Tiki-Sendo speculation piques sector interest

An expected co-operation deal between Tiki and Sendo has surprised the merger and acquisition arena in Vietnam, coming hot off the heels of the announced partnership between Vingroup and Masan late last year. 

Tiki-Sendo speculation piques sector interest

Tiki has been battling for market presence with Sendo, Shopee, and Lazada

The local market last week reacted to speculation about merger talks between two domestic leading e-commerce platforms in Tiki and Sendo. They have been negotiating to agree a partnership in the near future.

While Tiki has kept silent about the issue, a representative of Sendo would only tell VIR, “We have no comment regarding the rumours in the market.”

According to industry experts, once the negotiations are taking place, the relevant parties rarely issue comments, even to disclaim leaks.

A VIR source revealed that discussions about the merger had been taking place since August, and only leaders of each company knew of the details. As a result, most of the shareholders have expressed surprise over the news.

If the partnership comes to fruition, the M&A trend will become more dynamic thanks to that and another major deal – last year’s alliance between local conglomerate Vingroup and food giant Masan Group. These two groups last December reached an agreement about merging Vincommerce JSC, which operates Vinmart supermarkets and VinMart+ convenience stores, and VinEco Ltd., which specialises in agricultural manufacturing, into Masan.

Breaking the dominance

Thanks to the huge support of Singaporean-based Sea Group and leading Chinese e-commerce company Alibaba, Shopee and Lazada quickly seized the upper hand in the local e-commerce market. Through data from e-bills, Japanese-backed market research company Intage Vietnam estimated Shopee’s market share to be 47 per cent, larger than any other platform in the market.

Lazada, with the billion-US dollar investment from Alibaba, has never been out of the top five leading e-commerce platforms in Vietnam. Meanwhile, Tiki and Sendo, with their fragmented shareholder structure, have been calling for investment to maintain their performance.

At the end of 2019, 61.1 per cent of Sendo’s shares were held by overseas investors after getting $61 million capital in its Series C investment round. In addition to FPT, Sendo’s shares have been picked up by SBI, Beenext, Econtext Asia, and Daiwa.

Tiki also raised capital in June and December last year. The two main shareholders are VNG with 24.6 per cent and JD.com with 21 per cent of the shares. Others include Ubiquitous Traders Pte., Ltd. (nearly 9 per cent), CyberAgent, STIC, and Sumitomo.

 

As e-commerce platforms in the local market have been suffering tremendous losses, a merger may be a good fit for the two local companies. The step might not only eliminate one competitor but also create a new partnership with the stronger financial potential to beat foreign rivals.

Previously responding to VIR, Tran Hai Linh, CEO of Sen Do Technology JSC – operator of sendo.vn said, “We could turn a profit next year, but for that we would need to stop investing in the market, while there is plenty of room for development in the next 10 years.”

Regarding Tiki and Sendo co-operation, Nguyen Viet Hung, a key opinion leader in a local technology startup, said that the partnership may happen but there is a long way to go. “They have operated for 10 years and gained similar footholds in the market, so it is hard to tie things up overnight,” Hung explained. “However, Sendo’s strategy is rural-centric while Tiki has targeted the urban area. Thus, the combination will help the two companies focus on the market more comprehensively.”

Race projections

The forecast co-operation between Tiki and Sendo foresees a reform in the market that could be a battlefield of three giants – Tiki-Sendo, Lazada, and Shopee. As investment in e-commerce has yet to gain any profit, huge capital support and partnership to attain more financial power are inevitable.

Hung said that the e-commerce industry will be fiercer as the competition of the big four shifts to a big three instead. To be successful in the battle, companies will have to focus more on the core values of optimising revenue and operation costs, as well as improving financial planning to grab more profits.

In terms of e-commerce, companies may have to give more priority in narrowing the cash-on-delivery rate and goods-cancelling rate, as well as raise online payments by integrating e-wallets to shopping platforms, as in the case of Sendo’s Senpay and Shopee’s Airpay. VIR

Van Anh

Tiki and Sendo in merger talks?

Tiki and Sendo in merger talks?

Tiki and Sendo may be in talks over a potential merger to break the dominance of Shopee and Lazada and their foreign backers.

Shopee is top-ranked e-commerce platform in Buzz Rankings

Shopee is top-ranked e-commerce platform in Buzz Rankings

Shopee, a leading e-commerce platform in Southeast Asia and Taiwan, has come out on top as the most positively discussed e-commerce platform in Vietnam.

 
 

Other News

.
BUSINESS NEWS HEADLINES MARCH 23
BUSINESS NEWS HEADLINES MARCH 23
BUSINESSicon  23/03/2020 

HCM City’s agricultural production value up 4.3 percent in Q1

VN businesses keen to remove hurdles amid COVID-19 epidemic
VN businesses keen to remove hurdles amid COVID-19 epidemic
BUSINESSicon  24/03/2020 

Management agencies have put in place drastic steps in a bid to support businesses as they actively seek out sources of raw materials to be used in production whilst boosting trade promotion activities.

Markets tense up for  prolonged uncertainty
Markets tense up for prolonged uncertainty
BUSINESSicon  23/03/2020 

The turbulent moves of foreign selloffs in Vietnam’s stock market over the past few weeks have indicated that riskier assets are still in the midst of a tenuous recovery.

New FiT hike paves way for investment in biomass electricity
New FiT hike paves way for investment in biomass electricity
BUSINESSicon  23/03/2020 

The feed-in tariff (FiT) for biomass power projects will range from VND1,634 to VND1,968 per kWh, exclusive of value-added tax, setting the stage for more investment in biomass electricity.

Supporting industries leading automakers towards success
Supporting industries leading automakers towards success
BUSINESSicon  24/03/2020 

Vietnam is striving to successfully build up its automobile industry. 

Vietnamese delivery firm continues buying spree
Vietnamese delivery firm continues buying spree
BUSINESSicon  23/03/2020 

Local delivery firm Tin Toc JSC has recently acquired SGDS Logistics and Investment Corporation, marking its third acquisition to scale up business in Vietnam.

Masan MeatLife to pour $22 million in Anco
Masan MeatLife to pour $22 million in Anco
BUSINESSicon  23/03/2020 

By injecting VND500 billion ($21.74 million) into Anco, Masan MeatLife will increase its stakes from 70 to nearly 100 per cent.

Vietnam offers little unmet demand for medical mask imports
Vietnam offers little unmet demand for medical mask imports
BUSINESSicon  23/03/2020 

Chinese firms will begin exporting medical face masks, but their choice starting point, Vietnam, has little demand that goes unsatisfied by local producers.

Global economy will suffer for 'years to come' says OECD
Global economy will suffer for 'years to come' says OECD
BUSINESSicon  23/03/2020 

OECD boss Angel Gurría says the economic shock is already bigger than the financial crisis

VN central bank delays foreign ownership cap in payment services industry
VN central bank delays foreign ownership cap in payment services industry
BUSINESSicon  23/03/2020 

The State Bank of Vietnam has said it will not cap foreign ownership of companies in the payment services industry in its draft decree to replace Decree No.101.

Investors show growing appetite for LNG power projects
Investors show growing appetite for LNG power projects
BUSINESSicon  23/03/2020 

A slew of sizeable liquefied natural gas-fired power projects have been in the development pipeline in the past year as a way to replenish national power sources as Vietnam turns on a greener growth path.

Stocks fall as nations take coronavirus action
Stocks fall as nations take coronavirus action
BUSINESSicon  23/03/2020 

Shares in Asia slide on Monday as more drastic action is taken by governments to stop virus spreading.

Mounting difficulties may lead half of Vietnam textile-garment firms to bankruptcy
Mounting difficulties may lead half of Vietnam textile-garment firms to bankruptcy
BUSINESSicon  23/03/2020 

Some importers from US and EU, major markets for Vietnam’s textile and garment industry, have stopped orders within three to four weeks on Covid-19 pandemic.

Expressway component projects to be shifted to public investment
Expressway component projects to be shifted to public investment
BUSINESSicon  23/03/2020 

Three component projects of the North-South Expressway master plan are expected to be shifted from the private-public partnership model to the public investment model.

Vietnam imposes anti-dumping measures on Chinese, Indonesian MSG
Vietnam imposes anti-dumping measures on Chinese, Indonesian MSG
BUSINESSicon  23/03/2020 

The Ministry of Industry and Trade (MoIT) has imposed provisional anti-dumping measures on some monosodium glutamate (MSG) products from China and Indonesia.

ACV reduces airline service fees for next six months
ACV reduces airline service fees for next six months
BUSINESSicon  23/03/2020 

The Airports Corporation of Vietnam (ACV) has announced it will reduce airline service fees for six months from March to August to support airlines suffering from the COVID-19 pandemic.

EVFTA poses challenges to Vietnamese agricultural products
EVFTA poses challenges to Vietnamese agricultural products
BUSINESSicon  23/03/2020 

Since the EVTFA was approved, experts have been analysing the opportunities for Vietnam to penetrate deeper into the high-value foreign markets. 

Adapting to new economic travails
Adapting to new economic travails
BUSINESSicon  24/03/2020 

The Vietnamese government has enacted Directive No.11 on supporting enterprises out of difficulties caused by COVID-19. 

4.0 offers opening up for foreign tech transport firms
4.0 offers opening up for foreign tech transport firms
BUSINESSicon  23/03/2020 

Digital transformation is bringing about significant changes in the transport sector, and the upcoming launch of the new 5G network standard will further power new breakthroughs. 

Pandemic has little impact on Vietnam’s shrimp exports
Pandemic has little impact on Vietnam’s shrimp exports
BUSINESSicon  23/03/2020 

The domestic shrimp industry has not faced a great impact from the COVID-19 because now this industry is under production and Vietnam will enter its shrimp harvesting crop in August.

 
 
 
Leave your comment on an article

OR QUICK LOGIN