E-commerce market: big players follow hard on each other’s heels

JD.com, the big Chinese retailer, has confirmed its investment deal in Tiki.vn. Though both JD.com and Tiki.vn declined to reveal the investment amount, analysts believe that the capital is big enough to bring Tiki.vn back to the race in the e-commerce market.

Before JD.com announced the investment, Tiki.vn set up its marketplace business, which means that Tiki trades goods and also allows petty merchants to sell goods on its website.

Though Tiki.vn still has not announced its strategy for the time to come, observers believe Tiki.vn would apply policies to attract more merchants to sell goods on its platform and push up the 2-hour delivery service.

As for Lazada, it is making personnel adjustments to cement its position in the market. The latest move of Lazada Vietnam was the offering of a 50% commission discount on each successful order.

Analysts said that the domestic e-commerce market is burning hot and a strong M&A wave will occur in the next years. Big players will increase their pressure until smaller rivals have to leave the market.

Cho Tot also has great potential. Johan Rostoft from Telenor, the holding company of Cho Tot, said the company is seeking growth opportunities from new business sectors, while online classifieds are one of them.

In 2016, Vietnam’s Cho Tot and ImSold, the largest online marketplace, were taken over by Telenor, the telecom group from Norway.

Cho Tot is believed to continue gathering strength on online classifieds, with the focus on cars, real estate and electronics, which attract more than 50% of total number of accesses to the website.

Rostoft said that Cho Tot still has not fully exploited the potential of the model. 

iPrice Group said that unlike Thailand and Malaysia, Vietnam still has not clearly defined the B2C model and online classifieds, and e-commerce firms such as Lazada, Tiki and Shopee are still running both models.

According to Google and Temasek, the South East Asian e-commerce market value reached US$11 billion in 2017, an increase of 41% against 2015, while Vietnam is among the fastest-growing markets in South East Asia with an annual growth rate of 33%. 

Vietnam is one of the world’s fastest growing e-commerce countries with the annual growth rate of 35% per year, or 2.5 times faster than Japan, according to the Vietnam E-commerce and Information Technology Agency (Vecita) under the Ministry of Industry and Trade.