Thailand-based Central Group’s Robins has just announced temporarily stopping online operations in Vietnam maybe due to the fierce competition in the sector.
The latest announcement published on the Robins.vn website stated that the online shopping featurewill temporarily halt from March 27 and only the two physical stores in Hanoi and Ho Chi Minh City will continue operations.
Central Group’s paddling at a standstill is nothing new, given the fierce competition in the local e-commerce market. Previously, Mobile World Group in late 2018 also announced the closure of its e-commerce platform vuivui.com after two years of operation.
Its former CEO Nguyen Duc Tai believed that its e-commerce platform would lead the local market, but it failed. Even giants like Shopee, Lazada, and Tiki are suffering huge losses to gain and maintain market share.
After seven years, Tiki has accumulated nearly VND600 billion ($26.43 million) in losses, including VND308 billion $13.56 million) in 2016 and VND284 billion ($12.5 billion) in 2017.
Its revenue in 2016 reached VND62.4 billion ($2.74 million), up six times against 2015. However, the e-commerce platform took losses of nearly VND179 billion ($7.9 million) in the same year due to overly high sales expenses. Accordingly, sales expenses in 2016 were over VND222.5 billion ($9.8 million), tripling against 2015.
In the 2015-2016 period, Tiki’s main competitor Lazada reported losses of VND1 trillion ($43.39 million), increasing its accumulated losses to VND2.7 trillion ($117.1 million) by the end of 2016. In the context of a fiercely competitive market, Lazada’s losses in 2017 alone are estimated at VND1 trillion ($43.39 million) and its accumulated loss may increase to VND4 trillion ($173.56 million).
Many experts stated that the local e-commerce market is still in its infancy, and the trend to risk losing money in order to gain large market share is forecast to continue.