E-commerce: narrow door for Vietnamese businesses

As in previous years, Lazada Vietnam was the first online shopping website to start the year-end shopping season. It offered sharp price discount rates for 15,000 products in a sale promotion campaign on November 9-11.

All the orders with weight of less than 6 kilograms were delivered free of charge on those days.

Lazada Vietnam also has put four new order processing centers into operation to ease congestion. However, the most attractive feature is the 50% discount rate for sellers on the platform.

Analysts said the moves by Lazada aimed to cope with the strong rise from Shopee Vietnam.

Though Shopee Vietnam only joined the market two years ago, it has been growing rapidly with many policies to support sellers and retailers. It delivers goods to buyers for free, and helps sellers train in sales and customer-care skills.

In the past, Shopee Vietnam was a C2C platform, but it has opened the Shopee Mall service to attract businesses with good brands. Shopee Vietnam also launched its year-end shopping season with 100,000 products on sale.

With SEA’s (the holding company of Shopee Vietnam) success in its IPO in the US which brought US$800 million, the company has more confidence to go ahead in the Vietnamese market. It has spent big money on ads in the last two months, which has turned it from a ‘rookie’ into a major competitor like Lazada.

Vietnamese e-commerce firms have behaved differently amid the sale promotion campaigns. Sendo.vn and Zalo.vn were silent, while Tiki.vn offered the 50% discount rate through flash sale for many product items, and committed to deliver goods free or charge for bills worth more than VND111,000. And it promised to deliver products within two hours for bills worth more than VND599,000.

As for sellers, Tiki did not collect commission from them on November 9-12. It chose Ngoc Trinh, a model, as the KOL for the campaign.

After receiving VND400 billion worth of capital in 2016, Tiki.vn spent money on infrastructure and its labor force. Sources said Tiki is negotiating with the US-based Amazon.com and China’s JD.com, the two firms with which Tiki’s operation model has most similarities. Meanwhile, Zalo.vn is still a strategic project of VNG Group.

As for other Vietnamese e-commerce firms, according to analysts, they are unstable amid the dominance of foreign players. Lazada Vietnam pays a lot for ads to attract customers, while Shopee Vietnam spends big money to support deliveries.