Shopee, a Singapore-based mobile marketplace startup, has expanded its operations in Vietnam under the support of Sea – formerly known as Garena – Southeast Asia’s largest internet platform provider.
Last week, Shopee Vietnam celebrated its first anniversary. Since its local debut, the firm’s app has been downloaded five million times and its listings have increased by 133%, with a total of four million listings to date.
Regionally, Shopee has achieved an annualized gross merchandise volume of over US$3 billion, with its mobile market app having been downloaded on over 40 million devices.
In the past year, Shopee has advanced online shopping in Vietnam by expanding its range of product listings, providing buyers with a fast and integrated delivery system, and offering buyers more competitive prices.
Pine Kyaw, managing director of Shopee Vietnam, said, “Vietnam is the firm’s key market in the region, with the third-fastest user growth rate following Taiwan and Indonesia. We have grown tremendously over the past year and our performance has far exceeded our expectations.”
Moving forward, Shopee aims to expand its user base nationwide. “We want to cater to every buyer and seller nationwide. With our robust and well-integrated platform, we’re confident that we can provide an easy and hassle-free shopping experience and be the one-stop shopping destination in Vietnam,” he said, adding that Shopee has plans to achieve double-digit growth in the Vietnamese market.
In addition to e-commerce platforms, Singaporean logistics firms are also tapping into the delivery side of the e-commerce sector.
Julien Brun, managing partner of CEL Consulting, said that Singaporean firms realised that there is no dominant player in Southeast Asia for last-mile delivery, and by being early entrants into core markets in Southeast Asia, they can gain an advantage.
Singapore’s Ninja Van is known to strategically target burgeoning markets, where large e-commerce giants like Lazada and Qoo10 are operating.
Founded in 2014, Ninja Van is the fastest growing last-mile logistics company in the region. Ninja Van has expanded its services to most markets in Southeast Asia, including Vietnam.
Brun further noted that Singapore, the regional headquarters of many multinational companies in Asia, is more advanced in terms of technology, which is a major bottleneck in the Vietnamese logistics sector.
Following the deregulation of share ownership constraints in various sub-sectors – including warehousing and express delivery services – the trend towards mergers and acquisitions (M&As) in the Vietnamese logistics sector is on the rise.
“As most local logistics firms are lagging in technology and investment, they view partnerships with foreign companies, including those from Singapore, positively as a chance to upscale their current businesses which have been solely relying on organic growth. M&As with local companies can help foreign investors shorten the market entry process, reduce costs, and take advantage of current networks and local business know-how,” Brun said.
Vietnam-based Indo-Trans Logistics Corporation (ITL) has benefitted from its partnership with Singapore Post. Last year, ITL established the courier company SpeedLink to serve the rising demand for e-commerce logistics.
Kimberly Oanh, deputy general director of ITL, said, “Singapore Post has offered us know-how and best practices for e-commerce logistics, international operation standards in expanding network and service qualities, and global e-commerce logistics.”
SpeedLink has plans to consolidate its presence in the market by increasing its e-commerce customer base. The company is extending its local network, targeting countrywide coverage by the end of 2017. SpeedLink has recently added new vehicles in 12 provinces in northern Vietnam.
Kyaw noted that many tech companies are entering Singapore to pilot new services – most recently, Amazon has begun a pilot programme in Singapore. “Being located in Singapore allows you to learn from other tech companies and avoid repeating their failures in other markets,” he said.
“Singapore is small so the cost of failure is small. If you invest in big countries like Indonesia or Vietnam, the cost will be huge. What we learn in Singapore we will transfer to other countries. Over the next few years, the percentage of online retail in Vietnam will peak. We will continue our efforts to digitalise the economy and attract more consumers online,” he added.
According to CEL Consulting, Vietnam’s e-commerce market was valued at US$5 billion in 2016, accounting for about 3% of total retail trade. Although this percentage is modest at this stage, the sector is quickly developing, with many e-commerce companies reporting double-digit growth. The e-commerce market size is expected to double by 2020.