E-commerce market had eventful year with B2C turnover of US$6 billion

JD has decided to invest in Tiki

Foreign companies took full advantage of the year-end occasion to showcase their financial potential. As always, Lazada Vietnam was a retailer that triggered the 2017 year-end shopping season.

With a goal of increasing sales by five times compared with ordinary days, Lazada Vietnam offered to sell 150,000 product items at preferential prices on November 9-11. One month later, it organized an event called a ‘revolution in online shopping’, offering big discounts for products and free deliveries.

Shopee, a Lazada’s big rival from Singapore, launched a program called Super Sale. On December 12-14, Flash Sale was applied to hundreds of product items, while bank card holders enjoyed another 10-20% discount.

Online Fever, applied throughout South East Asia, was the campaign launched by Zalora, a fashion product online retailer.

Adayroi and Tiki, the two Vietnamese retailers, also ran sale promotion programs in mid-December.

In order to prepare for the year’s most important sale season, Lazada Vietnam put four new order taking centers into operation. 

In 2017, Lazada Vietnam for the first time applied a 50% discount reduction program to sellers. 

Analysts said that its offering free delivery for buyers and cutting required discount for sellers was a move to compete with Shopee Vietnam, which has been growing rapidly though it joined the market two years ago.

Players with powerful capital 

Analysts say that the Vietnamese e-commerce market bears strong influences from foreign players who have powerful financial capability.

Under SWOT (strengths, weaknesses, opportunities and threats) analysis model, the challenges in joining industries are mentioned as an important factor. 

Meanwhile, the war between Lazada Vietnam and Shopee Vietnam, according to analysts, are generating big barriers for domestic firms.

While Lazada Vietnam creates barriers when spending big money on ad campaigns to attract users, Shopee Vietnam focuses on supporting delivery and money collection services. 

Although both companies did not disclose the amount of money they spend on advertising and shipping in Vietnam, experts in the e-commerce industry can estimate.

Analysts estimated that Shopee spends tens of billions of dong every day.

To compete with foreign giants, Vietnamese firms need support from foreign investors. 

In the latest news, JD, the biggest rival of Alibaba in China, has reached an agreement on investing in Vietnam’s Tiki.