Although calling for capital from a series of international investors, the platforms are recording huge losses, such as Tiki's loss of 1,200 billion dong, Shopee's accumulated loss of nearly 2,700 billion dong, Lazada's accumulated loss of over 5,300 billion dong in the last 3 years.
The “Southeast Asia Digital Economy 2019" report recently released by Google Asia Pacific predicts by 2025, the Southeast Asia digital economy will triple, reaching 300 billion USD, shortening the gap with more developed markets in the ratio of contribution to GDP. In particular, Vietnam is a stronger breakthrough market than other countries.
Golden period
The e-Conomy SEA 2018 report of Google and Temasek also shows that Vietnam's e-commerce market will reach 33 billion USD by 2025. At that time, the size of Vietnam's e-commerce market will rank third in Southeast Asia, only behind Indonesia with 100 billion USD and Thailand with 43 billion USD.
Record of reality in Vietnam shows that, in the past 3-4 years, the growth of e-commerce reached a “miraculous” level. From being blind to online business, up to now, 36% of businesses surveyed say that they have sold on social networks, an increase of 4% compared to 2017. At the same time, 45% of businesses rated selling through social networks is highly effective, an increase of 6% compared to 2017. Since then, e-commerce platforms of Vietnam or foreign countries or having foreign capital such as Lazada, Sendo, Tiki, Adayroi ... have attracted more merchants and partners, and also became more familiar with consumers.
The market also witnessed the presence of “rookies” with the confidence to be able to compete with multinational technology giants. VoSo e-commerce platform of Viettel or VATO of Phuong Trang is an example. Talking to us, Mr. Tran Trung Hung, General Director of Viettel Post, said that e-commerce is still a very potential market and has good growth in the future.
“The market has not positioned who is the ultimate winner, so the opportunity is shared equally for all players to participate. Viettel Post is a latecomer, we will make the most of the advantage of going after to give ourselves the fastest and most impressive breakthrough” - General Director Tran Trung Hung optimistically shared.
Mr. Le Hai Binh, Vice President of Vietnam E-commerce Association, also assessed that although online retail platforms have clearly positioned themselves in the market, there is still chance for new businesses. If they can give the outstanding comparative advantage and has the potential to “burn money”, any platform can dominate the market.
“Fire pan” of competition
Market experts say e-commerce has a big appeal in the context that consumers increasingly prefer “shopping at home” and the online sales system is nearly saturated. And because this is a piece of cake, the battle in the market will get hotter.
Accordingly, each online retailer will have to find his own direction as well as “launching” more tricks to attract customers. For example, Tiki, despite losses due to investment in infrastructure and warehouses, did not hesitate to pour money to invest in 100 music videos of Vietnamese singers to create a habit of image and brand identity.
Investing in logistics is also Shopee's strategy as the retailer joined hands with an industrial real estate unit, BW Industrial, to build its third cargo handling center in Vietnam. Lazada, meanwhile, claims that the ecosystem offers solutions to meet the needs of brands, vendors, and consumers when it is built on three key elements: advanced technology innovations; logistics system and various payment methods…
However, every race becomes... exhausted. Although calling for capital from a series of international investors, the platforms are recording huge losses, such as Tiki’s loss of 1,200 billion dong, Shopee’s accumulated loss of nearly 2,700 billion dong, Lazada’s accumulated loss of over 5,300 billion dong in the past 3 years. The fact that the platforms began implementing policies to reduce the rights of customers such as from no charges to starting charging or increasing the current fee for sellers is considered as a move of cutting loss when having the sign of fatigue.
The competition is also shown by the ups and downs in the visitor rankings of the platforms. The e-commerce map of the third quarter of 2019 released by iPrice Group shows that Lazada from the famous “throne” position drops to the 5th position, giving way to Shopee, Sendo ... to increase the visitor ranking on website. However, Lazada still retains the advantage of the first e-commerce platform in Vietnam when it ranks second in terms of monthly mobile users. This shows that the race of Vietnam's e-commerce platforms is still very fierce when no opponent completely loses. Piece of cake is still divided among competitors have enough potential.