Wednesday, November 21, 2018 10:34:00 AM - Markets open
VN-INDEX 911.72 -7.30/-0.79%
HNX-INDEX 103.26 -0.65/-0.62%
UPCOM-INDEX 51.67 -0.39/-0.74%
Foreign e-comerce firms accept losses in VN - 7/13/2018 9:14:53 AM
 (0 ratings. You must sign in to rate.)
Many foreign giants have invested in Việt Nam’s leading e-commerce platforms even as they incur big losses, as they continue to see the long-term potential of the country’s rapidly expanding online shopping sector. 
With all the ingredients for a thriving e-commerce economy – a young population, rising disposable incomes and growing internet and mobile adoption – the Vietnamese e-commerce market is expected to maintain an annual growth rate of 25 per cent to reach US$10 billion in the next four years, according to the Việt Nam E-commerce and Information Technology Agency (Vecita) under the Ministry of Industry and Trade.
However, the Vietnamese e-commerce market is still in an early stage of development, so it poses major challenges to players.
According to industry insiders, companies need to pump significant funds into their e-commerce business to carry out tasks from sales and marketing to warehousing and logistics, so profits are easily eaten up. Also, many platforms suffered losses from special discount offers and promotion campaigns to snag new customers.
E-commerce companies have spent aggressively to gain market share, intensifying the competition and the short-term losses, reported.
Despite a loss of VNĐ164 billion (US$7.1 million) in 2016 and more than VNĐ600 billion last year, Shopee has continously received more than VNĐ1.2 trillion in investment from its parent company, Singapore’s Sea Limited (Sea), in the first half of this year.
Shopee has pumped money into promoting its platform with plenty of discounts, free nationwide shipping service, training for sellers and other promotions.
After suffering a loss of some VNĐ600 billion in 2017, Tiki got additional investment of some $50 million from China’s second largest e-commerce group and some other investors early this year.
Tiki has also planned to call for more investment worth some $50-100 million next year, which will continue to take part in. The investment can be considered a move to race with Alibaba in Việt Nam’s e-commerce market after Alibaba acquired Lazada several years ago.
To gain large market share in Việt Nam, Alibaba’s Lazada ran up accumulated losses of more than VNĐ2.7 trillion in 2015 and 2016. With the fiercer competition in the market last year, Lazada’s accumulated loss could reach nearly VNĐ4 trillion when all the accounting for 2017 is complete, reported.
According to trade expert Vũ Vinh Phú, foreign investors are continuing to increase their presence in Việt Nam’s e-commerce market despite losses, as their current goal is to attract customers, stretching their influence in the market.
Nguyễn Mạnh Dũng, head of the Việt Nam and Thailand Office under CyberAgent Ventures, told local media that e-commerce requires a long-term investment, and investors could start to earn profits after five to 10 years of operation.
Even Amazon in some markets has only started making a profit after 10 years of investment, according to Dũng.
With fierce competition in Việt Nam, it is likely to take e-commerce firms some time before they start reaping the rewards, he added.
Online retail makes up only 1 per cent of the total retail market in Việt Nam, compared with the 14 per cent in the US and China. There is still a long way to go for the Vietnamese e-commerce market to reach its peak, so foreign companies like Alibaba, and Sea have invested in the country early to get ahead of the curve, experts concluded. — VNS
Read original article here
Newer News
12/11 PM urges banks to aid key economic sectors Read more at
23/10 Ha Noi focuses on e-commerce
31/08 Vietnam, China to open new border gate pair
17/08 Cement exports record strong growth
15/08 Vietnamese steel sector amidst US-China trade war
14/08 Rubber industry faces falling export price
14/08 US’s DoC levies anti-subsidy tax on Vietnamese laminated woven sacks
08/08 US initiates anti-dumping investigation into VN’s cold rolled steel
06/08 Agro-forestry-fishery exports grow 7.8 percent in 7 months
04/08 Vietnam works hard to have “yellow card” warning removed
Older News
13/07 Vietnam can gain from the US-China trade war: Economist
11/07 Vietnam’s automobile sales drop 6 percent in first half
06/07 20 items earn more than 1 billion USD in export revenue in H1
06/07 Ministry releases anti-dumping duties for import stainless steel products
05/07 Fisheries sector strives to meet EC’s requirements
05/07 China’s reduced import tax boosts Vietnam’s tra fish export
04/07 Vietnam’s export turnover to hit 236.6 billion USD in 2018
04/07 Turkey imposes anti-dumping evasion duties on Vietnam’s POY yarn
29/06 Import-exports to go up by 13 percent
27/06 EC’s yellow card warning – big chance for fisheries sector’s restructuring
Newsletter Signup
Top Stories
VN Index to rise amid volatility, weak liquidity
VN stocks continue rallying
VN manufacturing PMI hits 22-month high in March
CPI goes up 4.96 percent year-on-year in first quarter
Slight rise in February CPI
Market Update
Last updated at 10:45:54 AM
VN-INDEX 911.72 -7.30/-0.79%
Real-time chart
Top 5 Actives
Top 5 Gainers
Top 5 Losers
My Favorite Quotes
Your most recently viewed tickers will automatically show up here if you type a ticker in the Get Quotes box on the top of the page.
Company Research
Type in the symbol above for thorough background information, key statistics and financial information.
Stock Sectors
We continuously improve our services, here are the latest updates...
Allow you to monitor a customised group of securities. You can set up multiple Portfolios to help you better manage your investments.
Trigger Alerts
Get up-to-date alerts delivered directly to your email address.
Stock Screener
Allow you to filter the market and find exactly what sort of company you are looking for.
Live Terminal
Get instant access to FREE REAL-TIME streaming quotes for hundreds of stocks from HOSE, HNX and UPCOM exchanges.