Vietnam e-commerce market growing fast

Vietnam is one of the most attractive eCommerce markets in the region for investors. With an explosive 33% compounded annual growth rate (CAGR) over the past two years, Vietnam ranks high among the fastest-growing eCommerce markets in the region.

Frost & Sullivan forecast that the eCommerce market in Vietnam will reach a value of $3.7 billion by 2030. The year 2017 alone was a flourishing year for Vietnam’s eCommerce market with millions of dollars in investment capital poured in from foreign investors.

To explore the investment landscape in Vietnam, iPrice has collaborated with Cento Ventures to analyze the pattern of eCommerce investment in Vietnam. The report revealed the following findings about Vietnam’s eCommerce scene:

The big 6 behind Vietnam’s eCommerce funding

The largest investors in Vietnam’s eCommerce market include tech giants, venture capital firms and investment companies such as Alibaba, Tencent, Temasek Holdings, Dragon Capital, CyberAgent Ventures and IDG Ventures Vietnam.

Alibaba, Tencent, and Temasek started investing in Vietnam’s eCommerce market only in recent years, while both Dragon Capital and IDG Ventures Vietnam have been seeding investments since the early beginnings., owned by Tencent, the largest Internet company in China, recently completed its large-scale investment in and became the largest shareholder of Tiki in January 2018. Although the exact figures were not disclosed by both parties, local media estimated it to be $44 million.

Besides, Tencent also expanded its stake in Vietnam’s largest digital content company and the only billion-dollar startup in Vietnam – VNG. The amount of investment is confidential, but according to a credible news source, Tencent is now VNG’s largest foreign shareholder.

In addition, Singapore-based Sea Limited (Garena) has entered the Vietnamese market via Shopee, the mobile-first marketplace platform. The largest shareholder of Sea Limited, which operates Shopee, is also Tencent.

Lazada is backed by two giants – Alibaba, the Chinese multinational eCommerce and technology conglomerate, and Temasek Holdings, the global investment company owned by the government of Singapore.

In November 2014, Lazada made a funding announcement worth $249 million from Temasek Holdings. In June 2017, China’s Alibaba invested $1 billion in Lazada and increased its total stake to 83%.

Prior to investing in Lazada, Temasek also invested in FPT Corporation, an internet corporation which owns Sendo and FPT Shop. As of July 2018, Sendo has become one of the most popular eCommerce sites in Vietnam in terms of web traffic, according to SimilarWeb.

The report also revealed that Vietnam is a hotspot for investors from around the world. The burgeoning eCommerce market in Vietnam has attracted major investors from Japan, Germany, the United States, Korea, China, and Singapore.

With six companies invested in Vietnam’s eCommerce market (BEENOS, CyberAgent Ventures, econtext Asia, SBI Holdings, Sumitomo Corporation, Trancosmos), Japan tops the list of foreign countries with the highest number of investors in Vietnam. In 2017, Japan invested a total of $9.1 billion in Vietnam, taking over Korea ($8.5 billion) and ranked as the largest foreign direct investment (FDI) country in Vietnam.

Germany and the US are two countries outside of Asia that are actively invested in Vietnam’s eCommerce market.

In 2012, Intel Capital, the investment arm of the computer processor juggernaut, revealed that it had invested a combined $17 million in two Internet companies in Southeast Asia, with one of them being VC Corp, the Internet content firm in Vietnam. VC Corp has since been known as the parent company of several eCommerce platforms: Mua Re, Enbac, Mua Chung, Rong Bay. Over the years, the list of US investors continued to grow, with firms such as JPMorgan Chase & Co. and Summit Partners allocating capital to the Vietnamese eCommerce industry.

Deutsche Bank and Rocket Internet are among the most prolific German investors in Vietnam. After selling several start-ups like Easy Taxi, Foodpanda, and Zalora to its competitors, Rocket Internet’s strongest presence in Vietnam remained with its investment in Lazada. Deutsche Bank, on the other hand, had become one of the largest shareholders of FPT Corporation since 2007. The German investment bank and financial services company later went on to increase its share in FPT in June 2011.

According to a report on EnterpriseInnovation

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