VietNamNet Bridge - What will happen if Central Group and Lotte Mart, the big retail chains, jump into the e-commerce market?

After Lazada Vietnam and Tiki celebrated their anniversaries last March, the market has become quiet because the low season of the retail industry has come. 

The silence of the enterprises in the field has raised concerns that the market may see more names giving up the game.

In late 2015, in the high season, Beyeu.com, which specialized in trading products for children and women, announced its closure. One month later, Daca.vn, which operated with the model similar to Beyeu.com’s, also stopped operation.

Prior to that, Rocket Internet, the owner of Lazada Group, admitted Lamido.vn into Lazada Vietnam in March and sold Foodpanda.vn to Vietnammm in 2015. 

In April 2016, the fund sold Zalora Vietnam to Central Group from Thailand and Lazada Group to Alibaba Group.

The transfer deals are expected to create big changes to the e-commerce market. Meanwhile, sources said Central Group and Lotte Mart would jump on the bandwagon in two months. 

In late 2015, in the high season, Beyeu.com, which specialized in trading products for children and women, announced its closure. One month later, Daca.vn, which operated with the model similar to Beyeu.com’s, also stopped operation.

If this happens, analysts say, they would bring pressure which would not only affect Vietnamese enterprises but also foreign-invested enterprises.

E-commerce firms are now in the low season, but it is a busy time for them to prepare for the year-end high sale season. 

It is expected that businesses will focus on competing by improving service quality and diversifying products rather than pouring money into ads to scramble for market share. 

Lazada Vietnam in the past tried to expand its market share within a short time to become more valuable before the transfer, reportedly allocated big budget for ads. 

But, under management by Alibaba, it is believed to be focusing on improving service quality.

Sharing the same view, Nguyen Duy Vi, marketing director of Lingo.vn, said the costs for ads on Google and Facebook had increased, and businesses have to find ways to advertise more effectively.

Lingo.vn, for example, will focus on household-use products, hoping to increase the number of suppliers by twofold by the time the high season begins. The delivery time would be cut from 48 hours to 36 hours, while the mobile version would be updated and the website interface redesigned. 

“The ad plan has been drawn up with more emphasis on loyal clients,” Vi said. “With ad costs on the rise, we must retain loyal clients."

Not only e-commerce firms but logistics companies have also geared up to prepare for the year-end season.  

Nguyen Tran Thi, managing director of giaohangnhanh.vn, estimates that demand would increase three or four times compared with the same period last year.


NCDT