Tiki seems farther than ever from breaking even and ending its multi-year series of losses after the e-commerce platform has tripled its losses over-year.
Despite the losses, Tiki is still considered one of the most valuable e-commerce platforms in Vietnam
In 2018 despite the huge capital injections from China-based JD.com and domestic technology company VNG Corporation, Tiki’s losses tripled over year, increasing by VND750 billion ($32.6 million).
In 2016 and 2017, Tiki posted VND179 billion ($7.78 million) and VND282 billion ($12.26 million) in losses. This resulted in VNG also reporting losses of VND93 billion ($4 million) and VND126 billion ($5.4 million) in these years. In 2018, VNG posted a loss of VND254 billion ($11 million). As of the end of the first quarter of 2019, VNG's losses from Tiki have reached the value of its VND506 billion ($22 million) capital contribution in the company.
Despite suffering huge losses, Tiki is still one of the most valuable local e-commerce platforms with the value assessed at hundreds of millions of dollars, a spectacular increase against the $60 million in 2016.
Different from other firms, the value of startups like Tiki is not calculated based on profit, but market share, revenue, per customer purchase value, the rate of returning customers, and even the rate of increasing losses.
As of the end of April 2019, JD.com owned 25.65 per cent of Tiki’s shares and VNG held 28.88 per cent of the shares.
Suffering losses to succeed later is quite common among startups – in fact, startups reporting profit from the get-go are really rare. Investors pouring money into the firms usually expect returns in 5-10 years. However, after more than nine years of operation, the firm has been reporting increasing losses year after year, with little prospect of turning profit just yet.
Similarly, Lazada reported a loss of VND1 trillion ($43.39 million) in 2015-2016, increasing its accumulated losses to VND2.7 trillion ($117.1 million) by the end of 2016. Due to fierce competition, Lazada’s losses in 2017 alone were estimated at VND1 trillion ($43.39 million).
Shopee was officially launched in August 2016, however, by the end of the same year, the firm reported a loss of VND164 billion ($7.1 million), which increased to VND600 billion ($26.03 million) in 2017, twice as much as the loss of Tiki. VIR