E-commerce market sees many newcomers

The departure of many players from the e-commerce market after spending all of their money did not threaten daring investors. More and more newcomers have appeared in the market recently.

On January 13, The Gioi Di Dong officially joined the e-commerce market with Vuivui.com. In an effort to conquer consumers’ hearts, Vuivui.com stated it will only sell genuine products and committed to compensate buyers who discover that it sells counterfeit goods.

Pham Van Trong, director of Vuivui.com project, is confident about the development of Vuivui, saying that it would make up at least 10% of total revenue of The Gioi Di Dong.

A senior executive of The Gioi Di Dong revealed that Vuivui strives to gain turnover of VND5 billion by the end of the first quarter of 2017 and the figure would rise to VND20 billion by the end of the year. 

Lotte last October launched lotte.vn in a plan to become the best shopping website for Vietnamese consumers. The investor from South Korea said it will not be too ambitious like its predecessors but will only focus on distributing fashion, healthcare, beauty and electronic products, which are essential goods for consumers.

The ‘predecessors’ include Lazada, which received huge investments from Alibaba owned by Chinese billionaire Jack Ma, and Zalora Vietnam owned by a Thai billionaire (Thai Central Group, through Nguyen Kim, has taken over Zalora Vietnam). They also include Vietnamese-owned groups, namely Adayroi, which belongs to Vingroup and Tiki, belonging to VNG.

An analyst said investors were still pouring money into the e-commerce sector because they were encouraged by optimistic forecasts about the Vietnamese market.

Vietnamese consumer habits and behaviors have changed rapidly, while internet users have become more willing to spending more money on online shopping.

MOIT estimated that about 30% of Vietnamese would be shopping online by 2030 with the spending level of US$350 per head and expected revenue of US$10 billion per annum.

Dau Tu Chung Khoan cited a report as saying that Tiki’s loss has been increasing rapidly. It incurred a loss of VND250 billion in the last 11 months after receiving investment capital from VNG.

An analyst commented that e-commerce players still cannot find the way out of a deadlock. As they distribute the same type of products, have the same delivery services and apply the same payment methods, they have to compete with each other on price. But competing solely on price is not a winning position.