VietNamNet Bridge - Vietnam has set the ambitious goal of achieving $10 billion in revenue from e-commerce by 2020. The figure was $4.07 billion in 2015.

The e-commerce market saw the departure of many players in 2015 and the first half of 2016, such as Beyeu, Deca, Cucre, Foodpanda and 123mua. The major reason for the withdrawal was the need for high investments.

An analyst said that only investors with plentiful long-term capital can exist in Vietnam, where businesses compete in terms of price not convenience, which is the main advantage of online shopping.

In 2015, Deca.vn announced turnover of around $1 million and targeted $3-4 million the next year. However, it unexpectedly decided to shut down.

Phan Minh Tam, CEO of 24h, which ran Deca.vn, said on Dau Tu that he decided not to retain Deca.vn because the e-commerce market became more competitive with the appearance of many big players.

Beyeu.com, belonging to IDG’s Project Lana, a website specializing in distributing products for women and children, also stopped its operation because it ‘burned’ too much money of the investor.

Vietnam has set the ambitious goal of achieving $10 billion in revenue from e-commerce by 2020. The figure was $4.07 billion in 2015.

Lamdieu.com and Foreva.vn had to close because of bad business performance.

Present in 40 countries in five continents, taking over seven companies in eight potential markets and raising $310 million in funds, Foodpanda in 2015 also decided to stop business in Vietnam. The brand has fallen into the hands of Vietnammm.com.

A representative from Foodpanda said it was a necessary decision to stop, because it would have to make big investments but was unsure about the profits. 

Zalora, a Rocket Internet website distributing fashion products, has been transferred to Central Group, while Lazada has been taken over by Alibaba. 

Most recently, the market witnessed the failure of Lingo.vn. It wanted to become the No 1 e-commerce website in Vietnam, but had to leave in August after incurring a loss of VND150 billion in 2012-June 2016.

However, despite the failure of many big players, investors still want jump into the playing field.

Alexandre Dardy, managing director of Lazada, said the total revenue of Vietnam’s e-commerce in 2015 was $4.7 billion, just 3 percent of total retail sales, a very modest figure which was equal to 1 percent of the US market, 4 percent of Japan and less than 50 percent of Thailand. Opportunities for investors in the market remain great.

As Vietnamese consumers have become familiar with e-commerce, businesses need to apply reasonable strategies to attract them. 


Thanh Lich