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Big players vie for Vietnam’s delivery market share

Online shops could be the major clients of the firms as they have diverse service requests.

 

 

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DHL eCommerce have also jumped into the delivery market in Vietnam

 

 

In this field, small firms have bigger advantages than large ones. Delivery services can also seek niche markets such as instant delivery services, low-cost services and delivery of specialized products.

The Vietnamese billion-dollar e-commerce delivery services industry is turning into an increasingly fierce battlefield with big companies trying to gain larger market share.

The express delivery market is now dominated by not only traditional companies, such as Viettel Post, VNPost, and EMS, but also startups including giaohangnhanh, supership, giaohangtietkiem, etc.

Besides, multinational companies, such as DHL eCommerce, Grab Express, Lazada Express, have also jumped into the field, heating up competition.

All the companies are under pressure to provide faster and better services as delivery speed and quality have a direct impact on their successful order rates.

Following the trend, The Gioi Di Dong (Mobile World), a large retail chain, which runs thegioididong.com and dienmayxanh.com, is committed to delivering goods within 30 minutes.

Meanwhile, FPT Shop pledges to deliver goods within 60 minutes to addresses within 10 kilometers in all 63 cities and provinces across the country. The company also takes orders with requested delivery time.

Freight and forwarding companies have also joined the race to satisfy online buyers’ requirements and serve large e-commerce sites such as Lazada, Tiki and Sendo.

Tiki, under cooperation programs with payment service providers such as MoMo and ZaloPay, now offers TikiNow, a coupon for free delivery within two hours.

According to Pham Anh Tuan, VNPost’s chairman, the race in the delivery market is fiercer as the postal industry, including delivery, shipping services, and logistics, is pulled about by approximately 300 authorized enterprises, not to mention a series of freelance delivery enterprises and unlicensed delivery services from bus operating companies to small and super-small companies competing via discounts.

Some investors have recently poured money into startups and they are willing to suffer losses for a couple of years just to win market share, Tuan said.

While startup companies are trying to boost sales by offering low prices and discounts, providing services around the downtown of big cities, multinational companies continue to enhance their presence by launching special services or establishing new subsidiaries in different cities and provinces.

Under such circumstances, domestic traditional delivery companies, such as Viettel Post and VNPost, have to improve the quality of their transport and warehouse systems, developing the logistics sector.

Viettel Post has been listed on the UPCoM to attract investment for the expansion of its delivery services to reach other foreign countries, boosting logistics and postal technology.

Meanwhile, VNPost has brought its southern center of transport and logistics in Ho Chi Minh City on stream. The company is also carrying out the construction of seven regional transport and logistics centers, forming three main complexes in Hanoi, Ho Chi Minh City, and Danang.

Promising land

The Vietnamese delivery services industry currently makes for a particularly promising land. According to the Vietnam E-commerce Association (VECOM), e-commerce in Vietnam witnessed a growth of over 25 percent in 2017 and might hit the scale of US$10 billion in 2020.

A survey of some delivery companies shows that delivery services are posting revenue growth of 62-200 percent. This is an ideal opportunity for delivery enterprises to make a breakthrough in development.

Meanwhile, experts said though small delivery firms are less competitive than big ones which have good technology and finance, they will still be able to grow if they can choose suitable market segments.

According to Hoang Giang, the founder of TopShip, a platform that connects transport service providers, small firms can provide services to customers’ requests with different service packages and fast delivery service within cities.

Online shops could be the major clients of the firms as they have diverse service requests. In this field, small firms have bigger advantages than large ones. Delivery services can also seek niche markets such as instant delivery services, low-cost services and delivery of specialized products, Giang said.

Hanoitimes

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