Three giant e-commerce corporations, Alibaba, Tencent and JD.com of China, have arrived in Vietnam.
There are no official figures about e-commerce market share for the last two years. However, Lazada was considered the leader with 30% of market share.
Alibaba in mid-2016 spent US$1 billion to acquire 51% of Lazada, which was called South East Asia’s Amazon.
In mid-2017, Alibaba poured another US$1 billion into Lazada to raise its ownership ratio to 83%.
Meanwhile, JD.com in late 2017 injected money into Tiki, and Tencent, a Chinese technology group in the world’s top 10, a big shareholder of Shopee.
According to Google, Lazada, Shopee and Tiki are three of the four most searched e-commerce websites in Vietnam.
Vu Vinh Phu, a retail expert, voiced concern about the presence of foreign e-commerce giants, which could ‘crush’ Vietnamese companies.
He stressed that Vietnam needs to learn lessons from the retail market. Many foreign retail chains have entered Vietnam and expanded their networks in the domestic market, such as Lotte, Aeon and MM Mega Market.
The same thing may happen in the online retail market.
“We must not let the grass grow under our feet,” Phu said, adding that the government needs to create a fair business environment and control trading activities to ensure the healthy operation of the market.
Meanwhile, deputy chair of the Vietnam E-commerce Association Le Hai Binh said he does not think the presence of foreign giants in Vietnam is a problem.
“The presence of foreign companies in Vietnam will benefit consumers as goods supply will be more plentiful, product quality will be better, and consumers will be able to receive better post-sale services,” Binh said.
“Most Vietnamese companies focus on niche markets and target specific groups of customers,” he said.
E-commerce is a ‘boundless business’. In the past, Alibaba with online trading floors in China such as AliExpress and Taobao, have sold goods to Vietnamese, but they are not managed by Vietnamese agencies, and do not pay tax. Vietnamese buyers do not want to receive high-quality post-sale services.
“As Alibaba has officially entered Vietnam through Lazada, Vietnamese customers can enjoy better services, while the ‘game’ will become fair as it also has to pay taxes like Vietnamese companies,” Binh said.
According to MOIT, Vietnam’s e-commerce revenue was US$5 billion in 2016, twice as much as the US$2.2 billion in 2013, accounting for 3% of total turnover from goods and services.
With the predicted growth rate of 35% per annum, or 2.5 times higher than Japan, the market value is expected to reach US$10 billion by 2020.