Amazon, Alibaba Entry Into Vietnam Shakes Up Market

Tiki has received hefty invetsment

Amazon, the world’s leading e-commerce player, is planning to enter the Vietnamese market. The Vietnam E-commerce Association (VECOM) has confirmed the information.

VECOM’s chair Nguyen Thanh Hung said Amazon will also support Vietnamese enterprises in exporting online through the platform.

In July 2017, Amazon officially launched Prime Now, the within-a-day delivery service in Singapore.

A report from the Vietnam E-commerce Association (VECOM) shows that Vietnam’s e-commerce growth rate in 2017 was 25 percent. The B2C model is expected to witness a 20 percent per annum growth rate by 2020. 

Meanwhile, Euromonitor predicted that the growth rate in home appliance e-commerce  would be 40 percent in the 2015-2020 period, with turnover reaching VND20.99 trillion by 2020.

The retail industry in the US is facing a crisis because of the strong development of Amazon and online services. Many shops have had to shut down or change business strategies.

The offline retail industry was stunned when Amazon acquired Whole Foods at the record high price of $13.7 billion. Amazon has never spent such a big amount of money on a takeover deal. 

Analysts believe the competition will be stiff when Amazon begins operating in Vietnam. Amazon’s rivals came to Vietnam earlier, which allowed them to prepare for the competition.

Tiki has received a hefty investment, Shopee is marching forward in midst of victory, Lazada has resources from Alibaba, and Cho Tot has new ambitions.

Alibaba’s network has a strong position in South East Asia, having increased its ownership ratio from 51 percent to 83 percent in Lazada. It plans to set up an international logistics center in Malaysia by 2019.

Central Group took over Zalora Vietnam from German Rocket Internet after it bought Nguyen Kim, a home appliance distribution chain. The group also bought Zalora Thailand which is leading fashion product online sales in South East Asia. 

A report from iPrice said that eight out of 10 top e-commerce firms in Vietnam are Vietnamese owned. These include familiar names such as The Gioi Di Dong, Sendo, Tiki, Vat Gia, FPT Shop, Dien May Xanh, Adayroi and Nguyen Kim.