At the same time, the capital market is also witnessing multiple challenges, uncertainties and is waiting for 'blockbuster' IPO deals.

According to Do Ventures, there are at least 50 start-ups in Vietnam that are providing door-to-door delivery services in the field of e-logistics. Some of the most notable competitors include Temasek-backed GHN, J&T Express, Ninja Van, and Shopee Express under Shopee, besides ViettelPost, VNPost, Ahamove, BEST Express, and Lalamove.

Mobility apps such as Grab, Gojek, and Be have also jumped in the race to provide delivery services, directly connecting customers with the drivers in the nearest location, competing in terms of express delivery service with short distances in the inner city.

Many big players have sped up the IPO process at home and abroad.

For example, the deal in which Shinhan Financial Group (Korea) became the third largest shareholder of Tiki after buying a 10 per cent stake in May 2022, has helped Tiki accelerate its IPO plan in the US.

So far Tiki has successfully raised US$450 million, with a business valuation as of December 2021 of $832 million. Most recently in November 2021, Tiki successfully raised $258 million in an investment round led by AIA Insurance, with the aim of expanding its e-commerce market share as well as serving its future IPO plan.

Tiki's continued success in raising foreign capital shows the confidence of foreign capital inflow in Vietnam's market growth and potential. Tiki plans to list in the US market in 2025, but founder and CEO of Tiki Tran Ngoc Thai Son wants to push this plan one year earlier.

Son told Investment newspaper that investment from funds had gradually become less effective, due to the company's continuous loss. A successful IPO in the US could bring great benefits in raising capital for Tiki. If the IPO is successful, Tiki could pave the way for an increased inflow of foreign investment into Vietnam's nascent tech sector.

Meanwhile, another player, Giao Hàng Tiết Kiệm, is also aiming for a domestic IPO by the end of this year or early 2023 to raise capital and cope with increasing competition in the logistics sector, with an estimated valuation of $1 billion.

In a document called Project GNext sent to potential investors, Giao Hàng Tiết Kiệm is selling about 23 per cent of its stake in the second raising round.

In June 2020, 42 per cent shares of Giao Hàng Tiết Kiệm were transferred to Parcel (Singapore). In the 2020 financial statements of Kerry Logistics (Hong Kong), it is shown that the company owned 42 per cent of Giao Hàng Tiết Kiệm. By February 2021, China's leading delivery company, SF Holding, acquired 51.8 per cent of Kerry Logistics with plans to expand investment in Vietnam, Thailand and Malaysia.

Pham Hong Quan, Chairman of the Board of Directors and CEO of Giao Hàng Tiết Kiệm, did not deny this, but only confirmed to the media that Giao Hàng Tiết Kiệm was a Vietnamese company, run by Vietnamese people and developed by Vietnamese technology. Foreign shareholders would not hold more than 49 per cent of the shares and only act as financial partners.

Fierce competition

A year ago, logistics "giant" DHL decided to terminate the business operation of the e-commerce service segment after four years of fierce competition in Vietnam.

Launched in July 2017, DHL eCommerce Solutions is tailored to suit the current e-commerce boom, while helping small, medium and large online businesses grow their market share in the e-commerce segment in Vietnam.

At that time, DHL eCommerce said it would invest heavily to get a good market share in Vietnam. The company has warehouses located in the two largest cities in the country and distribution centres across the country. Like other delivery companies, DHL eCommerce accepts Cash on Delivery (COD).

By mid-2018, DHL eCommerce suddenly announced that it would close this service segment in the Vietnamese market.

The EY Global report shows that year-to-date, the tech sector continues to lead the way in the number of IPOs, although the average deal size has fallen from $261 million to $123 million.

Compared to the same period in 2021, IPOs in Europe, Middle East and Africa decreased by 50 per cent and 52 per cent respectively in volume and proceeds; the Middle East was a rare bright spot with proceeds increasing by 209 per cent, despite a 51 per cent drop in the number of transactions.

The Asia-Pacific region is less affected by inflation and geopolitical issues, so exchanges are performing relatively well, accounting for 5 of the top 10 global IPO markets.

According to the analysis of experts, the cost burden in the Vietnamese market is among the largest in the region. Vietnam's logistics cost/GDP is more than 20 per cent, twice as high as the world average, due to limited infrastructure. The new cash-in-receipt habit common in Vietnam can also cause problems and increase operating costs.

The loss of enterprises in this field in 2020 - 2021, even 2022 is increasing. This is the time when many businesses pour millions of dollars into large-scale warehouses, while the impact of the pandemic also led to many short-term costs, not to mention inflation and geopolitical instability. 

Source: Vietnam News