Amazon.vietnam

A competitive analysis for Amazon’s potential entry to Vietnam (in progress)

25 min readJan 13, 2018

Context

I love Amazon, and I am sure we all have a reason to. After a talking to many Clark alums who are working there, taking a tour in Doppler, reading Brad Stone’s book on Jeff Bezos, getting my internship applications rejected over and over again in 4 years, and spending 3 months reading everything related to the everything store, I became curious on a what-if. What if Amazon comes to my home country Vietnam? The company just made the first big push to the South East Asia market by opening in Singapore, but the competition in Asia is different than those of North America and Europe due to political, economic, socio-cultural and technological factors. Therefore, I decided to do a competitive analysis to provide an in-depth views of competitors Amazon will face if it enters Vietnam, and prove why a late entry into the highly potential but soon to be saturated market will not be a great move for Bezos’s venture.

Outline

Part 1: Introduction and in-depth analysis of competitors. Since these companies have different backgrounds and business model, I decided to split them into 3 groups. The grouping doesn’t fully reflect each company’s business model, but it will help us understand each of them easier.

First group: brick-and-mortar going online. Similar to Walmart/Jet.com.

Central Group (CG), World Mobile Group (WMG), Vingroup, and Lotte Group

Second group: online facilitators, ebay.com like companies, which have a high percentage of goods sold provided directly from third-party sellers to consumers.

FPT, Vietnam Price Group (VNP).

Third Group: direct online provider of goods, amazon.com like companies.

Lazada.vn, Tiki.vn

Note: FPT can go to both groups 1 and 2 since it also started with offline retail, then expanded online.

Part 2: Recommendations to achieve competitive advantages if Amazon decides to enter.

Central Group

Central Group (CG)is a leading retail and property group in Asia and also the number one retail and service business in Thailand. In Vietnam, CG has a very strong and diversified portfolio with hypermarkets/supermarkets, department stores, sports, fashion and e-commerce.

With the Vietnam office established in 2011, CG made several acquisition that strengthened its foothold in Vietnam’s retail market. It acquired 49% of both the well-known electronics retailer Nguyen Kim and northern rural market chain Lan Chi mart in 2015. A year later, CG paid $1.1 billion for the hypermarket chain BigC Vietnam from France’s Casino Group. CG’s brands have very strong customer awareness and many brick-and-mortar locations nationwide. The group is also the main distributors of international brands like Crocs, Fila, New Balance and Speedo in Vietnam.

In term of e-commerce, CG will directly compete with Amazon in 3 product categories: mobile devices, appliances, and clothings. CG doesn’t have a centralized everything-store e-commerce site, instead, it has nguyenkim.com (appliances and mobile devices) and robins.vn (fashion).

Mobile World Group

Mobile World Group (MWG) is a market leader and most prominent mobile devices retailer in Vietnam. MWG has expanded into appliances, grocery, pharmacy, and an recently started an everything-store e-commerce site. In 2017, MWG acquired Tran Anh Electronics and An Khang Pharmacy. Although the prices were not disclosed, the group announced that its initial budget for these two M&A of about $110 million (2500 billion Vietnam dong).

In term of e-commerce, MWG will directly compete with Amazon in 2 main product categories: appliances (dienmayxanh.com, trananh.com, vuivui.com), mobile devices (thegioididong.com, vuivui.com). Other products categories in competition are available on its everything-store e-commerce site (vuivui.com).

Vingroup

Vietnam’s Vingroup is a very successful conglomerate that started with real estates, now has a very diversified portfolio with companies in industries including manufacturing, education, healthcare, agriculture, entertainment and hospitality, and mostly importantly adayroi.com, its e-commerce site.

Vingroup has the most diversified portfolio in this list. A while ago I read an article from Wall Street Journal (WSJ)about the “Amazon diet”, where WSJ’s Katherine Bindley decided to go on an Amazon diet, using its products and services whenever and wherever she could. Yes, there is a “Vingroup diet” as well. Let’s say you are a parent in a family of 4. You can wake up in your Vinhomes residence, take your kids to a near by Vinschool, then take your spouse to a regular check-up at Vinmec hospital, and the get grocery at Vinmart, oh don’t forget to buy a couple new books at adayroi.com for your next family vacation at Nha Trang Vinpearl Resort, where you and your family will be picked up on a car manufactured by Vinfast and have a lot of fun on Vinpearl land, an island owned by Vingroup, and eat salads where the vegetables are grown by VinEco. That’s pretty neat isn’t it? Furthermore, the presence of Vincoms, Vingroup’s department stores, will bring more exposure to adayroi.com, it’s new everything-store e-commerce site, pictured below.

A Vincom shopping center in my hometown Da Nang

I think this is a very interesting concept. The “Amazon diet” surprised me, but after analyzing what you can do in a “Vinworld”, I was blown away.

Lotte Group

Just like Central Group and Vingroup, Lotte Group also has a very diversified portfolio and a recent entry to e-commerce with lotte.vn. Started with confectionaries, the Korean-Japanese conglomerate and South Korea’s fifth largest largest business conglomerate expanded rapidly into beverages, hotels, fast food, retail, financial services worldwide. In Vietnam, Lotte has strong brand awareness through its fast-fast food restaurant Lotteria (one of the first foreign fast-food chain in Vietnam besides KFC), Lotte Cinema, Lotte Mart, Lotte Chewing Gum, and later Lotte Department Store.

Yes you can also live in a “Lotteworld”. In term of e-commerce, Lotte Group will compete with Amazon through its lotte.vn.

FPT Group

FPT Group (FPT) is the largest information technology service company in Vietnam with its core business focusing on the provision of IT-related services. The group operates in 4 main sectors: technology, telecommunications, technology product distribution & retail, and education.

Sendo.vn is an online marketplace under the umbrella of FPT. In 2014, it acquire the rival 123mua.vn (translated to 123buy.vn) from VNG, an investor in sendo.vn’s competitor Tiki.vn, for 5.5 billion dong (about $240,000).

Since the merger, 123mua.vn, which has the business model comparable to ebay.com, has been slowly pulling out of the competition to leave ground for sendo.vn. In fact, when I click on products from 123mua.vn, I am directed to sendo.vn, so I will just focus on main site in this analysis.

In term of e-commerce, FPT/sendo.vn will compete with Amazon in many product categories, except books.

VNP

Vat Gia Group (translated to Vietnam Price Group) is most well known for its B2B and B2C e-commerce services and has played a decisive role in making e-commerce acceptable and widespread in Vietnam. Most comparable to Ebay.com, without the auction feature, vatgia.vn simply facilitates the sale of goods between third-party buyers and sellers, which is slightly different than tiki.vn and lazada.vn, who act both as direct providers of goods and facilitators for third-party sellers.

Started with e-commerce, VNP has built an e-commerce ecosystem with its additional businesses: an online bundle purchase site cucre.vn (translated to verycheap.vn, similar business model to Groupon), a logistic company nhanh.vn, a payment processing company Bao Kim and an online advertising agency Vat Gia Ads.

In term of e-commerce, vatgia.vn will compete with Amazon in many product categories, many of which are listed above.

Lazada/Alibaba

Germany’s Lazada Group is the biggest e-commerce player in Southeast Asia region, now owned by Jack Ma’s Alibaba. Lazada is the number-one online shopping and selling destination in Southeast Asia — present in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Jack Ma came to Vietnam last November and I was fascinated by his passion in connecting people to what they need and speech on the potentials Vietnam has in developing an e-commerce ecosystem. He really motivated me to think about e-commerce in Vietnam and the values it can bring to my developing country.

Lazada.vn will compete with Amazon in many product categories.

Tiki

Vietnam’s Tiki.vn is the fastest-growing retail company in Vietnam. The company achieves the highest customer satisfaction rate and the lowest return rate among all e-commerce players in Vietnam due to its capability to control end-to-end supply chain, from partnering with brands to deliver high-quality merchandise to managing warehouse and logistics to processing payments and providing superior customer service.

Tiki is one of the first e-commerce sites in Vietnam, and similar to Amazon’s story, it started with books and had the same product expansion strategy that Amazon did. Tiki’s Founder’s Son Tran also started packing and shipping books from his garage, although I am not sure how long it took him to get a packing table, I know it took Bezos awhile before he got one (Tiki is also one of the first sites to sell Amazon Kindles).

Tiki.vn made me think about global competition and the market entry strategy that many foreign companies chose to enter Vietnam. Southeast Asia’s e-commerce ecosystem is a new battlefield compared to North America, Europe, or China. For a fast-growing and bureaucratic country like Vietnam, many giants chose M&A to establish their footprint and expand. When China’s Alibaba bought Lazada, Thailand’s Central Group bought Nguyen Kim, BigC, and fashion site Zalora (now Robins.vn), Vietnam’s Mobile World bought electronics chain Tran Anh, Korea’s STIC and China’s JD.com invested in Tiki. Similar to Lazada.vn, Tiki.vn will compete with Amazon in many product categories. The two sites offer the same variety of products, which include motorbikes, travel services, in addition to things you would see on Amazon.

Brick-and-mortar going online vs. Online

Group 1 vs Groups 2,3

Last June UPenn published an article “Amazon vs. Walmart: Which One Will Prevail?”, which discussed Walmart’s transition in going online through acquiring digital talents and taking advantage of its offline scale. In our case with Vietnam, companies with strong offline retail presence like Central Group (with Nguyen Kim and BigC), Mobile World (with The Gioi Di Dong, Dien May Xanh, Tran Anh and Bach Hoa Xanh), and Vingroup (with VinPro and VinMart) will be able to do well to compete with Tiki and Lazada’s e-commerce power only if they take advantages of their distribution points.

Quoting the article and UPenn’s marketing professor David Bell:

“From my experience, companies that start in the digital world and slowly and surely add offline have been more successful than companies that started in the offline world and added digital.”

He says it’s easier, for example, for eyeglass e-tailer Warby Parker to open an offline store than it is for an optical shop to add a fully integrated digital experience. Since Amazon has “all this digital DNA and digital knowledge, they will presumably create the offline experience relevant to 2017 and not 1967,” Bell adds. “That’s the big difference.”

Portfolio & Delivery

Delivery and pricing are the last frontiers in the e-commerce battle. Since the estimated time of delivery still varies greatly (most sites will have ETA ranging from 2 hours to 11 days) across companies, we will only consider their physical locations both stores and fulfillment centers within Ho Chi Minh City and Hanoi, the 2 biggest markets with lots of data. I am not a logistic expert, but I am sure the combination of data and map will give us an idea of whether different companies (particularly those in group A) can roll out fast deliveries capabilities, which can go from 8 day delivery to same hour delivery. I broke down Delivery into 2 parts: Fulfillment Centers/Stores and Current Delivery Options.

For 2 reasons:

a/ Since some competitors have many physical locations across the cities, technically they can deliver and accept returns fast, just like Marc Lore’s new campaign on having Walmart employees to deliver products on their way home from work, which can potentially become an advantage to traditional retailers with strong physical presence who just started going online (Group 1).

Going off of this note. Mobile World Group’s Chairman Nguyen Duc Tai said in an interview with the Vietnam Economic Times:

“the difference is quality management and the speed of delivery. Eighty per cent of products sold on the website come from thegioididong.com and the remainder from other suppliers.”

In 2017, Amazon’s Third Party sellers sold an average of 48–50% of all products, which with 2 million-plus third-party sellers around the world that are immensely profitable to Amazon, is huge compared to Mobile World’s Vietnam market. If Amazon third-party sellers compete rigorously to drive down prices, provide value to customers. If you ever wondered where your “Seemingly Random Deals of the Days” displayed on Amazon.com are from, they are picked by Amazon from many independent merchants who take a 15% minimum price deductions (at least) and submitted their applications months beforehand (WJS).

In Vietnam, third-party sellers have a smaller impact on the companies with strong foothold in brick-and-mortar retail like Mobile World Group, Central Group, Lotte Group, and even Vingroup. Therefore, these companies with established infrastructure and extensive supply chain system can ship directly from their stores. The impact is different to e-commerce sites Sendo.vn, Vatgia.vn, Lazada.vn and Tiki.vn.

b/ On that note. Both Tiki and Lazada have fulfillment centers geared specifically for e-commerce, Vatgia and Sendo have things shipped directly from the suppliers, but I don’t know about the Vingroup, Mobile World, Lotte, and Central Group, so for the lack of a better term in this context, I will call their stores fulfillment centers, because they technically are. However, in Amazon, Lazada and Tiki’s case, the fulfillment centers stock a variety of items across many product categories, while Mobile World’s The Gioi Di Dong’s stores have mobile devices inventory, Central Group’s Nguyen Kim stores have appliances, so different competitors will ship differently. Let’s say I live in Ho Chi Minh City and order an iPhone, an air conditioner, and a bag of rice from Mobile World’s vuivui.com. Tiki, Lazada, and potentially Amazon can ship 3 items in my order from 1 location, but Mobile World will ship the

iPhone from a The Gioi Di Dong in District 3

air conditioner from a Dien May Xanh in District 4

rice from a Bach Hoa Xanh down the street from my house

Therefore we will have to do the delivery time estimation per product for some competitors (group A) instead of per order like some others (group B), at least for now.

It might sounds like I am off topic, since I could have just compared between tiki.vn vs. lazada.vn vs. adayroi.com vs. vuivui.com, just like like walmart.com/jet.com vs ebay.com vs amazon.com. But such a comparison will be insufficient since each competitors have different characteristics, starting points, and competitive advantages.

Let’s start with Central Group.

Central Group Portfolio

Nguyen Kim is an electronics retailer.

BigC is a hypermarket chain.

Robins.vn (not displayed) is an online fashion store.

Central Group in Ho Chi Minh City

As we can see, many of Nguyen Kim and BigC stores are located in the same locations, 5 pairs in fact.

CG in Hanoi

4 pairs.

A snapshot to analyze how the Nguyen Kim offline experience is in HCMC, where I live. An average score of 4.05 across 16 randomly selected stores.

And BigC.

You can ignore BigC Express (a convenience store) and their Store Support Center (an office). I wonder how come the average of thousands of reviews came out to be 4.1 across different hypermarkets (?). Overall, the ratings are pretty good, but I won’t discuss further because we focus on the e-commerce aspect.

What really interested me in considering a market entry for Amazon in Vietnam is the locations of distribution centers. Both Walmart and Target started to use their supermarkets as fulfillment centers in order to provide the fastest shipping, and we can see the same logic here with CG’s acquisitions of Nguyen Kim and BigC. What’s not here yet is a BigC.vn, which has potential to compete directly with Lotte Group’s lotte.vn, a hypermarket-with-e-commerce-capability site.

As of January 2018, a Google search “Online shopping BigC” will yield Tiki.vn and Shopee (another e-commerce site owned by Singapore’s Gerena, yes, it’s the platform that allows you to play League of Legends and Fifa Online 3 if you live in South East Asia and Taiwan.)

When Robins.com (fashion), Komonoya (one-price 40,000 vnd or $1.75 store) aren’t major players in their fields, the combination of Nguyen Kim and BigC will strongly leverage CG’s retail efforts, both online and offline.

Imaging if a consumer from Ho Chi Minh City needs a new TV and some grocery, he can have it delivered in the same day because they are stocked in the same location, much like BigC + Nguyen Kim = Walmart/Target + Best Buy. When Robins.com (fashion), Komonoya (one-price 40,000 vnd or $1.75 store) aren’t major players in their fields, the combination of Nguyen Kim and BigC will strongly leverage CG’s retail efforts, both online and offline.

Another note. I recently ordered books from Tiki.vn, and with for an extra 29,000 dong (about $1,25), my order was shipped within 2 hours. If Tiki’s one 53,819 square foot fulfillment center in Ho Chi Minh city can ship within 2 hours, I strongly believe BigC’s 9 hypermarkets across the city can provide same-hour shipping, which is what Whole Food Markets can to do Amazon Prime customers.

Sorry I got a bit off topic there. Since our focus is on e-commerce and Central Group have nguyenkim.com (mobile devices and appliances) and robins.vn (fashion), we will consider the delivery options of these 2 sites. Note that since Vietnam is a cash-based society, you pay when you receive the product (COD) and delivery days = business days.

CG’s acquisition of Nguyen Kim helps expand its electronics retail business in Vietnam. With 22 stores nationwide, expanding to 50 by 2019, Nguyen Kim is the first electronic shopping center chain in Vietnam, selling mainly appliances and mobile devices. The retailer has been a staple for household appliances, refrigerations, computers, recreational, and telecommunications products from world famous brands like Sony, Panasonic, Toshiba, Philips, JVC, Sanyo, Sharp, Samsung, LG, Electrolux, HP, IBM, etc. Founded in 1992, it experienced rapid growth and only slowed down after 2010 from fierce competitions from Mobile Word Group (The Gioi Di Dong) and Dien May Cho Lon (Cho Lon Electronics). $200 million in fresh capital from the Chirathivat family (who owns CG) will be a big push for Nguyen Kim to continue its expansion.

Another insight from CG influence is the favor Thai products in Vietnam, which could be a good starting point to discuss its acquisition of BigC Vietnam. From Thai fruits, motorbikes, apparels, cookwares, and other basic consumer products (and yes many Vietnamese will pick the Head & Shoulder shampoo bottle that is made in Thailand over the ones made in Vietnam or China, I still think they are the same, my mom doesn’t). Vietnamese favor Thai products because of their variety, prices, ease of purchase, durability, and quality, although they don’t have sufficient information to make the best comparison between different product sources. Many can say the same thing to Chinese and Vietnamese products, but Thai products will win on most cases in term of quality and customer perception, and many analysts have rooted this reasoning from Thai companies’ professional market development strategies. In addition to the Chirathivat family’s Central Group, two other Thai billionaires who have penetrated the Vietnamese retail market are Charoen Sirivadhanabhakdi, whose company Berli Jucker (BJC) recently acquired Vietnam’s biggest wholesaler Metro Cash & Carry and operates the convenient store chain B’mart, and Dhani Chearavanont, who owns Charoen Pokhphand Group (CP Group), a corporation that owns Vietnamese livestock company C.P. operates the 7-Eleven chain in Vietnam and Thailand, and also bided for Metro Cash & Carry Vietnam. In the past, the penetration of Thai products in Vietnam have been under the radar, but now with the acquisition of one of the biggest hypermarket chain (BigC), biggest wholesaler (Metro) as well as 2 other popular convenient store chains (B’mart and 7-eleven), we can expect more availability to Thai products to Vietnamese consumers.

If Vietnamese consumers can purchases mobile devices, appliances, and fashion apparels online from CG, they still have to purchases some of the most frequently bought items like food, household products, toys offline. While Korea’s Lotte Group have more Korean products in Lotte Mart and Lotte.vn, we can expect the a large quantity of products available on BigC.vn, or a potential every-store e-commerce site that will soon be rolled out from Central Group in Vietnam.

Central Group | Nguyenkim.com | Mobile Devices & Appliances

Nguyenkim.com offers free same-day shipping for major cities in Vietnam, neighbor provinces can take longer depending on product availability, but the maximum time it takes for a product to arrive will be 10–15 days. Products are shipped from the closest Nguyen Kim shopping center and by the Nguyen Kim logistic team.

Central Group | Robins.vn | Fashion Apparels

Since robins.vn take merchandises from different suppliers and warehouses, shipping is more complex.

If products are fulfilled by Robins: 1–3 days for Ho Chi Minh City and Hanoi, 3–5 days for major cities and neighbor provinces, 5–7 days for others.

For an extra 69,000 dong ($3) you can get 24-hour shipping. Otherwise orders exceed 499,000 dong (about $22) are free shipped, and others are shipped for a fee that depends on where you order.

If products are fulfilled by third-party sellers: they will arrive separately or altogether, 3–5 days for Ho Chi Minh City and Hanoi, 4–7 days for major cities and neighbor provinces, 6–11 days for others. Otherwise if the total of products you order from 1 seller exceed 499,000 dong (about $22), they will be shipped free and together, others are shipped for a fee that depends on where you order and how much the total is.

Products are shipped by Robins logistic team, Kerry Express, and Vietnam Post.

Mobile World Group Portfolio

The Gioi Di Dong/thegioidiong.com is a shopping center chain/e-commerce site that sell mobile devices.

Dien May Xanh/dienmayxanh.com & Tran Anh/trananh.vn are shopping center chains/e-commerce sites that sell appliances.

Bach Hoa Xanh is a grocery store chain.

Vuivui.com is the e-commerce site that sells everything above.

An Khang is the pharmacy chain that Mobile World Group recently acquired and will operate in 2018, which we will not discuss here.

Mobile World Group | The Gioi Di Dong in Ho Chi Minh City

With 165 individual stores (and 67 co-stores with Dien May Xanh) spread out in 24 districts in Ho Chi Minh City, The Gioi Di Dong chain has a very strong foothold in the mobile device market of Ho Chi Minh City. I managed to map out 48 stores (2 stores/district).

The Gioi Di Dong stores have very positive Google Reviews and high ratings. These are some of the stores in Ho Chi Minh City.

Mobile World Group | The Gioi Di Dong in Hanoi

170 stores, some are co-stores with Dien May Xanh.

Mobile World Group | Dien May Xanh in Ho Chi Minh City

There are 67 Dien May Xanh stores in Ho Chi Minh City, many are co-store with The Gioi Di Dong, which means that they are MWG’s facilities that can sell mobile devices and appliances.

Once again MWG’s customers seem to have a great brick-and-mortar experience, with the average store rating (based on 15 random stores in HCMC with 14 ratings) is an excellent 4.49, compared to Nguyen Kim’s 4.05.

Curious about MWG’s great customer services, I went to vuivui.com to look at their customer service page, and was very impressed with the fast responses from the MWG representatives. Most of the complains/questions are replied within 24 hours. Pictured is a customer’s question on locations where she can exchange an appliance product, which the representative responded that she can return at any Dien May Xanh (DMX) stores across Ho Chi Minh City, which there are 67 of them. Very convenient!

Mobile World Group | Dien May Xanh & Tran Anh in Hanoi

Founded in 2009, MWG has always been a major player in the South of Vietnam, and the push for the Northern market has been slow with competitions from other appliance retailers like Pico, Media Mart, FPT Shop. If The Gioi Di Dong’s marker share in Northern Vietnam is 30%, Dien May Xanh’s is only 15%, Therefore in 2017 MWG acquired Tran Anh, which will allow MWG to reach Northern customers better and build a stronger foothold. Tran Anh’s revenue, which was 1,876 billion dong (over $82 million) doubled after 4 years, however its profit margin is only 0.31% to 0.52%, compared to 4% to 5% of MWG, according to the Ho Chi Minh Securities Corporation.

Mobile World Group | Bach Hoa Xanh in Ho Chi Minh City

There are 239 Bach Hoa Xanh stores across Ho Chi Minh City. Bach Hoa Xanh stores are small grocery stores usually placed in residential areas to compete directly with hypermarkets like Co.op Mart, BigC, and most importantly the open farmers market. Amazon’s acquisition of Whole Foods will pave the way for same-hour delivery in major U.S. cities, and I can see that happen with MWG companies.

In term of e-commerce, which MWG has vuivui.com (which only works in Ho Chi Minh City for now), people can order appliances (distributed from Dien May Xanh and Tran Anh Stores), mobile devices (distributed from The Gioi Di Dong stores) and grocery (distributed by Bach Hoa Xanh Stores) across major cities.

In the first 11 months of 2017, MWG opened 688 new stores across the nation, a staggering statistic. With 117 The Gioi Di Dong stores, 351 Dien May Xanh (1 store/day), and 200 Bach Hoa Xanh stores, MWG is expanding very fast from its first day in 2009. With the overall revenue increased 38% compared to 2016, we can expect the addition of vuivui.com will make MWG to become a dominant player in retail Vietnam.

Alrighty, let’s talk logistics. Since CG did not have an everything store e-commerce site like amazon.com, I had to do nguyenkim.com and robins.vn, but since MWG has vuivui.com, I will just focus on it instead of considering thegioidiong.com, trananh.vn, and dienmayxanh.com. In addition, all the goods from thegioididong.com, trananh.vn, and dienmayxanh.com channel through vuivui.com, so it makes sense to focus on vuivui.com by itself.

Vuivui.com only works in Ho Chi Minh City, and expected to expand to other provinces soon. MWG started in the city, so we can understand why. The site offer shipping fees that varies across districts, but the average fee is 20,000 dong, a little less than a dollar. When this article is being written, there is a promotion that takes 95% of shipping fee if your total is above 150,000 dong (about $6.5). So if you can get thing delivered same-day for 1000 dong (4 cents). Customers can also set delivery time to be any day of the week (including weekend) and three blocks of time for delivery: 8AM-12PM, 12PM-5PM, 5PM-9PM.

Basically I can get a new fridge, a smartphone, and a box of beer delivered for 4 cents, that’s pretty sweet.

Looking at the 1-year-old vuivui.com, we can the website is still very new compared to that of tiki.vn, lazada.vn, or even adayroi.com. However, I strongly believe that the MWG/vuivui.com’s strength will be its very large number of stores across the country. As of November 2017, MWG has a total of 1,923 stores nationwide (1,068 The Gioi Di Dong stores, 607 Dien May Xanh stores, 248 Bach Hoa Xanh stores, in addition to 14 Phuc An Khang Pharmacy stores, changed to An Khang Pharmacy after the merger) MWG will have close to 2000 locations, which, in addition to its great in-store customer services, will make it the strongest new entrant in the e-commerce system.

Lazada/Alibaba Portfolio

According to the Malaysian online shopping aggregator iprice, the 5 most visited e-commerce sites in 2017 are Lazada.vn, thegioididong.vn (MWG), shopee.vn, tiki.vn, and sendo.vn, respectively. Looking at the monthly visits, number of mobile usage (Lazada is the first e-commerce site in Vietnam to have its own mobile application) and social media engagement, we can see a clear winner.

Let’s see how Lazada delivers. There’s two fulfillment centers, one Hanoi, and the other one (pictured below) in Ho Chi Minh City.

Lazada’s fulfillment center in Tan Binh Industrial Zone, Ho Chi Minh City

Lazada Vietnam CEO Alexandre Dardy delivers an order

I will talk about Tiki later, but lazada.vn seems to lag behind tiki.vn and vuivui.com in term of delivery speed and flexibility, for the case of vuivui.com, like I have mention above:

Mobile World Group’s Chairman Nguyen Duc Tai said in an interview with the Vietnam Economic Times:

“the difference is quality management and the speed of delivery. Eighty per cent of products sold on the website come from thegioididong.com and the remainder from other suppliers.”

Vuivui.com’s being in control of their supply chain allows its customers to select delivery time and get things delivered on weekends, an option not available at Lazada. Meanwhile, Lazada, an pure e-commerce site, has to rely on their third-party suppliers. There are 3 delivery options:

Saving: Free for total above 49,000 dong ($2), delivery time can vary between 2–14 business days.

Standard: Free for total above 150,000 dong ($6.5) if delivered in major cities like Ho Chi Minh City and Hanoi, free for total above 250,000 dong ($11) for suburbs, delivery time can vary between 1–3 business days for Ho Chi Minh City, 2–8 business days for other places.

Express: same day to maximum 2 business days if you pay 10,000 dong (45 cents) to 15,000 dong (65 cents). Most often, orders placed before 10:30AM will be delivered same day.

I have ordered from both Lazada and Tiki in the past, and had a good experience with the whole process. The fact that Vietnam is a cash-based society makes it very easy to order things online, when most e-commerce sites allows cash-on-delivery, so there is no commitment. On this ease of purchase/convenience, the fact that Lazada is the pioneer in mobile application e-commerce will make it ordering on Lazada easiest compared to their competitors. Price check is also a bonus point as well, as I price check everything I want to buy on Amazon, which has become a habit for me, and I believe many others.

There’s one drawback that happens to many other sites is that I didn’t when the order will be delivered until Lazada Express called me on delivery day. However, a plus point, and an interesting model is that Lazada customers can choose to cancel the order at delivery if they are not satisfied.

When I messed around to see delivery option I added an item to cart and left Lazada, which an abandon browser email kicked in in less than 5 minutes, which is great.

Tiki.vn

When Alibaba is doubling down on Southeast Asia after it announced a deal to pay close to $1 billion to raise its stake in e-commerce firm Lazada from 51 percent to 83 percent (the Chinese firm made an initial $1 billion investment in April 2016), JD.com, the largest online direct sales company in China in terms of transaction volume with a market share, continued its expansion in Southeast Asia. It is leading a Series C investment round in Tiki alongside VNG, the Vietnam-based online media and gaming company that is already an investor. The round itself is undisclosed, but TechCrunch understands that it is in the range of around $50 million overall.

Before we get into JD.com’s influence in Vietnam, let’s talk about the Chinese giant’s market entry strategy in Southeast Asia. JD.com recently set up warehouses and a delivery network in Indonesia and participated in a $500-million funding round raised by Indonesia’s largest e-commerce site Traveloka. This move is done to battle Alibaba’s takeover of Lazada and investment in Tokopedia, the largest online marketplace in Indonesia.

I know I am really off-topic, but I wanted to show the influence of the Chinese giants Alibaba and JD.com in a region with huge potential like South East Asia.

Remember Thailand’s Central Group that owns Nguyen Kim Electronics and BigC, the stuffs that you read 20 minutes ago (if you made it all the way here)? JD.com has announced a $500 million 3-way investment with Central Group and Provident Capital that will create e-commerce and fintech businesses in Thailand. It will see two joint ventures created which lean on JD.com’s experience, expertise and technology to complement Central Group business, which has assets of close to $10 billion and some 70,000 employees across its operations.

Let’s talk logistic. I love Tiki as much as I love Amazon. Reason? I had a great experience ordering books from them.

2-Hour: Get the order in 2 hours if you pay an extra 29,000 dong ($1.25) per order. It’s pretty similar to Amazon Prime. 99,000 dong ($4.3) for monthly fee, 199,000 dong ($8.75) for 3 months, and 499,000 for annual membership.

Since I recently ordered from Tiki, I have recorded the whole process.

This is the site.

Just like every average consumers, I read reviews.

Something interesting that I notice from reading over 30 reviews on a book is most of people complimented the shipping and packaging of Tiki. Well let’s see if they stand to be true for me

I added things, most of the products (all of mine) are qualified for 2-hour delivery, sweet.

Sign-up window. That’s my email in case Amazon’s interested in hiring a Business Analyst Intern.

It takes less than 30 seconds to sign up.

Top right corner is my Vietnamese full name. I went by Hung “William” Mai when I applied for the Summer 2018 Business Analyst Internship in case you are reading this Jeff. My name is in the database, pull it out and give me an offer please.

Cool, then I waited 2 hours for the order, and 3 years for the offer Jeff.

Less than 2 hours later, the delivery guy came.