Vietnam’s Tiki reports widening FY 2022 loss as revenue drops

Thu Huong Le contributed to this report.

Tiki, considered the biggest homegrown rival of regional ecommerce giants Shopee and Lazada in Vietnam, reported declining year-on-year revenues for its most recent financial year (ending March 2022). While the FY 2022 numbers were audited, the figures for FY 2021 were not.

This is based on regulatory filings for the Singapore-based Tiki Global Pte. Ltd., which was established in May 2021 and owns more than 90% of the Vietnam-based entity.

Accordingly, Tiki recorded a 7% drop in total revenue for FY 2022, compared to FY 2021. Meanwhile, total expenses were up 4% from the same period a year earlier.

As a result, the company’s operating loss widened by 39% in FY 2022.

Diversifying offerings: a work in progress

Inspired by Amazon’s Jeff Bezos, Vietnamese entrepreneur Tran Ngoc Thai Son founded Tiki in 2010 as an online bookselling platform. Tiki is short for tìm kiếm and tiết kiệm, which means “search and save” in Vietnamese. The name reflects Tran’s vision of giving local consumers better and more affordable shopping experiences.

Tiki CEO and founder Tran Ngoc Thai Son / Photo credit: Tiki

Tiki, which uses the B2C and C2C model, divides its total revenue into two: sale of goods and rendering of services. The former accounted for a lion’s share of revenue (88%) in FY 2022.

For services, logistics is the largest segment and outperformed its overall revenue metric by growing 7% year on year. This is not surprising since the company has offered fast delivery from the beginning, taking a page out of Amazon’s playbook. Tiki has also been aggressively investing in its in-house logistics facilities.

In contrast, marketplace commissions fell by 37%.

It’s worth noting that the fastest-growing segment in terms of services was Tiki Ads, which soared by 131% from FY 2021. However, it remains only 2% of the company’s overall revenue.

While Tiki’s overall revenue was down 7% in FY 2022, its cost of sales only dipped by 1%, resulting in gross margins deteriorating from -9% to -16%.

Room for cost-cutting?