VietNamNet Bridge – Four of the five best-known retail websites in Vietnam belong to Vietnamese owners.

Vietnam is the only market in the region where domestic retail websites overwhelm foreign ones, according to comScore, a market survey firm. Vatgia.com, Lazada.vn, 5giay.vn, enbac.com and Thegioididong.com are the websites which have the highest numbers of visitors in Vietnam. Of these, Lazada.vn is the only foreign run website.

Vatgia.com is believed to be the most popular in Vietnam, accounting for 50 percent of the total unique visitors of all the five leading websites.

On Vatgia.com, which was established in 2007, there are 24,000 shops displaying their products. The website attracts 1.2 million visitors everyday and has the trading value of VND4 trillion per annum.

Vatgia.com obtained the impressive growth rate of 30 percent in 2012-2013, but the manager of the website believes that the growth rate could be even higher.

He has every reason to set a high target for Vatgia.com. Deputy Chair of the Vietnam E-commerce Association Nguyen Thanh Hung said at an event in Hanoi that the domestic e-commerce has been developing well with the annual turnover of $700 million. This means that every Vietnamese buys $30 worth of products from retail websites a year.

Vietnam, Thailand and Indonesia are considered the three hottest Internet markets in South East Asia. With the high populations of 90 million, 65 million and 245 million, respectively, and the expanded middle-income class, these are the potential markets for investors to exploit.

A lot of foreign big guys have poured money into the region, including the one from Germany – Rocket Internet.

The investor has been developing at the rocket’s speed in South East Asia. In early December, the firm successfully called for the $120 million investment for the two websites, namely Zalora.vn. and Iconic in Australia. One week later, it announced the additional investment of $250 million for Lazada.

The noteworthy thing is that most of the investments come from Tesco PLC, the British biggest retail group.

Rakuten Ichiba, a big Japanese group, is also believed to plan to jump into the Vietnamese market in 2014, after it has set foot in Indonesia and Thailand.

In Japan, Rakuten Ichiba is managing some 40,000 stalls, accessing 75 million online buyers, or 58 percent of the country’s population.

In South East Asia, Rakuten penetrated the Thai market in 2009 after buying 67 percent of TARAD.com. In 2010, the Japanese group joined forces with Global Mediacom, the biggest media corporation in Indonesia, to form up Rakuten Belanja Online, a retail model in which Rakuten holds 51 percent of stakes.

Rakuten and Rocket Internet have been following different ways to approach the market. Rocket Internet strives to move ahead at the rocket’s speed, while it builds up and develops products itself, Rakuten has been trying to join forces with local units.

Analysts believe that the Japanese group is very likely to do the same in its plan to join the Vietnamese online retail market in 2014.

However, they have warned that both Rocket Internet or Rakuten would meet difficulties in Vietnam because of their high operation costs and the lack of deep knowledge about domestic consumers.

Nguyen Ngoc Diep, Managing Director of Vatgia.com, said Vietnamese groups cannot compete with the foreign big guys in terms of financial capability, but they have good workers and low operation costs.

NCDT