The presence of foreign players in Vietnam's e-commerce market, including Alibaba, Tencent, JD, heats up competition to gain market share.
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By acquiring the Singapore-based online shopping platform Lazada in April 2016, Alibaba, China's largest e-commerce firm, officially entered the Vietnam's market.
Meanwhile, JD.com - the main rival of Alibaba in China - stepped up its effort to gain foothold in the Vietnamese market through the investment of US$44 million in Tiki, a local online retail service by the end of 2017, becoming one of the largest shareholders at Tiki.
Singaporean online shopping platform Shopee under SEA Group has grown rapidly in Vietnam's market after its launch a year ago. The popularity rating of Shopee Vietnam application has surpassed that of Lazada Vietnam in the third and fourth quarter of 2017, according to a market survey conducted by the iPrice Group. Chinese tech-giant Tencent currently holds a 40% stake in SEA.
Additionally, investors from other Asian countries have also set their foothold in Vietnam.
Recently, Sen Do Technology JSC (Sendo), a leading e-commerce platform in Vietnam, announced that it had secured an investment of US$51 million from SoftBank Ventures Korea, Daiwa PI Partners, and SKS Ventures as new investors in Series B round.
"Vietnam is at its inflection point, bolstered by rapid GDP growth, young population and willingness to adopt technology. Against this backdrop, Vietnam's e-commerce has strong growth potential and we believe Sendo's marketplace model will benefit from the environments the most," stated Daniel Kang, partner and managing director of SoftBank Ventures Korea.
Major retailers from South Korea and Japan such as Lotte Group and Aeon also set up their respective online market platform in the name of Lotte.vn and Aeoneshop.com.
In 2017, Central Group from Thailand acquired Zalora Vietnam and renamed it Robin.vn. Domestic e-commerce firms such as Adayroi, a subsidiary of Vietnam's conglomerate Vingroup, is also a notable player in the market.
However, the domination of Lazada, Shopee and Tiki in Vietnam's online market is showing significant influence from Chinese investors who are also targeting the whole Southeast Asian region.
Chinese investors targeting Vietnam's mobile payment market
By acquiring major e-commerce firm in Vietnam, Chinese investors are considered to have large advantages in getting a foothold in Vietnam's mobile payment market.
As the market is in its early development stage, companies are focusing on expanding the customer bases, for which online market place is considered a solution for this issue.
In November 2011, Alibaba signed a strategic cooperation contract with Vietnam's NAPAS to bring Alipay e-wallet to Vietnam. With cooperation among NAPAS, banks and Alipay, sellers in Vietnam have accepted payments in Alipay wallet made by Chinese visitors for goods and services in Vietnam.
With more than 30 million visits each month, Lazada is expected to be a major advantage for Alipay once this application is integrated in Lazada's payment system.
Airpay of SEA Group, is also in fierce competition with Alipay, largely thanks to the group ecosystem, including Shopee, booking app Delivery Now, and delivery firm Giaohangtietkiem.
Moreover, WeChat Pay, one of China's two largest e-wallets and developed by Tencent, also joined Vietnam's market by announcing cooperation with Vietnam's VIMO e-wallet.
