VietNamNet Bridge - The confrontation between Vuivui, backed by The Gioi Di Dong, a big player in the mobile device distribution market, and Tiki, one of the most successful e-commerce firms in Vietnam, which is supported by VNG, is expected to be an interesting story in 2017.

Making its debut in early 2017, Vuivui.com, the e-commerce website,  was seen as a strategic move taken by The Gioi Di Dong. The retail chain recently has been trying to join many different business fields, from technology products to home appliances to food distribution.

When launching Vuivui, The Gioi Di Dong stated that Vuivui will only sell genuine products. Eighty percent of products available on Vuivui will be sourced from The Gioi Di Dong. With commitment to strict control over input products and quick delivery, Vuivui has initially gained success in catching the public’s attention.

Pham Van Trong, chief of Vuivui project, said that Vuivui would make up at least 10 percent of the group’s revenue.

The Gioi Di Dong’s financial report says the group plans to obtain revenue of VND60 trillion in 2017. This means that the revenue Vuivui plans to have in the next three years will be no less than VND6 trillion.

However, analysts said Vuivui’s ambitious plan may be blocked by another startup which is also well known in the e-commerce field – Tiki.vn.

The managers of The Gioi Di Dong admitted that Vuivui’s business model is similar with Tiki’s. Tiki is a rival of Vuivui, because Tiki has several years of experience in the Vietnamese market, while Vuivui is just a newcomer.

Tiki has shown that it is ready for the ‘battle’ after VNG poured $18 million in capital. The amount of money has helped Tiki expand rapidly, from a website specializing in selling books to a website which distributes a wide range of products. 

Electronics have become the key distribution products which account for 42 percent of products available on Tiki.

A report showed that the total gross merchandise volume (GMV) in 2016 of the startup increased by 131 percent compared with 2015. 

However, analysts said Tiki still faces difficulties. The increase in GMV is proportional to the increase in losses incurred by Tiki. By August 2016, the startup had reported a loss of VND157 billion.

However, Tran Ngoc Thai Son from Tiki is optimistic about Tiki’s business performance, saying that Tiki now focuses on improving product quality and ensuring fast delivery.

Meanwhile, both Tiki’s advantages – high quality of products and fast delivery – are also what Vuivui is striving for. And both of them are now focusing on the southern market before marching towards the north.

Kim Chi