Vietnam

Alibaba and Shopee clash in Vietnam as ASEAN e-commerce war rages (Nikkei Asia)

For Nguyen Ngoc, a merchant in Ho Chi Minh City selling blouses and wallets, a typical way to reach online customers is through Facebook. But these customers often ask to switch to online marketplace Shopee for payment.

Ngoc understands why: Shopee is known for free deliveries.

“From the beginning, Shopee has been geared toward low fees. People associate it with free shipping,” Ngoc told Nikkei Asia.

Free deliveries and low commissions are part of Shopee’s aggressive marketing efforts in Vietnam that have helped it become the country’s most popular e-commerce platform and grow through the COVID-19 pandemic. Shopee, owned by Singapore-based tech group Sea, drew 62 million monthly visits in Vietnam in the third quarter of 2020, up more than 80% from a year earlier.

Shopee’s bullish expansion in Vietnam is part of a new phase of development in Southeast Asia’s $100 billion digital economy. In the post-COVID era, e-commerce will be the cornerstone of a new range of alliances, and rivals are racing to build entire ecosystems to serve as many customer needs as possible.

The growth of the region’s best-known tech startups, such as Singapore-based Grab and Indonesia’s Gojek, was spurred by services such as ride-hailing. Now the rapid rise of Sea — which has become Southeast Asia’s most valuable company, worth about $100 billion — is triggering fresh tie-ups and acquisitions that are set to redraw the landscape in 2021 and beyond as economies start to recover.

Backed by cash flow from its gaming business, U.S.-listed Sea is investing heavily in e-commerce and digital financial services. In the July-September quarter of 2020 its revenues for its e-commerce unit, which covers Vietnam and other countries, rose 2.7 times from a year earlier to $618 million, while the operating loss widened from $277 million to $338 million, mainly as a result of its campaign to gain market share.

The effort seems to be paying off. According to data from iPrice Group, Shopee was the most visited site in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam in the third quarter of 2020. Only a year earlier, Lazada (owned since 2016 by China’s Alibaba Group Holding) was No. 1 in the Philippines, Singapore and Thailand, while Indonesia’s most visited was Tokopedia, the e-commerce group backed by Japan’s SoftBank Group.

To read the rest of the article, please use this link: https://asia.nikkei.com/Business/Business-Spotlight/Alibaba-and-Shopee-clash-in-Vietnam-as-ASEAN-e-commerce-war-rages

Nikkei Asia

8 January 2021

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