More rivals, pressure in delivery market

In early February 2019, many online sellers stopped taking orders via social networks because of a goods deadlock at border gates. At the same time, the goods-carrying trucks of J&T were seen rolling on the streets in HCM City.

The deadlock at border gates occurs every year, though delivery firms in Vietnam have increased their capacity. This is attributed to the high growth of e-commerce in Vietnam.

More rivals, pressure in delivery market

The Ministry of Industry and Trade (MOIT) reported that e-commerce revenue in Vietnam in 2017 was $6.2 billion, an increase of 24 percent over 2016.

It once predicted that revenue would hit the $10 billion threshold by 2020, but just raised the forecast figure to $15 billion.

Charles Brewer, CEO of DHL e-commerce, said the revenue from the market would account for 10 percent of total value. This means that the Vietnamese e-commerce delivery market was valued at $620 million and would be $1.5 billion by 2020.

With more than 80 percent of transactions in Vietnam made in cash, the cash flow through e-commerce delivery firms in 2017 was estimated at $4 billion and will be $12 billion by 2020.

With more than 80 percent of transactions in Vietnam made in cash, the cash flow through e-commerce delivery firms in 2017 was estimated at $4 billion and will be $12 billion by 2020.

J&T, a big player from China, is looking at the Vietnamese market.

According to Scitech & Digital News, J&T has joined the Filipino market. Thailand is the only market that J&T has not set foot in. However, a representative of the group has affirmed that it will soon enter Thailand.

 

In Vietnam, the best known e-commerce delivery service includes Viettel, VNPT, GHN (giaohangnhanh), Giao Hang Tiet Kiem, LEL (belonging to Lazada), DHL eCommerce and Ninja Van. Of these, Viettel, VNPT, GHN and Giao Hang Tiet Kiem are leading the market.

GHN and Giao Hang Tiet Kiem are competing for the No 1 position in the market. Each of them can handle 400,000 orders a day. Giao Hang Tiet Kiem, a delivery service, is now the strategic partner of Shopee, a e-commerce platform marketplace, so the appearance of J&T is believed to have an impact on GHN.

According to Nguyen Tran Thi, CEO of GHN, the Vietnamese market is different from others. First, there are many administrative procedures to be followed when delivering goods with trucks or airplanes on long-distance routes. This takes delivery firms time to learn about the market.

Second, the competition. The owners of goods stalls have power and will choose the forwarders. As such, low prices must not be the decisive factor in the competition.

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Ta Anh

 
 
 
 
 
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