How Vietnam’s richest billionaire is secretly building Vietnam’s biggest ecommerce site

VinEcom is a massive ecommerce operation under Vingroup, one of Vietnam’s largest real estate companies, founded by Vietnam’s first ever billionaire, Pham Nhat Vuong. In February, we reported that the VinEcom would receive US$30 million to take on e-commerce. But we can now confirm via Vingroup’s own website that the division is slotted for US$50 million in total. No local Vietnamese startup has nabbed funding rounds of that size for projects that have yet to see the light of day.

Who is Pham Nhat Vuong?

In 2010, Pham sold his noodle processing company to Nestle for an estimated US$150 million. That company began in Ukraine in the mid-1990’s, originally out of his own small noodle shop. He then began investing in resorts, apartment complexes, malls, hospitals, and schools in key areas in Vietnam. Each investment built on the last one’s success, and now Pham is worth over US$1.3 billion, making him the richest man in Vietnam. In the midst of his company’s boom, Pham made a rather discrete investment in 2006 in a company called VC Corp, one of Vietnam’s top three internet companies. Through this subtle move, Pham showed an early taste for the online world more than seven years before launching VinEcom.

VinEcom calm before the storm

When Vingroup first announced its entry into the ecommerce space in February, it was met with both considerable skepticism and cautious enthusiasm.

On one side, many people in the press speculated that a real estate mogul would not know how to do ecommerce. After all, the two industries require different mindsets. Real estate folks build, sell complete products, and then collect on their assets. Ecommerce, on the other hand, requires intensive operations, razor thin margins, state of the art logistics, expertise in online marketing, and excellent buying prowess.

On the other side, Vietnam’s current ecommerce leaders – folks from Vat Gia, Hotdeal.vn, Lazada, Tiki, Zalora, CungMua, Sendo, Project Lana, and more – were excited to see a larger player enter the market. It meant that Vingroup would also be willing to grow the nation’s then-nascent ecommerce market.

But right away, the key ecommerce players could feel the burn of a new major player in the market. Since Vietnam’s ecommerce market is so small, in terms of human resources, there are only so many people with ecommerce experience in the country. Vingroup shopped around the ecosystem for potential companies to acquire as well as people to hire. With potential acquisitions, VinEcom assessed the size and potential of the market. With people, the division at times offered to double the salary of key people it wanted to join. Most notably, Erik Jonsson, former head of Zalora Vietnam, is now on board as deputy general director of VinEcom. Kyle Pham, former CFO at NhomMua, once one of Vietnam’s bright ecommerce players, is now on as head of service at VinEcom.

Erik Jonsson is pictured behind Nguyen Lam Thanh, current deputy general director of VinEcom and former head of the Vietnam Internet Association.

But Jonsson and Pham, both of whom are big names in the small world of Vietnamese ecommerce, aren’t the only employees that got poached into VinEcom. You can see more of the people that have been hired on LinkedIn here and here. If you look closely, you’ll see former startup founders, respected bloggers, and logistics veterans. VinEcom is hiring from well beyond the retail and ecommerce market. Rumor has it that today the company has over 2,500 employees to date. Sources tell Tech in Asia that each of the teams, from marketing to content to logistics, numbers in the hundreds. This likely puts VinEcom’s monthly overheads in the millions.

On top of all the hiring, VinEcom has undergone some top level shuffling. In May, we reported that the the CEO of VinEcom, Le Thi Thu Thuy would resign. Shortly after, a new woman stepped in to fill her place, only to be replaced just this August by Mai Huong Noi, who is now general director of VinEcom. Each new CEO has had to struggle to keep up with Pham’s vision. In the beginning, his role was more as an investor, but now he’s stepped in more to execute his vision. But until last August, the actual substance of that vision remained unknown to outsiders.

VinEcom’s leaked slides

Building an ecommerce house of cards