Ecommerce in Vietnam

Ecommerce in Vietnam is a booming industry that is estimated to be worth $24 billion in 2025. The competition is cut-throat and features heavily-invested companies such as Shopee, Sendo, Lazada and Tiki.

CompanyFunding SizeSource of FundingNext Round
Tiki$44 millionJD in 2018Announced plans to raise $100 million in Jun 2019
Shopee$51 million Parent company (SEA) in 2018
Lazada$2 billionAlibaba in Mar 2018
Sendo$51 millionSBI Holding in 2018Announced plans to raise $61 million in Nov 2019
Source: cafebiz

One of the biggest corporations in Vietnam, Vingroup, announced this month its intention to suspend all operations of adayroi, its e-commerce branch. For a good reason. In 2018, the four biggest e-commerce firms listed above lost a total of approximately $220 million.

Toàn cảnh bức tranh TMĐT năm 2019: Tứ hùng tranh bá Shopee - Tiki - Lazada - Sendo; Viettel gia nhập cuộc đua, Vingroup từ bỏ sàn đấu - Ảnh 6.
Source: cafebiz

The financial losses are understandable given the customer acquisition cost, investments in warehouses or assortment centers and the delivery cost. If Amazon Now is a standout service with its 2-hour delivery, within-day delivery can be considered a subpar service in the E-commerce world in Vietnam. Most of the main players are committed to delivery within hours inside Hanoi and Ho Chi Minh. The following is what E-commerce players plus Grab, a major ride-sharing app and a pivotal delivery partner in Vietnam, commit with consumers. Note that these commitments come with restrictions.

E-commerce BrandDelivery Time
Tiki 2 hours
Shopee Express4 hours
GrabExpress6 hours
GrabExpress Sieu Toc30 minutes
Sendo & Grab3 hours
LazadaWithin 1-2 working days

It is no easy feat to make such a commitment given how terrible traffic is in Hanoi and Ho Chi Minh. Look below for just a taste of what the traffic is like in the two biggest cities in Vietnam

Kinh khủng cảnh tượng kẹt xe sáng sớm ở Sài Gòn khiến cả ngàn người trễ giờ làm - ảnh 8
Source: Baomoi

It will be interesting to see how these companies can be profitable, how they can branch out to other provinces outside Hanoi and Ho Chi Minh, how they can delivery returns to investors and whether they could come up with something similar to Prime and AWS that obviously contributed so much to the health and profitability of Amazon.

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