How Vietnam’s Sendo captures consumers beyond big cities

Founded in 2012 as part of Vietnam’s largest IT services company, FPT Corporation, Sendo is a notable homegrown platform that’s been staying competitive in the country’s burgeoning ecommerce sector.

Sendo operates both business-to-consumer and consumer-to-consumer models. By its own account, Sendo currently serves more than 300,000 sellers and 10 million buyers. And it has focused on a broad coverage rather than just the top-paying consumers. About two-thirds of Sendo’s orders are placed outside of Vietnam’s biggest cities Hanoi and Ho Chi Minh City.

Tran Hai Linh, CEO of Sendo

In August 2018, Sendo raised US$51 million in a series B funding round led by SBI Group from Japan, alongside SoftBank Ventures Korea, Daiwa PI Partners, and SKS Ventures. In terms of monthly web traffic, Sendo ranked fourth among ecommerce players in Vietnam in the second quarter of 2019, according to data from iPrice, closely behind Shopee, Tiki, and Lazada.

KrAsia asked CEO and co-founder Tran Hai Linh how Sendo has been able to differentiate itself from competitors by tapping into lower-tier cities in Vietnam.

In recent years, the Vietnamese ecommerce market has grown at a phenomenal rate of 20% to 25% a year, but it’s also very competitive with both foreign and local players. Sendo is now in the Top 4 in terms of monthly web traffic. Do you think this reflects the real situation?

Web traffic is certainly one of the relevant indicators, but it is definitely not the only criteria when it comes to assessing the scale and development of an ecommerce platform. For Sendo, the number of web visitors has never been a target.

An ecommerce platform can only become a dominant player if it can create real value for consumers. Having impressive numbers in terms of web traffic and gross merchandise volume always requires burning lots of money. During the past seven years, we have always been one of the top leading players in the Vietnamese ecommerce playground, but we have never been among the Top 2 or 3 in terms of burning rate. Instead, we truly understand the demand of Vietnamese consumers and this drives the growth of Sendo.

Our goal is to bring goods and services to Vietnamese consumers living in every part of the country. We have been able to build a strong platform to process hundreds of thousands of transactions a day and serve more than 10 million Vietnamese customers in total.

How has Sendo been able to chart a different path from competitors?

Our strategy is to focus on customers in all parts of Vietnam, not just the big cities. An estimate of 75 million Vietnamese do not live in Hanoi or Ho Chi Minh City. It’s harder for consumers in the lower-tier cities and provinces to access affordable and quality products due to the distribution gap. Our experiences have shown that consumers in these areas often buy due to their real demand instead of buying just because products are on sale.

In 2012, when we first started, we were one of the first ecommerce platforms allowing cash on delivery via a local third-party delivery company, which was Vietnam Post. We understood early on that we could not wait for e-payments to fully develop. Cash on delivery was the best option to convince consumers to use ecommerce and earn their trust.

For first-time ecommerce buyers, they will not be willing to spend on products priced US$1,000 or up, such as an iPhone or a TV. So Sendo has chosen to focus on clothes, home appliances, and technology accessories, which have lower to mid-range prices, in order to meet the daily demand of consumers and attract new users at a low cost.

Most importantly, Sendo does not charge merchants commission fees. Instead, they can pay us for advertising on either our platform or channels that can direct users to the platform.