VietNamNet Bridge - Many investors have entered the e-commerce market with strong determination and powerful financial capability, but then later have left quietly.

Many investors have entered the e-commerce market with strong determination and powerful financial capability, but then later have left quietly.

E-commerce is a profitable business field in investors’ eyes. Since e-commerce is a new business field, investors believe the market is still large enough for all. They have rushed to set up business in recent years, because they think ‘early birds can catch worms’. And they have succeeded in calling for investments for their businesses.

Lazada.vn has called for $249 million from international investment funds, including Singaporean Temasek. Zalora.vn received an investment item worth $112 million from Access Industries. Meanwhile, Sumitomo and CyberAgent Ventures from Japan both injected money into Tiki.vn.

A report of the Ministry of Industry and Trade’s E-Commerce Agency showed that the revenue from B2C (business to customer) e-commerce in 2014 reached $2.97 billion.

The information about the good performance by e-commerce businesses has encouraged more investors to pour capital into e-commerce.

Even Vingroup, established as a real estate developer, has also jumped on the bandwagon, after deciding to invest VND735 billion in VinE-com and launching Adayroi.com after many months of preparation. 

The Gioi Di Dong, Nguyen Kim and Co-op Mart, well known as traditional retailers, have also set up their online business divisions. Training courses on e-commerce and online marketing have been provided.

However, the e-commerce market, though large and attractive, is not a good place for all. 

In July 2014, VinaGame decided to sell 123mua.vn to FPT Group. More recently, Beyeu.com, which received capital from IDG Ventures Vietnam, also left the market.

Its managers left a message on its website: “Thuong mai dien tu can rat nhieu tien. Nhieu cong ty quyet dinh khong dot tien nua. Chuc may man cho nhung nguoi dang tiep tuc co gang” (It will take a lot of money to do e-commerce. Many firms have decided not to waste more money. Good luck to those who continue making the effort.)

The revenue from B2C (business to customer) e-commerce in 2014 reached $2.97 billion (MOIT's report)

Thoi Bao Kinh Te Sai Gon quoted a source as saying that a big name in the e-commerce sector may “say goodbye” after three years of operation in Vietnam.

Investors can enjoy advantages as e-commerce businesses can display products on websites, and do not have to spend money on retail premises or pay rent for offices in central business districts.

However, Beyeu.com has every reason to warn that e-commerce will “eat” investors’ big money. If e-commerce businesses leave the market, they will become “penniless”. Unlike manufacturing enterprises, which can liquidate production workshops, machines and equipment for money, e-commerce businesses will retain nothing after giving up the game.


TBKTSG