A merger could pose a significant threat to regional counterparts Lazada and Shopee.
In what could be a major consolidation in the Vietnamese e-commerce space, JD.com-backed Tiki and SoftBank Ventures Asia-backed Sendo are said to have agreed to merge their businesses in an all-stock deal, according to people privy to the matter. Deal Street Asia reported.
According to a report by KrASIA, A source confirmed with KrASIA that both sides have consulted the Ministry of Industry and Trade’s competition authorities, meaning that the merger could happen in the near future. A Tiki spokesperson said Tiki would not comment on the story and Sendo did not return calls.
Tiki and Sendo have always been neck-to-neck in terms of competition with Lazada and Shopee. According to iPrice’s third quarter statistics for 2019, Shopee and Sendo emerged as Vietnam’s top two largest e-commerce platforms by web traffic. Tiki dropped to the fourth place for this ranking and at the time, iPrice predicted that the decline in Tiki’s monthly website traffic (from 33.7 million in Q2 to 27.1 million in Q3 in 2019) could be a temporary fluctuation, attributed to the company’s focus on improving its infrastructure.
Both Tiki and Sendo have raised significant amounts of money. Sendo raised a USD 61 million Series C round back in November and Tiki has raised a total of USD 62.5 million to date, according to statistics from Crunchbase.
Sendo has business to business (B2C) and customer to customer (C2C) businesses, and currently serves more than 300,000 sellers and 10 million buyers. Unlike its competitors, Sendo focuses on customers in all regions, especially in rural areas.
Founded in 2010 by Vietnamese founder Tran Ngoc Thai Son, Tiki started out as an online bookseller and soon ventured out to sell products across 26 different categories.
Vietnam’s e-commerce sector is predicted to be worth USD 23 billion by 2025, according to the e-Conomy Southeast Asia 2019 report by Google, Temasek Holdings, and Bain & Company.
However, the competition has been increasingly burning money to acquire consumers and the sector is being held back by issues such as logistics and lack of consumer trust.
A number of smaller e-commerce platforms have recently exited this competitive sector, including Vingroup’s Adayroi, Lotte’s online marketplace lotte.vn, and Vietnam-based e-commerce startup Leflair just earlier this month.