technology "unicorn".

VNG started investing in Tiki in February 2016 with an initial capital of VND 384 billion, equivalent to 38% ownership. After that, VNG's ownership ratio at Tiki decreased to 22.27%, equivalent to a capital contribution value of VND 510 billion at the end of 2020.

After only a few years, VNG's entire investment in Tiki was "lost" due to the loss from the associated company corresponding to the ownership ratio.

This also shows the extremely fierce level of "money burning" of e-commerce platforms. VNG is just one of many other shareholders investing in Tiki, the actual loss will be much larger than what VNG has "lost".

Besides Tiki, Sendo is also gradually showing weakness in the race. Sendo was established in 2012, an e-commerce project of FPT Online Services Joint Stock Company (FPT Online).

However, up to now, FPT does not own the majority of capital at Sendo. The audited financial report for 2023 of FPT Online Services Joint Stock Company shows that the investment in Sen Do Joint Stock Company at the end of last year was more than 3.68 billion VND, accounting for 3.29% of the interest rate and voting rights at Sen Do.

Data from Vietdata shows that in 2023, Sendo achieved net revenue of nearly 290 billion VND, but lost hundreds of billions of VND after tax.

Growing faster and faster

Also according to the 2023 online retail market overview report by Metric (E-commerce data platform), 2.2 billion product units were successfully delivered on the five largest e-commerce platforms in Vietnam (including Shopee, Lazada, Tiki, Sendo, TikTok Shop), an increase of 52.3% compared to 2022. This is the strongest growth rate in the past three years.

According to the e-Conomy SEA 2022 report by Google, Temasek, Bain & Company, Vietnam is among the countries with the highest growth rates in Southeast Asia in terms of online shopping.

Revenue and sales volume on Vietnam's B2C online retail platforms (a business model that sells directly to end consumers) are forecast to continue to increase sharply next year, possibly reaching VND650,000 billion by 2024.

Of which, the top five e-commerce platforms in Vietnam could reach more than VND310,000 billion by 2024, a 35% growth compared to 2023.

Source