A $100m bet on Vietnam’s logistics space

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Hello readers,

My impulsiveness often rears its head at the worst times. Take two weeks back, for example. It was close to midnight when a friend annoyingly pinged me: “The iPhone 12 mini’s on sale!!” along with a link to a Shopee page.

We both know what happens next.

Minutes later, I found myself stewing in mild regret and trying not to think about the fact that I had just spent [redacted amount] on a phone I didn’t actually need. To be fair, I’d been on a secondhand iPhone 7 for almost two years, much to the derision of my friends.

The ecommerce space is clearly designed for this purpose: to stir excitement where there was none, to entice users with coins and cashback rewards, and to make it so easy that you’d do it all over again.

In Vietnam, the Covid-19 pandemic has seen a surge in online shopping – and with it, the demand for ecommerce logistics providers. Scommerce is one such player in the field, but it’s joined by at least 49 other startups. The bigger question is, does it stand a fighting chance?

Today we look at:

• Temasek’s US$100 million bet on Vietnam-based logistics provider Scommerce
• Why Byju’s WhiteHat Jr has served a critic a US$2.7 million defamation suit
• Other newsy highlights such as TikTok and WeChat’s tough luck in the US, and Blackstone’s hopes of raising US$5 billion

PREMIUM SUMMARY

Will Temasek’s big bet on Scommerce pay off?

From congested and poorly constructed roads to confusing street addresses, these obstacles make fulfilling last-mile deliveries in Vietnam no easy feat. But the pandemic has fueled the demand for delivery solutions, and Singapore’s Temasek reckons Vietnam-based ecommerce logistics provider Scommerce has got game. The company, which specializes in last-mile express and on-demand delivery, solely serves the Vietnam market. In 2019, Scommerce raised US$100 million in a Temasek-led round.

• A booming sector: It makes sense for Temasek to vie for a slice of the country’s logistics sector pie. Between 2015 and 2020, the number of orders processed by fast-delivery logistics companies in Vietnam grew by 45% on average and could reach 530 million orders by year-end. And given 98% of Vietnamese firms are small and medium-sized enterprises, it explains the heavy demand for more (and better) delivery solutions.
• The ties that bind: Scommerce’s origins trickle to 2012, when a startup called Giao Hang Nhanh (GHN) was created by ex-employees of Mobile World, Vietnam’s leading electronics retailer. When Scommerce was established in 2017, it subsumed GHN into a grander plan – and by 2018, the company had crossed the US$100 million revenue mark. But with ecommerce platforms establishing their own logistics arms – such as Shopee Express – analysts believe third-party logistics providers like Scommerce could lose out.
• Filling the last-mile space: Thanks to the upswing in online shopping, at least 50 active startups are offering ecommerce logistics services in both the first-mile and last-mile sectors. Despite this, Hang Do, chief operating officer at Scommerce, says the firm has a healthy balance between serving formal ecommerce platforms and directly serving SMEs and sellers on social media. “Vietnam’s SMEs market is big enough and no player can capture it alone,” Do adds.

Byju’s-owned WhiteHat Jr files US$2.7 million defamation suit against critic

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